An auto dealer in Glen Ellyn says his business is staying put for the foreseeable future thanks to a sales tax sharing agreement approved by the village board Monday.
Jerry Haggerty, owner of a Chevrolet dealership at 300 Roosevelt Road, approached village officials early last year in hopes of getting back a portion of local sales tax revenue after receiving a mandate from General Motors to do nearly $1.5 million in upgrades to his facility.
Haggerty said he couldn’t afford the complete cost of GM’s so-called “image enhancements” without the village’s financial assistance. And, he says, he might have had to close or move.
The agreement approved 5-0 by the board calls for Haggerty to receive 80 percent of incremental sales tax revenues the business generates and the village to retain 20 percent above a base sales tax revenue amount of $224,400, during a 10-year period. The revenue sharing goes to a 75-25 split for the final five years of the agreement.
The base number reflects the amount of sales tax and home rule sales tax revenue collected in 2011.
The arrangement would end once Haggerty collects $850,000, or the 15-year term is complete, whichever occurs first.
Under the agreement, Haggerty would return half of the reimbursement if the business leaves town during the first five years.
“We wanted to stay put, and Glen Ellyn helped us achieve that,” Haggerty said. “It would’ve put a large financial strain on our business having to absorb $1.5 million in improvement costs. They provided a way for us to do the improvements.”
Village Manager Mark Franz said the dealership has brought in substantial sales and property tax revenue to the village and is an anchor of the Roosevelt Road commercial corridor. And since the agreement only returns sales tax revenue above the base on a performance basis, Franz said it would have a limited impact on the village’s budget.
Trustee Peter Cooper said he initially hesitated to approve the deal, but ended up favoring it since it locks in the village’s existing sales tax revenue.
“They’ve been a great corporate citizen over these many years. They’ve done much for the community. It’s nice to be able to help them as well,” Cooper said.
At the onset of negotiations, Haggerty asked village officials for at least $1 million in reimbursement costs, and the village offered to cover half the dealership’s total costs.
Haggerty has a sales tax sharing agreement in place with Villa Park to reimburse up to $800,000 in improvements at his Buick GMC dealership further east on Roosevelt Road.
The sales tax revenue sharing in Glen Ellyn goes into effect next year, provided that the facility improvements are made.Copyright © 2013 Paddock Publications, Inc. All rights reserved.