The Steele’s Cycle Story: From Renting To Owning
The showroom holds many bikes and lots of gear.
After about 10 years, Rick Steele owned and was making a success of his business, Steele’s Cycle, but what he wanted most was to own the property, rather than continuing to pay rent. He started trying to buy the whole property, but his landlord, Fred Neuschwanger, would not sell, saying he didn’t want to pay the taxes he would incur from capital gains. Rick kept asking to buy and was told that if the time to sell ever came he would be given first shot at buying.
The thing about capital gains is that if you die holding an asset, and that asset goes to an heir, the heir’s cost basis is reset at the value at the time of death. So when Fred Neuschwanger died, and the heirs agreed they did not wish to continue dealing with the property, they could now sell without incurring a huge tax bill.
The property was finally offered to Rick.
The deal was pulled together in late 2007 and early 2008, and by that time Rick had a partner and the two of them were able to come up with the money. At the closing Fred Neuschwanger’s daughter showed up with a picture of her dad, saying she just wanted to bring her dad along because he had always promised to give Rick the chance to buy the property.
Matthew Morrison is Rick Steele’s partner.
Now the clean-up/fix-up of the property got into full swing. The main building got a new roof, walls were built inside and everything got a lot cleaner and more organized. Distinctive older bikes were mounted on the walls or from the ceiling and a proper showroom was set up for used bikes. Racks were put on the walls and a wide variety of motorcycle gear was put up for sale.
“In the early days, yeah, we sold tons of parts through here,” Rick explained. “But brick and mortar’s dying a slow death. You know, where we sell stuff is, ‘I need a set of brake shoes but I need it today.’ That’s the only brick and mortar advantage anymore. Before the internet, the yard was a good thing. The yard anymore is not what it used to be. The internet’s changed all that. But like Matthew says, there is a draw to it. We have people all the time, oh, can I walk in the yard? It’s just interesting.
“The salvage yard has always been what I describe as an attractor for people to come here. But we weren’t generating much money out of the salvage yard. It was all online. So we really focused on growing that side of the business. I mean, we went bananas. We grew it to 50,000 parts listed on eBay, but it became unmanageable and we ended up cutting back.”
eBay. That’s the key word. Right around the time Rick was able to buy the property, changes in the world around them altered the entire landscape. In July of 2006, this new marketing concept called eBay had emerged and Rick had immediately seen the possibilities it presented. They could list parts on eBay and suddenly the entire world became their market rather than just the Denver area.
There are still plenty of bikes waiting in the yard to be picked over by people needing parts.
Next: Motorcycle Salvage
Biker Quote for Today
Getting to be an old Geezer is not for the TIMID!! Also its not grey its CHROME!!
Tags: Steele's Cycle, Steele's Salvage
