Aurora mulls sales tax deal with auto dealer – Chicago Tribune

Aurora City Council members study a proposed sales tax rebate deal to help a local car dealership survive and grow.

City staff negotiated a plan with Napleton Valley Hyundai, 4333 Ogden Ave., that would see the dealership retrofit its current operation and create a separate dealership across the street for Genesis, the line of cars from Hyundai luxury.

Trevor Dick, deputy director of the mayor’s economic development office, told aldermen on the finance committee that the deal “is exciting news” for a city that has lost many dealerships over the past 20 years, not to mention one. winner only one.

“We have a brand new dealership,” said city general manager Alex Alexandrou. “It gives us access to millions of dollars in sales tax.”

The deal would actually involve both the current Hyundai dealership and the new Genesis dealership. This would involve a global sales tax refund of up to $5.2 million by the city to Napleton over the next 15 years.

In exchange, the dealer would agree to stay in Aurora and renovate their current dealership, and create the new Genesis dealership. Currently, Napleton is selling Genesis out of the Hyundai dealership, but the South Korea-based automaker is demanding that the Genesis dealerships separate from the rest of the Hyundai operation.

Additionally, city officials said the dealership won’t receive any money unless it makes more sales, which will result in more sales taxes in the city.

Christopher Minick, the city’s chief financial officer, said that overall, if the deal goes ahead, the city would realize $15.4 million in sales tax and $10 million in sales tax would accrue to Napleton at the course of 15 years.

“The performance risk is on Napleton,” Minick said. “They have to play to make money. If there was another COVID there would be a lost opportunity cost, but we still have the dealers.

Minick pointed out that under the deal, the city receives the first $500,000 in sales tax before Napleton even begins getting a refund.

But aldermen on the finance committee on Thursday were reluctant to recommend the deal without more information and more numbers. They agreed to hold the review of the agreement at the finance committee for two weeks.

Aldus. Edward Bugg, 9th Ward, said he wanted to see what kind of deal the city had with Valley Honda, the city’s only other dealership that’s next to Napleton, and how it compares to Napleton’s proposal. .

He also said he wanted to see what Naperville is doing, if they do any incentives for the row of car dealerships there.

Minick said that during his time as chief financial officer in St. Charles, the city “incentivized” the many dealerships along Route 64.

Aldus. Sherman Jenkins, as a whole, was particularly concerned that the $5.2 million incentive offered by the city matched the $5.2 million the dealership planned to invest in its Hyundai plant.

“They’re spending $5.2 million and we’re spending $5.2 million?” he said. “That’s where I’m struggling. We have never done 100% for anyone.

Alexandrou pointed out that Aurora once had its own row of dealerships along East New York Street, and “they’re all gone.”

“We have to kick this off…so now we can start creating our own little zone,” he said. “Yes, we pay 100%, but we have access to a whole bunch of sales tax.”

Jenkins also asked what would happen when the next luxury dealership comes to town and asks for a deal.

“What would we tell them? he said.

“I would say every deal is different,” Dick said. “It wouldn’t be the same.”

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