Arlington Hts. will rebate tax to win Des Plaines dealership
Arlington Heights will rebate one third of the municipal sales tax up to $2.25 million over 10 years to help Napleton Chrysler Jeep Dodge move its showroom from 77 Rand Road in Des Plaines, the Arlington Heights Village Board decided Monday night.
Napleton plans to operate in a site at the southwest corner of Dundee Road and Kennicott Avenue — which includes the former temporary village hall — by early next year, said Bruce Etheridge, chief financial officer for North American Automotive Services Inc.
Chrysler is requiring Napleton to relocate to Dundee Road, and other options were Buffalo Grove and Palatine, according to a report from Charles Witherington-Perkins to the village board. One of the villages offered to provide upfront tax increment financing money, Napleton officials told village staff, but the Arlington Heights site is considered a better location.
The car dealer’s representatives said the business will generate at least $4.8 million in sales tax for the village over 10 years but will have $4.5 million in extraordinary costs in developing the site. Village staff agreed to cover $2.25 million of those costs, including demolition, lost value from demolishing an office building and relocation expenses for the current tenant VTech, which makes Electronic Learning Products for young people.
The company’s plans include removing parts of two buildings at 1155 W. Dundee Road and demolishing the office building immediately to the west at 1350 Shure Drive.
Village staff and the trustees were not able to convince Napleton officials to commit to staying in the village for a specified number of years after the rebate expires in return for the help. Company officials said the future economy is too unpredictable.
However, the company will invest $20 million in the property and will not be inclined to move, said Bernard I. Citron, a Chicago attorney working with Napleton.
Etheridge said the figures he gave the village are conservative, and he projects $100 million annually in sales from the site — a level which would generate $1 million a year in municipal sales tax revenue. The company expects to sell 1,709 new vehicles and half that number in used ones each year, said Etheridge.
Both car dealers and the village are interested in enhancing a dealership row along Dundee Road. The theory is that dealerships that are part of an auto row will draw more sales traffic than ones that are in an isolated location because buyers will come there to comparison shop.
Past Arlington Heights sales tax incentive agreements have included ones for Lowes Home Improvement Center, $2.2 million in 2004; Bob Rohrman Auto Group Nissan $1.8 million in 2004; Bob Rohrman Lexus $2 million in 2008 (under construction); and Bob Rohrman Dodge/Chrysler/Jeep, $2 million in 2008.
The last project was not built and the franchise was canceled in the Chrysler bankruptcy. The Napleton ownership also lost two dealerships in that financial reorganization.
In another move the help get auto dealers on Dundee Road the village acquired property in 2001 that it made available to Arlington Heights Ford on a long-term lease with an option to buy.
“We need car dealerships and furniture stores,” said Village President Arlene Mulder, of the big-ticket businesses that generate a large amount of sales tax dollars for local government.