UPDATED: $60 million project will create new Kelley Automotive complex, expand and upgrade two Menards stores

Kelley Automotive will create a new $50 million auto sales complex to the west of the Menard's store at 6310 Illinois Road. (Photo by Kevin Leininger of The News-Sentinel.com)
The relocation of most of Kelley Automotive's facilities could create a void in the nearby 14/69 Auto Mall. (File photo by Kevin Leininger of News-Sentinel.com)

Local businessman Tom Kelley saw a one-time opportunity coming and took it — and as a result he and the founder of the Menards stores are planning an investment of about $60 million investment that will create a new auto-dealership hub in Fort Wayne.

Kelley, president of the Kelley Automotive Group, and longtime friend John Menard Wednesday announced a joint venture that will see the Wisconsin-based home-improvement chain spend about $6 million to expand its stores at 5511 Meijer Drive and 6310 Illinois Road and creation of an auto dealership cluster adjacent to the Illinois Road store that should soon be home to six Kelley Dealerships and related facilities now in the nearby 14/69 Auto Mall.

Development of the 14/69 Auto Mall began in the mid-1980s when Mike Fitzgerald and Bill Poinsatte bought land near Indiana 14 and Interstate 69 planning to move their downtown dealerships there. “Our leases (in the Auto Mall) are up in 2022, and the (car) manufacturers always want you to upgrade your facilities, which is foolish with rental properties. I tried to buy them but (Auto Mall owners) wouldn’t talk to us,” said Kelley, who turned what could have been a liability into an opportunity by buying 50 acres from old friend John Menard. While Menard is upgrading the size, product line and service of his two stores, Kelley will be creating a gleaming new campus for his BMW, Volvo, Cadillac, Buick, GMC and used-car Superstore, along with the parts department, car wash and body shop now in the 14/69 mall.

“And we’ll still have room for one more dealership or so,” Kelley said. Kelley Automotive currently employs 600 people but the move could create an additional 50 jobs, he said.

“We’ve wanted to expand this (Illinois Road) store for some time,” Menard said at a press conference inside the store.

The investment by Kelley and Menard will include about $13 million for infrastructure that will improve traffic flow by creating new entrances to the store and new auto mall. “And the city wants better access (off Illinois Road/Indiana 14), Kelley said. As his dealerships make the transition to new homes, he will work with 14/69’s owners to help them find new tenants, Kelley said.

The new location is especially attractive not only because it is adjacent to Interstate 69 but because the short move means Kelley’s relocated dealerships will not infringe on any other dealers’ assigned territories. That very thing happened in 2012, when Summit City Chevrolet at 5200 Illinois Road filed a lawsuit in which it claimed the pending move of Kelley Chevrolet from East State Boulevard to Lima Road and I-69 violated a six-mile separation set by state law. The lawsuit was dropped after the state changed the law, and Kelley built his new $6 million Chevy dealership on land he also bought from Menard.

Kelley said he and Menard have known each other since the early 80s, and were later competitors when both operated Indianapolis-style racing teams. In 2016, Kelley introduced Menard to Brian Bauer, who as then-CEO of Lutheran Health Network was seeking financial backing for a proposal to buy the network from its Tennessee-based parent company. Menard ultimately declined, however, and Kelley later resigned from Lutheran’s board.

In a statement, Mayor Tom Henry praised Wednesday’s announcement, saying he appreciates “the commitment to our community being demonstrated by John Menard and Tom Kelley. This substantial private investment assists us in our ongoing efforts to be a destination city to live, work and play. Economic growth and success have positioned Fort Wayne and northeast Indiana as a leader in job growth and business expansion opportunities.”

Two other auto-related businesses, the Tube car wash and Belle Tire, recently opened near the site of Kelley’s new auto mall. Kelley hopes to break ground this year.