Palatine approves Kia dealership's expansion plan, recommends tax break

Palatine village council members approved plans this week for the remodeling and expansion of the McGrath Kia dealership on Dundee Road.

Planned improvements for the 4.75-acre site include a new and larger showroom at 1400 E. Dundee Road and an accessory detail center at 1520 E. Dundee Road.

Council members also recommended that Cook County grant the dealership a 7C property tax incentive. The incentive, which lowers the assessment of the property for five years, would offset some of the project's expense, said Palatine Community Development Director Mike Jacobs.

According to village documents, the combined investment for the two properties will be approximately $8.8 million.

The Cook County Board will make the final decision on whether to grant the site a 7C incentive. If approved, the property's assessment will be reduced to 10% of fair market value for first three years, 15% for the fourth year, and 20% for the fifth year, before returning to the normal 25%.

Palatine previously recommended similar requests for improvements at Mazda, Subaru, and Volkswagen dealerships.

In a letter to the village from the law firm representing the McGrath family, the expansion involves tearing down the front part of the building and leaving the service department untouched. The approximately 12,300-square-foot addition, which will bring the size of the building to 27,000 square feet, will include a showroom, offices, repair reception and related uses.

Expected to cost $7.8 million, the project is slated to begin in July. The dealership expects to add 25 employees, bringing its total to 85.

The detail center at 1520 W. Dundee will include three detail bays, a small office, storage and a car wash. It will be built at an estimated cost of $1 million and is expected to create 20 jobs - six full-time and 14 part-time.

"The costs of these projects are substantial and will cause significant reassessment of the properties," the law firm's letter states. "The sales of automobiles have become significantly more expensive. Our labor costs have continued to grow. The combination leads us to request the tax abatement as a way of offsetting some of these increased costs."