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updated: 1/14/2013 11:24 PM

St. Charles looking to lure RV company with $250,000 in incentives

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St. Charles is looking to become a destination for buyers of recreational vehicles in a new plan to lure one of the largest RV dealerships in Iowa to the city.

Aldermen reviewed an incentive package that would give US Adventure RV $250,000 to come to St. Charles. The money from the city would come in the form of sales tax rebates to the business for up to six years after it opens its doors.

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The incentive package is front-loaded, but it includes guarantees for the city.

In the first year, the city would rebate 75 percent of the municipal sales tax it would normally charge on transactions at the business. For example, on a $100,000 transaction, the city would normally collect $1,000 in sales tax. Under the agreement, the city would give $750 of that tax back to the business.

The rate of the rebate shrinks by 5 percentage points every year after that. Years five, and possibly six, would rebate up to 50 percent of the municipal sales tax to the business.

Meanwhile, the city will still collect rental and home rule sales taxes on qualifying transactions. There is also a clause that requires US Adventure RV to stay in the city for at least 10 years. If the business were to leave before then it would be required to pay back all the incentives.

Representatives from the company expect to do about $45 million worth of sales by the fifth year. It will operate with about 21 employees with an average salary of about $42,000 per year.

"But for this agreement, economically, this project will not move forward," said Chris Aiston, the city's director of economic development. "It costs money to make money. In either case, it's new money. They've proven through their submittals there is a huge cost in relocation. The reimbursement seems fair."

Aldermen peppered city staff members and a representative of the company with a series of questions but ultimately directed them to proceed to a final version of the agreement.

Mayor Don DeWitte put an end to most of the questions by putting the pending deal in perspective.

"How many $40 million to $50 million businesses do you have lined up at your door waiting to come to St. Charles?" DeWitte asked Aiston, knowing the answer would be none.

If approved, US Adventure RV would lease and expand off a section of the Harley-Davidson dealership on Randall Road.

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