Wauconda to share tax with expanding business, but owner isn't happy
A Wauconda business planning a significant expansion has struck an unusual tax-sharing deal with village officials to help pay for a new fire sprinkler system.
Monster Powersports, a motor-vehicle retailer at 315 N. Rand Road, is expanding from its current 8,000-square-foot space into the rest of the building.
By law, owner Scott Cook needs to add a sprinkler system that could cost between $80,000 and $100,000, Village Administrator Doug Maxeiner said.
The tax-sharing deal will help Cook defray those costs. It also gives him 10 years to install the equipment, even though local regulations require sprinklers to be in place before occupancy.
Even so, Cook isn't happy with the deal. He's frustrated village officials are forcing him to install sprinklers.
Agreeing to the deal will cost less than fighting the village in court, he said.
"I have no other choice," Cook said.
Without the tax-sharing deal, Cook said he either wouldn't expand or would move the business to another town.
But he also acknowledged he'll be safer with sprinklers in the building.
The expansion already has begun, Cook said, and it could conclude this summer.
The village board approved the deal Tuesday night.
Under the agreement, the village will continue to collect all of the local sales tax generated by Monster Powersports until that total reaches $16,000 annually.
Once that threshold is crossed, the village and the business will split the tax revenue equally.
Monster Powersports' share of the cash will go into an escrow account controlled by the village. The business will get the money in the account once the sprinklers are installed, Maxeiner said.
The pact assumes sales - and thus sales-tax revenue - will increase once the business has more space for more inventory, Maxeiner said.
"By limiting the shared revenues to the new sales-tax revenues, the village is not losing any existing sales-tax revenues and we get an expanded business in the community," Maxeiner said.
According to the deal, the tax sharing will stop by May 1, 2025, or once the money in the account reaches $50,000.
"The sales-tax sharing with the owner will not exceed the cost of the sprinkler system and will likely be considerably less," Maxeiner said.