Elgin hopes to boost Randall Road auto mall
A request from the developer of the Randall Road auto mall to receive $515,000 of some $3.5 million in incentives ahead of time was approved by Elgin city leaders this week, but not before raising a few eyebrows.
The developer, Randall LLC, hopes the move will lead to a second dealership opening soon.
"Let's get another dealership out there," said Peter Bazos, attorney for Randall LLC. "That mall needs some momentum."
City officials two years ago signed off on a plan to bring nine high-end car dealers to 86 acres at the northwest corner of Randall and Interstate 90.
The McGrath Honda was the first dealer to open in September, and McGrath wants to buy a second lot at the site, but for $2 less per square foot than the bank that owns it prefers.
So Randall LLC asked the city council for $515,000 of the $3.5 million promised to the developer to bridge the gap and ensure the sale takes place now.
Once a third dealer opens at the site, the city is slated to give $3.5 million to Randall LLC to help pay for some $7 million in infrastructure costs.
Mayor Ed Schock said he considered the matter an advance on money the city had already committed.
"We're the ones who really wanted an auto mall at that site," he said. "We can't go back now and say we want to put a retail store there."
Councilman David Kaptain said he considered the request to be a loan and he wanted the first year interest-free but following years charged at the rate for municipal bonds, which is about 2 percent to 3 percent.
Kaptain pointed to how the city was charging interest on a 50-50 cost sharing program for repairs needed to help homeowners in areas that flood because of inferior sewers.
"It sets a bad precedent," Kaptain said.
Council members Robert Gilliam and Richard Dunne also favored this move, but they fell short of the four votes needed.
Bazos said McGrath is projecting first-year sales of $65 million, which would generated $650,000 in sales taxes for Elgin.
Overall, eight total sites still remain. The city has added Toyota to the list of acceptable car brands for the site. Other preferred dealers include: Acura, Audi, Volvo, Cadillac, BMW, Lexus, Infiniti, Jaguar, Mercedes, Porsche, Lincoln, Land Rover, Volkswagen and Saab.