Hyundai dealer to anchor Palatine’s newest tax district

Just minutes after Palatine officials Monday approved establishing a fourth tax increment financing district, a multimillion-dollar redevelopment project within its boundaries received the village council’s go-ahead.

The Patrick Dealer Group plans to open Patrick Hyundai Palatine at the southeast corner of Lake-Cook and Rand roads in what will be the automotive group’s ninth Chicago-area dealership.

The village will provide up to $5 million in direct TIF assistance and up to $225,000 for road improvements.

To start, Patrick will receive $2 million to help offset land acquisition costs that will exceed $4 million total. Patrick would then get another $1 million after it opens and up to $2 million more for eligible expenses such as demolition and site preparation.

“The project will be self-supporting,” Village Manager Reid Ottesen said. “Over the term of the 23-year TIF district, it’ll generate far more revenue for the village of Palatine than what the village is putting into it.”

Municipalities use TIF districts as a tool to provide developers with financial incentives. As property values rise, TIF districts capture property tax revenue above a set amount that can be used to fund improvements within the district, rather than go to local governments.

Ottesen noted that a Joint Review Board, consisting of representatives from the more than 10 local taxing districts, unanimously recommended approval of the village’s fourth TIF district.

Palatine expects the 30,000-square-foot dealership will initially generate $300,000 in annual sales tax receipts and increase to roughly $500,000 each year. The project is expected to bring in at least $6.7 million total, as well as help rejuvenate what officials deemed a blighted area.

Patrick, with no assistance from the village, is working to purchase about eight separate properties in the six-acre site. Patrick representatives Marty Stilwell and Mark Raymond said the parcels included vacant lots, a used car broker and a cabinet maker.

They expect to close on the land acquisitions in mid-October, break ground in November and hopefully open in fall 2013.

“We’re very confident that the dealership will be successful in Palatine,” Raymond said.

The new TIF district covers 110 acres in the area of Rand and Lake-Cook roads. An eligibility study determined that 41 percent of parcels are in deterioration, 84 percent have inadequate utilities and that the overall equalized assessed value has decreased four out of the last five years.