CALDWELL — As the effect of the summer's federal Cash for Clunkers program fades, auto dealerships in Caldwell — and in much of the rest of the country — continue to see sales lag.

Lithia Chevrolet of Caldwell halted operations last month, moving inventory and some employees to Lithia's other branches in Boise and Meridian. In recent years, other dealerships such as a Harley-Davidson retailer have also moved out of the city to focus business on more central locations in the valley, such as Nampa, Meridian or Boise.

Even more than lost sales revenue, the biggest impact of shuttered auto dealerships is increased unemployment, says Steve Fultz, economic development director for Caldwell and Canyon County.

"As long as the buildings are still up, the property taxes are going to be paid by whoever owns the facility," Fultz said. "It's more of a job loss issue."

A spokesman for Lithia declined to comment on the number of employees impacted by the Caldwell closure.

As the economy recovers, Fultz is optimistic about shoring up vacancies at high-traffic, high-visibility commercial spots such as the Lithia site. Fultz said the commercial sector slump has probably just recently hit bottom, and city development officials have already begun to seek ways to fill in key vacancies.

"The bad news is businesses are moving out; the good news is they're leaving highly desirable locations," Fultz said. "We've got some attractive sites for people to take a look at when the economy does make a turn."

Although city officials take a mostly hands-off approach to luring new retailers, they have shown off some industrial vacancies to basic sector companies in recent months. Several undisclosed companies have made recent offers on sites, Fultz said.

Caldwell car dealer optimistic

Lanny Berg, owner of used car lot Lanny Berg's Auto Center on Cleveland Boulevard, sold his former Chevrolet of Caldwell dealership to Lithia in 2001 after he was diagnosed with cancer. In its heyday, Berg employed more than 80 people at the Lithia site, though business had begun to slip before he sold it.

Berg has run car dealerships in Caldwell for three decades and believes the city's auto sales industry has the potential to rebound again as the economy picks up.

"I really want to emphasize that Caldwell is a good car town, and I really believe there's opportunity here," Berg said. "I think it's just the economy and the times we're in now. But I'm still a believer that there's still business to be had here."

Berg said about a year ago he was approached by real estate brokers about possibly reacquiring the Lithia site. But Berg has considered retirement the past year, and he even put his Lanny Berg Auto site on the real estate market to test the waters.

Still, at this point Berg plans to stay in business indefinitely.

Sales at his used car lot picked up over the summer, he said, and he has sought to raise additional revenue through diversification — he opened a laundromat on the property last year and has leased additional space on the lot to a compost business.