Buffalo Grove board OKs sales tax split with Rohrman car dealership
Buffalo Grove village board members may not be happy with having to provide economic incentives to bring a Bob Rohrman car dealership back to the Dundee Road corridor.
But with competition hot and heavy from neighboring communities, they realize that philosophical integrity doesn't always bring in retail sales taxes.
Within a week or two, Bob Rohrman will be open for business again in Buffalo Grove.
On Monday, the village board approved a 50-50 split of sales tax revenue with Bob V. Rohrman that paves the way for a new Rohr-Max at 935 W. Dundee Road on the site of the former Arlington Toyota dealership. Rohr-Max is Rohrman's used car brand.
"The market is coming back. We're excited. Rohr-Max is doing great in Hoffman Estates," said Mark Battista, representing Bob V. Rohrman. "We believe that it's going to be a great asset to the community, with a positive impact. We're going to sell a lot of cars. We're very happy to come back to the village."
The agreement rubbed resident Brian Costin the wrong way.
"This is tax cronyism," he said, saying it would give Rohrman an unfair advantage.
"It's equivalent to picking winners and losers in the economy," he said.
He also asked whether it was fair to other businesses in Buffalo Grove that they don't get the same deal as Rohrman.
"There should be one set of rules for businesses," he said. "There should not be one set of rules for businesses with clout and a different set of rules for everyone else."
But Village President Jeffrey Braiman and several trustees pointed out the advantages in increased sales and property taxes, as opposed to leaving the property to grow weeds.
Trustee Jeffrey Berman referred to the decision as a "Hobson's choice," the classic dilemma between two undesirable outcomes.
Noting that Rohrman's group is the largest auto group in the Midwest, he continued, "He has insisted that in order to use the properties he owns and has left fallow for several years, he needs a sales tax handout from the village. He has also made a not so subtle threat that if we don't agree to give him a portion of the sales tax, that there are other communities ready, willing and able to do so - and those dealerships and those opportunities will go elsewhere. And we have seen him do that previously," referring to the Nissan dealership that moved from Buffalo Grove to Arlington Heights.
But he pointed out that "it's a sales tax sharing agreement. It means it's not a zero sum game. He doesn't get it all. And nothing is coming out of the pockets of the taxpayers up front.
"We are not somehow immune from that competition between us and our neighboring communities, and as galling as it may be to hand money to a business that makes over a billion dollars in gross sales a year, I don't begrudge Mr. Rohrman's efforts to use the system to his advantage. The system is set up by the state law. It is what it is. And we shouldn't condemn a business for taking advantage of the opportunities that state law provides them."
Battista reminded trustees of Rohrman's history in Buffalo Grove. He said that when Rohrman relocated its Nissan dealership to Arlington Heights, it opened up a new Saturn store in the Buffalo Grove location, only to see General Motors close the division. Shortly after, he said, the Chrysler/Dodge/Jeep franchise was revoked in a corporate bankruptcy that closed about 875 stores.
"So that left us with two vacant stores for a very long time," he said.
He said the properties have been for sale for the last six years, and while there were several valid offers, they would not generate nearly the sales tax revenue.
The former Toyota property is one of three adjacent properties Rohrman owns - the other properties are also potentially part of the incentive package, which calls for a 50-50 split of the municipal sales tax generated from the site over a 10-year period. The maximum incentive is $1.5 million for one franchise/dealership, $2.5 million for two and $3.5 million for three. Each franchise would have to reach a base of $10 million in gross sales before the incentive kicks in.
Deputy Village Manager Jennifer Maltas said the dealership plans to sell between 100-120 cars per month at an average price of $18,500 per vehicle.
Unlike Costin, longtime resident George Krug endorsed the deal. "If it's the same as CarMax, it's a good deal."
To which Battista responded, "It's a better deal, because it's Rohr-Max."