Bottom line: Familiar faces in the driver’s seat at Subaru dealership

  • John Lippman. Copyright (c) Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Valley News Business Writer
Published: 2/13/2021 10:22:22 PM
Modified: 2/16/2021 3:10:55 PM

The curious sale of the White River Subaru dealership property in White River Junction that marked perhaps the biggest Upper Valley real estate deal of 2020 now has an explanation. Sort of.

In December, I reported the $12.5 million sale of the 8-acre property on Sykes Mountain Avenue to an entity that has ties to the head of a Boston-based private equity real estate firm. The transaction was curious inasmuch as the seller of the property, Prime Automotive Group of Norwood, Mass., had purchased the property only four years earlier for $9.5 million and where it built a new $4 million Subaru dealership.

Now it turns out the sale of the property was part of the unannounced sale of the Subaru dealership itself last October to New England auto dealership mogul David Rosenberg and his business partner, Christopher Konovalchik, general manager of the White River Junction dealership.

What’s more eye-catching is that Rosenberg is former CEO of Prime Automotive, leading the company when it acquired the Subaru franchise — then known as The Car Store — from Rick MacLeay in 2016 and relocated the dealership from Norwich to White River Junction. Rosenberg, son of late New England car dealer legend Ira Jack Rosenberg, sold his stake in Prime Auto to investment firm GPB Capital for $235 million in 2017 but still owns Ira Jack Chevrolet in Saco, Maine.

(That deal did not end well. In 2019 David Rosenberg accused the new owner, GPB Capital, of financial misconduct. GPB then fired Rosenberg — in retaliation for whistleblowing, according to Rosenberg — who has turned around and sued his former employer alleging “massive securities fraud” in addition to seeking to be reinstated in his former position. To top it off, earlier this month the U.S. Attorney’s Office indicted and arrested the CEO of GPB Capital and two other executives associated with the investment firm and charged them in a massive scheme to defraud investors. But that’s another story.)

In an interview last week, Rosenberg said he wanted to acquire the White River Junction Subaru franchise — he is 75% partner while Konovalchik, a Quechee resident, owns 25% with an option to acquire a higher stake when he pays down the loan — because of the dealership’s strong sales and service record in the Upper Valley market.

“I was intimately involved in moving the business from Norwich to White River Junction,” Rosenberg said, adding that the dealership, which employs about 60 people and sells 150 new and used vehicles per month, has “an unbelievable culture.”

Rosenberg added that he also “fell in love with the area” and is even looking for a home to buy in the Upper Valley.

Asked why they waited months to announce the purchase of the dealership, Rosenberg said they wanted to hold off until all the “computer and data systems” successfully transitioned after the closing. He said they also wanted to time the announcement in advance of Presidents Day on Monday, the traditional beginning of the car-selling season.

“We wanted to make sure we had firm ground to stand on before bringing up the new ownership,” he said.

And about that real estate deal: Rosenberg said he is also part of the investor group that acquired the real estate in a separate deal at the time of the sale.

As for the burning question how come Prime Auto was willing to sell one of its marquee car dealerships to the same person who is waging a legal battle against its parent company and whose original allegations presaged the federal charges against GPB Capital associates, Rosenberg, citing pending litigation, declined to say.

“But I am sure they would have preferred to sell it to someone else besides me,” he said.

Prime Automotive did not respond to messages seeking comment.

A business growsin White River Junction

White River GrowPro has acquired a little plot and is cultivating its future.

The nearly seven-year-old store on South Main Street in downtown White River Junction started out by selling hydroponic systems and supplies for indoor garden cultivation, but business really blossomed in 2018 after Vermont legalized growing marijuana for recreational use.

Since then, everything’s been coming up roses for wife-and-husband owners Stephanie Waterman and Kendall Smith, whose store has become a destination for cannabis cultivators from around the state.

Now Waterman and Smith are embarking upon a major expansion of their business.

In December they purchased the long-vacant building at 788 Hartford Ave. (Route 5) across the street from St. Paul’s Episcopal Church in White River Junction for $329,000, where they plan to relocate White River Growpro to a much bigger space and lot.

“We have been primarily a business that has focused on cannabis cultivation,” Waterman told me last week. “But this will neatly give us three times the space we currently have and we want to expand our gardening center offerings, sell more soils for gardening and supplies, not just for cannabis.”

Waterman and Smith recently put up a large tarp sign on the side of the building announcing that it would be the future home of White River Growpro, although Waterman cautioned that such a move could be more than a year away as they have only begun the process.

“We’re in the process of evaluating the building, whether to repair it and add on an addition or tear it down and build something new. We don’t know yet,” Waterman said.

Waterman said the goal of the business is not only to cater to the homegrown market but also to be a supplier of cultivation supplies to the “cannabis industry” in the state, which “coupled together is a good direction for us.”

Waterman said, however, that she and her husband have no plans to become a dispensary for recreational marijuana sales.

“We’ll be just down the road from Hartford High School,” she said. “We are very sensitive about the location. We want to be respectful of the community.”

Contact John Lippman at jlippman@vnews.com.

Correction

Kendall Smith is the co-owner of White River Growpro. An  earlier version of this column incorrectly reported his first name.

 

 




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