Village Approves Incentive Agreement for Packey Webb Ford
Car dealer tax rebate extended to 10 years Downers Grove agrees to return 50% of sales tax to Packey Webb Ford until 2022
September 13, 2012 By Dawn Rhodes, Chicago Tribune reporter
A car dealership will get an extra two years of tax rebates after a vote by members of the Downers Grove Village Council.
The deal with Packey Webb Ford on Ogden Avenue and Finley Road extends a tax break into 2021 and 2022, in an effort to keep the car dealer in town.
The initial deal struck in March 2011 was part of an economic strategy to attract and retain car dealerships, which generate a significant portion of the sales tax revenue the village receives, in a “very competitive environment,” according to village spokesman Doug Kozlowski. The Council voted Sept. 4 to extend it.
Under the deal, the village keeps all sales tax paid on the first $24 million of Packey Webb’s annual retail sales. For everything beyond that base, which was determined by the sales tax history of the property, the village gives half of the sales tax revenue generated back to the dealership. The agreement also requires Packey Webb to stay in Downers Grove until at least 2026.
“That’s the win-win,” said village manager David Fieldman. “The village gets the additional revenue; they get the rebate.”
The village has similar incentive-based arrangements with other dealerships, most notably Zeigler Automotive, which resulted in a Chrysler dealership being located also on Ogden Avenue.
“It’s a way to get improvements made to the facilities and buildings, and to preserve the tax-generating revenue along Ogden,” Kozlowski said.
Under the terms, Packey Webb officials agreed to make a number of improvements, including upgrades to a pedestrian crosswalk on Ogden Avenue, long targeted by officials as a key corridor for economic development in the village.
The crosswalk improvements, which required a permit from the Illinois Department of Transportation, were to be completed by December of 2011 to make Packey Webb eligible for the rebate. But IDOT broadened the scope of the project, requiring Packey Webb to upgrade pedestrian crossings on two legs of the intersection at Ogden Avenue and Finley Road, instead of the one originally proposed by the village. What was to be a $10,000 project is now slated to cost about $65,000. The unexpected changes meant that Packey Webb officials could not secure a permit and complete renovations in time and forfeited the $65,000 rebate, Kozlowski said.
Fieldman said the delay was not due to a lack of effort on the part of Packey Webb, so officials adjusted the agreement so the dealership had the opportunity to complete the work to the street.
The sales tax rebate payments are expected to cover the expense of the expanded project and to compensate for the lost rebate in 2011. Fieldman said renovations to the intersection are expected to be completed by the end of 2012.