From dirty warehouse stunning dealership stunning to leadership

Dealer Mike McGrath knew that he faced a formidable challenge: turning a 95,000-sq.-ft. former frozen seafood processing building in downtown Chicago into a dealership worthy of Lexus's affluent heritage.

Equally daunting was the task of convincing corporate Lexus that the urban site was worth the major investment.

"They were a little skeptical about how this big old dirty warehouse could be made into a high-line, luxury auto facility," Mr. McGrath says. "And, to say the least, they weren't sure that I knew what I was doing."

The story begins more than two years ago when Lexus, after researching the Chicago market, decided it needed a downtown dealership.

Mr. McGrath, who also owns a Westmont, IL Lexus dealership, was one of the three closest suburban dealers invited by the company to submit an entire business proposal for a new franchise, including where the facility would be located.

The large warehouse that Mr. McGrath discovered was once the location of a seafood processing facility. It went bankrupt in the mid-1990s. Mr. McGrath was certain that the building's site, right next to the Kennedy expressway, and its surrounding 3-acre property would make an ideal spot for a thriving dealership.

"It has very high visibility. In fact, 415,000 cars a day go right by," he notes.

To turn his vision into a reality, Mr. McGrath enlisted The DePalma Group, a Chicago architectural design firm. Elsa DePalma became the project principal.

"I had Elsa do some artist renderings and floor plans. Lexus was very impressed. I think that ultimately the reason I was given the opportunity to represent Lexus is that they saw what she could do with this building," he says.

Both Mr. McGrath and Ms. DePalma were aware that, because of the building's location in an up-and-coming part of the city, the dealership's urban customer would be atypical for Lexus.

"We have a much different clientele here than in the suburbs," Mr. McGrath says. "These customers are active and trendy young professionals, with an average yearly income of $100,000.

Adds Ms. DePalma, "We said in the beginning that this couldn't be a traditional Lexus dealership. Because this is an urban environment with a younger, more design-savvy, and probably more cultured consumer, we needed to make it more contemporary."

To that end, combinations of textures were incorporated into the design - rough concrete next to polished wood, faux stucco against smooth slate. Ceiling drops and projection lighting were utilized to create intimate and casual areas. Fine works of art adorn the walls.

The two-level facility has three new vehicle showrooms, two large pre-owned vehicle areas with storage for up to 100 cars, and 29 separate service bays. A specialty SUV showroom features earth tones and faux trees for a refined, "outdoorsy" feel.

Elegant waiting areas offer such customer conveniences as a putting green, supervised children's play area, work corrals with computer hookups, and small product showcases.

Visitors can also unwind while enjoying a complimentary cappuccino and Danish at Cafe Lexus, an area with Italian-style furnishings and custom booths equipped with telephones.

This area doubly functions as a meeting space where salespeople and clients can interact in an informal, relaxed environment. Future plans for the area call for the installation of a kitchen along with a full-service food counter where customers can order breakfast, lunch and dinner.

With a total price tag of approximately $10 million, it's not difficult to see why corporate Lexus may have had some initial misgivings about agreeing to the massive undertaking.

Still, a contented Mr. McGrath says the results are worth it. Since opening in May 1999, McGrath Lexus has sold an average of 150 new and used vehicles per month, rivaling several other upscale dealerships in the area.

"Our service department, in the first six months of being here, has been in the 99 percentile service rating which is number one out of 38 Lexus dealers in the 14-state central area," he adds. "And Lexus is generally year after year the number one franchise as far as customer satisfaction and service, so we like to think we're the best of the best."

Mr. McGrath says the feedback from visitors is great.

"Every customer that walks in is literally just shocked at how nice the facility is. Here's what used to be an industrial property that now has been converted to a fabulous new dealership in a high traffic area," Mr. McGrath continues. "Even the Lexus people were blown away when they saw it for the first time."