HomeMy WebLinkAbout98-306 Resolution No. 98-306
RESOLUTION
AUTHORIZING EXECUTION OF A PARTICIPATION AGREEMENT IN
CITY OF ELGIN COOK COUNTY
AUTOMOBILE DEALERSHIP INCENTIVE PROGRAM
(Elgin Toyota)
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,
ILLINOIS, that Kevin Kelly, Mayor, and Dolonna Mecum, City
Clerk, be and are hereby authorized and directed to execute a
Participation Agreement in City of Elgin Cook County Automobile
Dealership Incentive Program on behalf of the City of Elgin
with Robert Loquercio Enterprises, d/b/a Elgin Toyota to permit
participation in the sales tax sharing portion of the program,
a copy of which is attached hereto and made a part hereof by
reference.
s/ Kevin Kelly
Kevin Kelly, Mayor
Presented: December 16 , 1998
Adopted: December 16 , 1998
Omnibus Vote: Yeas 6 Nays 0
Attest:
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
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, City of Elgin Agenda Item No.
u
November 23 , 1998
TO: Mayor and Members of the City Council
FROM: Joyce A. Parker, City Manager
SUBJECT: Cook County Automobile Dealership Incentive Program
Application - Elgin Toyota
PURPOSE
The purpose of this memorandum is to provide information to the
Mayor and members of the City Council to consider an agreement
with Elgin Toyota for participation in the Cook County Automobile
Dealership Incentive Program.
BACKGROUND
On August 28, 1996 , the City Council passed an ordinance estab-
lishing an incentive program for automobile dealerships located
in the Cook County portion of Elgin. Application forms and
program information were mailed to all dealerships in October
1996 .
The Cook County Automobile Dealership Incentive Program consists
of three facets :
1) Sales Tax Sharing Agreement: Any Elgin automobile dealer-
ship whose facility is located in Cook County may take
advantage of the sales tax sharing agreement by making a
capital improvement to their facility of more than 200
percent of the average sales taxes paid over the past three
years . During the next five years, the eligible dealership
will receive 50 percent of the increased local sales tax
revenue generated over the business ' s three year average
sales tax base .
2) Investment Grant Program: Automobile dealers who make
capital investments of at least $50, 000 and up to $200, 000
may be eligible for a 15 percent investment grant from the
City. Upon approval, a participating dealer has up to two
years to complete capital improvements . The City will pay
half of the grant amount in the first month that improvement
construction begins, with the balance being paid in thirteen
months or when construction is completed, which ever comes
first . The required improvements must be completed within
the two-year period or all grant money previously
distributed will be forfeited. Dealers are eligible for the
Investment Grant Program only once every five years .
Cook County Auto Dealership Incentive
November 23 , 1998
Page2
3) The Business Retention Rebate: To be eligible for the 35
percent business retention rebate, a dealership must agree
in writing to continue their retail operations in Elgin for
a period of at least five years . The dealership is also
required to supply the City with Illinois Department of
Revenue documentation of the revenues and sales taxes paid
for the years 1994-1997 . All sales tax information received
from the Illinois Department of Revenue is required to
remain confidential .
Elgin Toyota was originally approved for the Business Retention
Rebate facet (3596 sales tax rebate) of the program in July 1997 .
Recently they have been negotiating with the current owner to
purchase the property. They have approached the City requesting
that they receive approval to move from the Business Retention
Rebate portion of the program to the Sales Tax Sharing facet (500
sales tax rebate) of the program. Elgin Toyota has indicated
that they will be making a $1 . 3 million addition/renovation to
the facility after they purchase the property (scheduled for late
December, early January) . Elgin Toyota has requested that they
be given up to 24 months to break ground on the addition/
renovation given their capital position relative to the
acquisition. They are, however, willing to agree that should the
addition/renovation not break ground within 24 months, they would
be removed from the Sales Tax Sharing facet and remain in the
Business Retention alternative .
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
None .
FINANCIAL IMPACT
Elgin Toyota ' s rebate from the first year of the program will
total approximately $36 , 000 . Should their request be approved,
Elgin Toyota could receive 500 of the sales tax base which would
equal approximately $51, 500 each year for the next five years
(based on the last twelve months of sales) . Adequate monies are
available in the Elgin Riverboat Fund, account number
275-0000-791-80 . 27, Economic Development Incentives, to fund this
program.
LEGAL IMPACT
NO610/ An agreement with the dealership will need to be prepared.
Cook County Auto Dealership Incentive
November 23 , 1998
Page3
ALTERNATIVES
None .
RECOMMENDATION
It is recommended that the Mayor and members of the City Council
authorize staff to enter into a participation agreement with
Elgin Toyota for the Sales Tax Sharing facet of the Cook County
Automobile Dealership Incentive Program.
Respectfully submitted,
Joyce A. Parker
City Manager
JRN/ai
Attachment
•
•
i'e°FF<C
.. ,ti Agenda Item No.
City of Elgin
V
ED FED''
June 16 , 1997
TO: Mayor and Members of the City Council
FROM: Robert O. Malm, Interim City Manager
SUBJECT: Cook County Automobile Dealership Incentive Program
Application - Elgin Toyota
PURPOSE
The purpose of this memorandum is to provide information to the
Mayor and members of the City Council to enter into an agreement
with Elgin Toyota for participation in the Cook County Automobile
Dealership Incentive Program.
BACKGROUND
• On August 28 , 1996 , the City Council passed an ordinance estab-
lishing an incentive program for automobile dealerships located
in the Cook County portion of Elgin. Application forms and
program information were mailed to all dealerships in October,
1996 .
The Cook County Automobile Dealership Incentive Program consists
of three facets :
1) Sales Tax Sharing Agreement: Any Elgin automobile dealer-
ship whose facility is located in Cook County may take
advantage of the sales tax sharing agreement by making a
capital improvement to their facility of more than 200
percent of the average sales base ( 1993-1995) . During the
next five years, the eligible dealership will receive 50
percent of the increased local sales tax revenue generated
over the business ' s sales tax base.
2 ) Investment Grant Program: Automobile dealers who make
capital investments of at least $50,000 and up to $200, 000
may be eligible for a 15 percent investment grant from the
City. Upon approval, a participating dealer has up to two
years to complete capital improvements . The City will pay
half of the grant amount in the first month that improvement
construction begins, with the balance being paid in thirteen
months or when construction is completed, which ever comes
first . The required improvements must be completed within
previously_ all grant moneyp Y
or
the two-year period
distribut-
ed will be forfeited. Dealers are eligible for the Invest-
ment Grant Program only once every five years .
' Cdok County Automobile Dealership Program Application
June 16 , 1997
Page 2
3 ) The Business Retention Rebate: To be eligible for the 35
percent business retention rebate, a dealership must agree
in writing to continue their retail operations in Elgin for
a period of at least five years . The dealership is also
required to supply the City with Illinois Department of
Revenue documentation of the revenues and sales taxes paid
for the years 1994-1997 . All sales tax information received
from the Illinois Department of Revenue is required to
remain confidential .
Elgin Toyota has submitted an application and all required
documentation for participation in the business retention rebate
facet of the program. The Illinois Department of Revenue has
verified the sales tax receipts for the dealership during the
previous three-year period ( 1994-1997 ) . Upon execution of a
participation agreement, the dealership will be eligible to
receive a 35 percent rebate of the increase in sales tax receipts
(June, 1997 through May, 1998) over the previous three-year
average .
Example:
Average 3-Year Sales Tax Receipts ( 1994-1997 ) $250,000
: Sales Tax Receipts ( 6/97 - 5/98) Assuming 20% Increase $300, 000
Annual Rebate to Dealership ( 35% of $50, 000) $ 17 ,500
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
None.
FINANCIAL IMPACT
The exact rebate amount will not be known until completion of the
twelve month period following approval of the participation
agreement (June, 1997 through May, 1998) . Adequate monies are
available in the Elgin Riverboat Fund, account number
275-0000-791 . 80-27 - Economic Development Incentives - to fund
this program.
LEGAL IMPACT
None.
ALTERNATIVES
None .
It w
i,
Cook County Automobile Dealership Program Application
June 16 , 1997
Page 3
RECOMMENDATION
It is recommended that the Mayor and members of the City Council
authorize staff to enter into a participation agreement with
Elgin Toyota for the business retention rebate facet of the Cook
County Automobile Dealership Incentive Program.
Respectfully submitted,
James R. Nowicki
Finance Director
Robert 0. Malm
Interim City Manager
JRN/daw
Attachment