Algonquin proposes incentive to Hyundai dealership

Algonquin is pulling out the stops to ensure the Rosen Hyundai dealership continues to succeed.

To that end, leaders have come up with an incentive package they say will benefit both parties.

Earlier this week, the village granted preliminary approval for the dealership to build an addition onto its existing building near Randall and County Line roads.

That addition would house showrooms, offices and maintenance services exclusive to Hyundai's new Equus line, a luxury automobile in the $60,000 price range.

The village also offered initial approval to give the dealership a $450,000 rebate in sales tax revenue over the next 10 years.

If Rosen exceeded its sales, it would keep 75 percent of the extra revenue and turn 25 percent over to Algonquin, according to village officials.

This gives Rosen an incentive to keep its business booming, said Russ Farnum, Algonquin's director of community development.

Village officials are also hopeful the expansion drives other business to the area.

“That really creates a nice situation for the village and for Mr. Rosen,” Farnum said, adding that car dealerships are the “crown jewel” of sales tax revenue generators.

If Rosen doesn't meet the terms of the agreement, the dealership would return the rebate to Algonquin, Farnum said.

Right now, 3 percent of the village's $6.1 million in sales tax revenue comes from Rosen, authorities said.

Moreover, Rosen is the only business in town to ever receive tax incentives in the 16 years Village President John Schmitt has been on the board, he said.

A leader in the local auto industry says it's not unusual for towns to reward dealerships since they bring jobs and make long-term investments in their towns.

“Dealerships are very much the backbone of a lot of communities' tax base and it may sound like it's a lot of money in the short term but on a long-term basis, it's not,” said Paul Brian, a spokesman for the Chicago Automobile Trade Association. “These are solid members of the community. Who's the first door that gets knocked on for charities? Car dealerships.”

In the interim, Rosen would set up a temporary showroom and sales office near its existing dealership and start building in 2012.

The proposal now moves to the village board for final approval.