Building improvements have long been complete at Weil Cadillac Inc. in Libertyville but the dealership has been approved for a village incentive that could be worth nearly $2.6 million.
That represents half the cost of an extensive renovation of the buildings and grounds that was finished in June 2006 — the maximum incentive available under the 10-year agreement.
The village did not approve a dealer incentive program until December 2008 but it was crafted to allow projects completed up to three years earlier to apply, an indication of how important the dealerships are to the community.
Trustee Rich Moras was not on the village board when the incentive plan was created but said he supports the concept.
“The key is to get the car dealers to continue to put money into capital improvements and ultimately, that’s what will keep them in town,” Moras said. “The success of the dealerships is inextricably tied to the success of the village itself.”
As structured, the incentive is not an outright grant or rebate but a percentage of any “new” sales tax revenue beyond the three-year average from 2010 to 2012. In this case, Weil each year would get 30 percent of any sales tax revenue generated beyond that threshold, which is not disclosed because it is considered confidential and proprietary information.
Auto dealers for generations have been the village’s largest and most important source of sales tax revenue. Thirteen dealerships comprise the “Mile of Cars” promotional partnership.
While not broken out individually, dealers and other businesses in the automotive and filling stations category for state reporting, generated nearly $3.7 million in sales tax revenue for Libertyville in 2012 — about 60 percent of the village’s share of all sales tax revenue collected. The village board on Tuesday unanimously approved Weil as the third dealer to receive an incentive. Libertyville Chevrolet and Libertyville Lincoln were the others. The total investment for the three projects was nearly $7.6 million.
Heather Rowe, the village’s economic development coordinator, explained that dealerships are pushed by manufacturers to upgrade their facilities at a significant cost.
“It’s an investment they’re making for the long term for the dealers to remain in the community,” Rowe said.
Dealers are eligible for up to one half the cost of renovation under Libertyville’s incentive program, but whether they get to that figure is dependent on the growth in sales, she added. All the agreements are for 10 years, but there is a provision for a five-year extension with village board approval.
The village’s share of auto and related sales tax revenue dipped to a low of less than $3.2 million in 2009.
“We have started to see some growth again in the auto sector, which demonstrates an improved economy and strengthening of that auto district,” Rowe said.Copyright © 2014 Paddock Publications, Inc. All rights reserved.