Aurora City Council authorizes sales tax rebate for car dealership

The Aurora City Council on Tuesday night approved a sales tax refund for an Aurora auto dealership of more than $10 million over 15 years.

The deal for Napleton Valley Hyundai, 4333 Ogden Ave., would see the dealership remodel its current operation and start a separate dealership across the street for Genesis, Hyundai’s line of luxury cars.

City council members voted 10 to 1 for the rebate, which city officials said would not only help the dealership grow in Aurora, but would keep its dealerships in the city for at least 15 years.

Mayor Richard Irvin and city officials stressed that the discounts only go into effect if the dealer reaches a certain level.

“It’s not the city of Aurora that’s donating the money,” Irvin said. “They have to do it before we give it back.”

The sales tax rebate is actually two different propositions, as it affects two different projects – the new Genesis dealership and the renovation of the current Hyundai dealership after Genesis broke.

A deal would give Napleton a $5.2 million rebate over 15 years to build the new Genesis dealership. It would be a 50-50 split between the city and Napleton each year.

The other deal would be a $5 million rebate over 15 years for the renovation of the current Hyundai dealership. This would not only involve the renovation of sales areas, but also new high-tech service bays designed to service the newest cars.

In this agreement, the city would receive the first $500,000 in sales tax each year, with Napleton receiving 65% of the sales tax on top and the city 35%. It would run for 15 years up to the cap of $5 million.

Either way, dealerships would have to stay in business for 15 years or face a penalty repayment of a portion of the rebate to the city. City officials said that despite refunding some of the sales tax, the city will see millions more over the 15 years the dealerships will remain in business.

The only opposing vote for the discounts came from Ald. Sherman Jenkins, at large, who said he thinks the more than $10 million is “just too much money.”

“I thought we could do this for a lot less,” Jenkins said.

Jenkins also mentioned that he’s still suspicious of some of Napleton’s business practices, based on a Federal Trade Commission lawsuit settled earlier this year that claimed some Ed Napleton chain dealers discriminated against black customers with higher and unnecessary costs.

City officials, Irvin and other aldermen pointed out that Napleton Hyundai in Aurora was not named in the lawsuit.

Trevor Dick, deputy director of the mayor’s office of economic development, pointed out that investigators looked specifically at the Aurora dealership “and found no discriminatory practices.”

Aldus. Edward Bugg, 9th Ward, confirmed to city officials that the Aurora dealership “is in no way part of this lawsuit.”

“I don’t know of anyone who has come forward to this body” and claimed to have been discriminated against by this specific dealership, Bugg said.

Some residents have come forward to oppose the refund deal, however, largely because of the lawsuit.

Aurora resident Shannon Buckley said she didn’t know how the city could reach such an agreement following the lawsuit.

The Napleton Group settled the lawsuit in April with the Federal Trade Commission for $10 million. Napleton has dealerships in four states, and the lawsuit included three of its dealerships in Illinois, in Oak Brook, Arlington Heights and Elmhurst.

In a statement released in April, a spokesperson for the Napleton group “vehemently” denied any wrongdoing.

“The Ed Napleton Dealer Group has resolved disputed claims made by the Federal Trade Commission and the Illinois Attorney General’s Office,” Napleton spokesman Tilden Katz said. “We took this decision to avoid disruption of an ongoing dispute with the government. As a result, we have reluctantly determined that it is in our best long-term business interests to resolve these issues.

Katz said at the time that the settlement was the result of a three-year investigation and that there were “no actual findings of intentional wrongdoing.” Napleton has taken steps to implement “additional safeguards to provide full transparency to our customers,” it said in April.

City officials said the Aurora dealership is under different management, though it is under the overall Napleton umbrella.

Jenkins pointed out that the dealer pays a fee to use the Napleton name, that it is the parent company.

The Chicago Tribune contributed to this article.

[email protected]