De Luzes selling Big Island Toyota: Servco will take over, retain employees

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HIRANO
Kelsey Walling/Tribune-Herald Big Island Toyota is shown on Saturday in Hilo. The De Luz family is selling its dealership to Oahu automotive retailer Servco, ending a more than 60-year-old legacy of selling cars on the Big Island.
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Big Island Toyota is being sold.

The De Luz family is selling its dealership to Oahu automotive retailer Servco, ending a more than 60-year-old legacy of selling cars on the Big Island.

“We don’t know a life without Big Island Toyota,” said Jan De Luz at a Friday meeting of the state Board of Land and Natural Resources. “But we’re not spring chickens. And we don’t have successors, that’s our biggest issue.”

De Luz said the sale to Servco will include Toyota locations in Hilo and Kailua-Kona for a total purchase price of $42.5 million, not counting vehicle inventory and other assets.

The Hilo dealership is situated on a trio of parcels leased from the state, with a combined tax-assessed value of about $5.7 million. Because the leases of those parcels have between 2.5 and 11 years remaining on their terms, the BLNR needed to approve the transfer of the leases to Servco before the transaction could be completed.

De Luz said the deal should be finished by the end of July, at which point Servco will continue managing the dealership as a Toyota franchise and will retain its employees, many of whom have been with the dealership for decades.

According to the Big Island Toyota website, the company has about 70 employees.

“When we set out to do this, it had to be a local company,” De Luz said. “We didn’t want this massive business to come in and clean us out. … A Toyota tech is a Toyota tech, their blood is Toyota red. … (Servco) gave us assurances. They know a lot of our people already. It’s in their best interest to keep everybody who’s been there long-term.

“I guess we could bury them in the back lot,” De Luz joked.

“Big Island Toyota’s a very successful, very good business, and it’s built on their people,” said Servco Executive Vice President Peter Hirano at the meeting. “And we intend to keep those people.”

Hirano also said Servco’s short- to mid-term plans will expand the dealership’s capabilities — for example, the it will be able to service Lexus vehicles on-island, he said.

Hirano said Servco and the De Luzes have been “tight” for more than 60 years.

“For a long time, there’s been this relationship between Servco and Big Island Toyota,” Hirano said. “We’re anxious to have them become even tighter with us, and have them be a part of our family as well.”

BLNR members waxed nostalgic about the dealership during Friday’s hearing.

“I’m not too sure what the Hilo community will do with not having De Luz,” said BLNR chair Dawn Chang. “It’s such a household name. … I suspect, even with a Servco sign up there, people are still going to call it De Luz.”

While Big Island Toyota was opened by the late David De Luz Sr. in the 1970s, he began selling cars on the island in the 1950s, opening a used car lot in 1958 and his first franchised dealership — Big Island Rambler Inc. — in 1962.

“Someone from First Hawaiian Bank told me the De Luz name is like Campbell’s Soup,” Jan De Luz said during the meeting.

The BLNR approved the lease transition Friday.

Big Island Toyota representatives did not respond to requests for comment in time for this story.

Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.