Lombard defends cabinet shop’s retail grant

When the Lombard village board voted to give an $11,000 downtown retail grant to Cabinet Depot, trustees said the money would support a business that’s filling a vacancy and attracting shoppers.

But one Lombard businessman says the board may have disregarded its own grant requirements by giving money designated for retail shops to a wholesale business.

“Why would you give a retail grant to a business that has only shown wholesale sales?” said Tom Masterson, who owns an insurance business at 128 W. St. Charles Road.

A letter from Cabinet Depot’s New York-based accountant, the store made only wholesale revenue during the first quarter of 2011, at an average of $30,000 each month in February and March.

Trustees say their 5-1 decision to award the grant hinges on the definition of retail and wholesale sales.

“It’s just amazing to me that we have a business that’s willing to open up and take a chance right away and the word ‘wholesaler’ becomes a dirty word,” said Trustee Keith Giagnorio, who voted in favor of the grant. “Maybe (Cabinet Depot) will do 50 percent retail, I really don’t know. I think it’s more than fair to give them a chance.”

Lombard Finance Director Tim Sexton said the definition of retail versus wholesale centers on sales tax revenue. As long as the store charges sales tax on the majority of its sales, he said, it can be considered a retail establishment, no matter if the customer is another business, a contractor or an individual.

Cabinet Depot owner Howard Pang said at an April village board meeting he intends to charge both contractors and handy homeowners sales tax on their purchases.

“On that basis, the business meets the requirements, and the use of wholesale versus retail doesn’t change the fact that 100 percent of sales will be taxable,” said Trustee Peter Breen, who voted for the grant.

Pang would not be able to charge sales tax only if a customer presents an exemption from the state, said Sexton, who once worked as a sales tax auditor. He anticipates most contractors who will shop at Cabinet Depot will not have resale exemptions.

A retail establishment is further defined by the Lombard zoning ordinance as a shop that primarily sells merchandise “for use or consumption by the immediate consumer.”

Both contractors and homeowners can be considered immediate users of cabinets the store plans to sell, said Bill Heniff, director of community development. As a home improvement store, Cabinet Depot is one of the desired uses for downtown properties outlined in the village’s recently completed downtown revitalization plan, he added.

“If we’re going to bring our downtown around, it doesn’t need the same shops that every other downtown has,” Breen said. “It needs unique shops.”

Masterson said he plans to question trustees about the Cabinet Depot grant at Thursday’s village board meeting, asking them to bring it up for another vote.

Trustee Bill Ware said another vote is unlikely. He said he is confident the business will make enough retail sales to justify the grant. He stands by his “yes” vote as a good decision, as do the others who voted with him.