St. Charles trying to lure car dealership from West Chicago

The DuPage Expo building in St. Charles will likely have new life as a car dealership, with possible lucrative benefits for the city.

Aldermen on Monday night gave preliminary approval to a $1.5 million incentive plan that would lure a Volkswagen dealership away from West Chicago.

The deal would gut the DuPage Expo property to bring in a 39,0000-square-foot dealership with at least 65 jobs within 24 months of opening. The dealership would net the city at least $200,000 of annual sales tax revenue and increased property tax revenue once the building is improved.

To lure the dealership into the city, officials would offer the owners a two-part deal.

Part one is an $800,000 loan the city would provide to help fund the $8.3 million move. The city staff proposes an interest rate of 6 percent, which could result in a repayment of $992,866 to the city.

During part one of the plan, the city would put 75 percent of the sales tax generated by the dealership toward repaying the loan. The remaining 25 percent would go straight to the city's general fund. The loan would be repaid in a little under seven years.

Once the loan is retired, part two of the incentive plan would kick in.

During part two, the city and the dealership would share the sales tax generated by the business. The dealership would receive 60 percent of the proceed, with the city receiving the remaining 40 percent. That relationship would continue until the dealership receives $700,000 or a 15-year time limit is reached. That would complete the $1.5 million incentive.

The dealership, Fox Valley Volkswagen LLC, has been in West Chicago since 2006. Owner Emir Abinion tried to purchase the current location but was unable to negotiate an acceptable price. Abinion, who lives in St. Charles, decided it was time to bring the dealership home, where he also operates a Buick and GMC dealership. Abinion said the move is probably bad news for the West Chicago location because franchise agreements preclude a competing dealership from replacing it in the near future.

"It will probably sit empty like so many other empty car dealerships out there," Abinion said.

Aldermen were enthusiastic about the creativity of the incentive package and the projected future tax revenue for the city. Abinion said the St. Charles location would allow him room to expand the business, which already has $36 million in annual sales.

The full city council must still approve the deal. If approved, the dealership should be fully operational in 2016.