Libertyville auto dealer incentive gets first taker

The first taker has surfaced for an incentive program crafted two years ago by Libertyville officials to help car dealers expand or upgrade their facilities.

CESM LLC, doing business as Libertyville Chevrolet, 1001 S. Milwaukee Ave., is the first of about a dozen eligible dealers included within three special districts to seek a sales tax rebate.

Under the program, dealers can recoup up to half of their investment on expansion or rehab projects. Libertyville Chevrolet would be eligible for up to $352,000 in rebates for remodeling completed in mid-2009. The renovation included new windows as well as replacing the 40-year-old aluminum siding.

“It looked like 1969,” said owner Jim Spellman. “It's not good for the village, it's not good for your business.”

The village in late 2008 created three business districts as a mechanism to offers sales tax incentives for dealers to refresh or expand facilities.

Spellman said the incentive was a “big part” of the reason he remodeled.

“We did it during the toughest time of the recession. The timing was perfect, really. Business is picking up fairly dramatically.”

Spellman said new car sales were up 30 percent and used car sales up 20 percent in 2010 compared to 2009.

The village board is expected to approve the agreement with CESM during its regular meeting Tuesday night.

A destination for car shoppers for 40 years, Libertyville's auto row remains critical to village operations.

Although sales have dropped significantly in the past decade, the automotive category still provides about 58 percent of all village sales tax revenue. That amounted to nearly $3.2 million in sales tax in 2009, the last full year for which statistics are available.

The business districts were authorized in late 2008 by a village board that changed significantly after the election the following April.

Libertyville does not offer incentives as a general practice.

“The incentive is for them (auto dealers) to stay, not to give someone that's coming in a benefit,” said Mayor Terry Weppler, who was not in office when the districts were created. “It's reasonable.”

The dealer gets a percentage of any sales tax over the threshold, but not the entire amount in a given year.

“That protects the village from having to pay out taxes we've been receiving over the years to provide village services,” said Heather Rowe, the village's economic development coordinator.

At least 25 percent of any dealer project has to be dedicated to exterior or site improvements.

“I think you're going to see more because the manufacturers want dealers to reinvest,” Spellman said.

Two other dealers have completed applicable projects but have not applied for the rebate.

“The worst is over for the dealers. Sales are up,” said Glenn Bockwinkel of Acura of Libertyville and head of the Libertyville Mile of Cars dealers' group.

The village tried another measure in the summer of 2009, committing $65,000 to new car buyers.

Each of the 13 dealers was given 50 vouchers valued at $100 each which customers could redeem for gift cards good only at local businesses.

While only about half the funds were paid out, village officials said the publicity and subsequent cooperation among the dealerships was worth the gamble.