"It's needed to be done for a long time," said Mark Cleland, corporate treasurer of Ernie Palmer Inc.
The project is one of about a dozen Duval County projects to build or renovate dealerships in the wake of a resurgence in auto sales since the recession.
The Ernie Palmer Toyota property is at 1290 and 1310 Cassat Ave.
The used-car operation at 1290 Cassat Ave. will be demolished and the site rebuilt as a 43,000-square-foot structure.
It will offer new and used cars, parts, service and Toyota Rent-A-Car and also a renovated detail shop of about 7,000 square feet.
The existing Ernie Palmer Toyota new-car dealership at 1310 Cassat Ave. will be demolished and the site will become a parking lot to store vehicle inventory.
Cleland expects the project to be completed by June.
Plans filed with the St. Johns River Water Management District show the project will involve 6.77 acres. EMK Consultants of Tampa is the project consultant.
Site construction plans show the existing buildings total 49,416 square feet.
Property records show the two addresses comprise five buildings owned by Westside Toyota Inc. and Palmer Cleland Realty of Jacksonville LLC.
Cleland is an officer of both companies.
Cleland said Palmer Cleland Realty owns the property and will lease it to the dealership upon completion. Family members own both entities.
The structures were built in 1970-71, with a small building added in 1979. The property and buildings carry a 2012 taxable value of almost $2.5 million.
Westside Toyota was incorporated in 1974 at 1310 Cassat Ave. The name was amended to Ernie Palmer Inc. in 2007.
Auto dealerships are responding to increased customer demand.
State revenue records show that taxable auto and accessories sales in Northeast Florida dropped to $203.8 million in November 2009 and in June were 62 percent higher at $331.5 million.
The Federal Reserve Board's Sept. 4 Beige Book report about economic conditions said that in its Atlanta district, which includes Florida, auto sales are rising.
"Automotive dealers noted that year-end projections are being revised up as truck sales strengthen mostly from contractors purchasing vehicles again," it said.
"Of late, auto sales are up and so are prices," said University of North Florida economics professor Paul Mason.
"Retail automobile sales is a competitive business and appearances of the dealership say something to customers about the quality of the staff and the vehicles," he said.
Mason said the recession created a pent-up demand for cars and trucks, "so these dealers are doing what they can to earn the business of these new and replacement buyers."
Ernie Palmer Toyota is gearing up for a $7 million redevelopment of its West Jacksonville dealership.