One of the nation’s premier collector-car auction houses, Scottsdale's Russo and Steele, is revving up for its annual auction in Newport Beach, California, just weeks after scoring its most successful auction to date at Salt River Fields at Talking Stick.
Initial results show the company’s sales reaching $22.1 million at its new auction venue at Salt River Fields, a seven-figure increase over Scottsdale's 2016 event, says CEO and owner Drew Alcazar. Russo and Steele sold 800-plus cars in just four days and, according to the company, it was Scottsdale’s only major auction house to garner two consecutive years of positive growth momentum. One of its most notable sales this year was a 1954 Mercedes-Benz 300 S Cabriolet A, which fetched a hefty $423,500.
The concept for Russo and Steele began in 2000, when Alcazar resigned from Barrett-Jackson after a five-year run as general manager of the Scottsdale auction house.
“We wanted a little different take on the collector-car auction,” Alcazar said. “We wanted a presentation that was more of an intimate, boutique-style auction. That’s how we envisioned it originally, on an eight-foot table from Home Depot and a 256 computer in the back room of my house.”
The very first Russo and Steele auction was held in 2001 and featured just 75 cars, of which only about a dozen sold. The company's fortunes have changed considerably since then. It hosts annual auctions in Newport Beach in early June and Monterey, California, in mid-August. Meanwhile, a recent study from Applied Economics found that Russo and Steele contributes about $51 million to the local economy.
According to the study, 40,000 to 50,000 attendees come to the weeklong event in Scottsdale each year, and 81 percent of those visitors come from out of state. The auction generates $1.1 million in sales and lodging taxes for the city and county, plus $1.5 million in state sales taxes, resulting in $2.6 million in tax revenues in a single week.
Who are Russo and Steele, you may be wondering? They’re not people at all. Alcazar didn’t want to name his auction for himself. Instead, Alcazar wanted a name with some relationship to automobiles. As it turns out, the dark red on vintage Ferraris is called Rosso Rubino. So, he anglicized a name that relates to European sports cars and paired it with Steele, which represents the American muscle cars.
“It had a nice ring to it,” Alcazar said. “So, Russo and Steele was born, representing the types of vehicles that we sell.”
Joe Ritz is the owner of Sports & Collector Car Center in Tempe, who does business with Russo and Steele. Ritz has been in the business since the 1970s and has worked with Russo and Steele on both sides of the aisle, both buying and selling. Ritz says he has dealt with all of the auction companies and enjoys the professionalism he encounters at Russo and Steele.
“To sum it up, it’s more of a one-on-one, more intimate relationship for buyers and sellers than I’ve experienced with other auctions,” Ritz said. In the dog-eat-dog environment for expensive, classic and collector cars, Russo and Steele manages to separate itself from its competitors, he says.
“The personnel have all been there for quite some time, starting from the top down. So, there’s a familiarity built in that is refreshing and comforting, instead of the awkward questions and uncertainties,” Ritz said.
Many in the auto industry see automated cars as the future, making drivers a thing of the past. If people come to view cars as mere shuttles, allowing them to work, read or even sleep while being chauffeured around, that might eventually hurt the sales of classic cars. Alcazar, however, isn’ the least bit concerned.
“There is probably going to come a time when there is more automation with Uber and those types of things,” he said. “But when the time comes that you do want to enjoy your automobile and enjoy your driving experience, there are few better ways to do that than with a collector car."
There is evidence in the current collector-car market that Alcazar might be on to something. Many car enthusiasts long for an authentic driving experience that allows them to do more than simply aim the car in the right direction.
"For example, Ferrari no longer offers a manual-shift gear box," he said. "Everything is now a paddle shift, automatic-type hybrid. Those are wonderfully well-engineered automobiles that can shift faster than Michael Schumacher in his best F-1 car, but they have taken some of the fun out of driving. So, in the marketplace, you’re now seeing the six-speed cars and the manual shifts being coveted by collectors. There has been a large resurgence in their value."
Alcazar is unquestionably optimistic about the collector-car culture and believes it is here to stay, at least for the foreseeable future.
"The collector-car market is always going to be strong and healthy, simply because of that sort of visceral, emotional, immersion experience that a collector car is going to give you," Alcazar said. "You’re not going to get that in anything else.”