East Dundee gives tax incentives to auto dealer

After undergoing a $1.8 million renovation, the Cucci Ford automobile dealership in East Dundee will receive some financial assistance from the village.

Cucci Auto Group, LLC, which owns and operates the dealership at 800 Dundee Ave., was required to upgrade its facility to meet new Ford Motor Co. standards, Village Administrator Bob Skurla said. The recently completed project included expanding the building and improving its facade, service center and show rooms.

The village board voted unanimously Tuesday to approve a redevelopment agreement with the dealership to help offset the cost of such enhancements. Using a pay-as-you-earn model, East Dundee agreed to reimburse Cucci for $527,839 of the overall project costs from tax increment financing funds and business development taxes.

The agreement fulfills a two-year-old inducement deal in which the village promised tax incentives if the dealership redeveloped its property. At the time, Skurla said, the dealership was considering moving to another municipality.

"If we wanted to maintain the dealership here in town, they had to upgrade," Skurla said. "Knowing they are a very valuable retail contributor for us, we wanted to make sure they were happy."

The dealership is within the village's Dundee Crossing TIF district, which covers parts of Routes 72 and 25. In a TIF district, property taxes that go to local governments are frozen for 23 years at a certain level, set on a base assessed property value. Any taxes generated above that level can go back into redevelopment.

As part of the redevelopment agreement, the village will give Cucci 90 percent of all incremental property taxes generated from the dealership site.

East Dundee also will reimburse Cucci the full 0.75 percent incremental sales tax it charges customers within a business development district.

The village will distribute those funds annually until its financial obligation is paid off.

That payout is dependent on the dealership's success, Trustee Rob Gorman said, meaning the project is essentially paying for itself.

"That's the beauty of these kinds of agreements. If they don't get enough increment, it doesn't get paid out," he said. "This is the way we should be doing redevelopment agreements."