Industrial building proposed to help fill Elgin auto mall
Eight years after the creation of the sparsely occupied Elgin auto mall, the city council will consider allowing the construction of an industrial building there.
The auto mall on Randall Road off Interstate 90 has two tenants - McGrath Honda, which opened in late 2009, and a Volkswagen dealership opening this week. The auto mall was approved in 2007 and consists of 86 acres divided into nine lots.
The auto mall was acquired by Forecom Challenger and its parent company U.S. Bank after the property went into foreclosure in 2013.
The proposal seeks rezoning of two lots at 2640 and 2650 Auto Mall Drive, nearly 17 acres combined, and approval of a new 257,313-square-foot industrial building with up to four tenants. That would leave five empty lots for car dealerships.
Todd Vezza of Zilber Property Group, who submitted the petition, did not return a request for comment.
Chris Moran, general sales manager of the Volkswagen dealership, said he has no objections to industrial uses at the auto mall. "Any new neighbors could be good for business," he said.
As for the lack of tenants at the auto mall, "I think we're confident (about long-term success)," he said. "I think the development along Randall Road has been very promising."
Black Friday is the target date for the Volkswagen dealership's grand opening, Moran said. The dealership is part of Slevin Automotive Group, which is based in Hoffman Estates and also owns four Nissan dealerships, he said.
Gary McGrath, president of McGrath Honda, did not return a request for comment.
The proposal will be considered by the city council Wednesday. Elgin Corporation Counsel Bill Cogley said details of the rezoning agreement are being negotiated.
The city would exempt the rezoned industrial lots from sales and property tax rebates required for auto dealerships, Cogley said. The auto mall development agreement calls for the city to disburse about $5.6 million in incentives over time as car dealerships open, Cogley said, but industrial lots would be exempt.
"The bank's attorneys indicated they had some concern about that, but I also told them I would not be recommending a callback of that incentive amount," Cogley told the city council Saturday. "We're not getting the full benefit of our bargain."
The best use for those two parcels is no longer an auto dealership, Elgin Area Chamber of Commerce President Carol Gieske said, attributing the lack of tenants there to the economic recession in 2008.
The original developer had an agreement with Pancor Construction and Development LLC, which owns a neighboring industrial subdivision, to build only car dealerships at the auto mall. Bob Malm, director of the Elgin Development Group, was instrumental in helping all parties come to an agreement, Gieske said.
The rezoning and new industrial tenants "will yield property taxes that will benefit the city and other taxing bodies," Gieske said.