Crystal Lake OKs tax incentives for dealership
CRYSTAL LAKE – The City Council has inked a sales-tax incentive deal worth up to $1 million to help a car dealership branch out to a vacant facility in the city’s Route 14 corridor.
The agreement with Anderson Motor Co. to expand its BMW, Mazda and Volkswagen dealership was approved at a meeting Tuesday.
Anderson Motors has purchased the vacant Extreme Ford dealership at 5213 Route 14, where it will sell Volkswagens only. The dealership will raze the building and put up a new 34,140-square-foot sales and service facility. Anderson plans to spend $6.4 million – $2.4 million to buy the property and $4 million to renovate it.
Under the city’s Enhanced Sales Tax Incentive Program, Anderson will recoup half of what is generated from both the new site and its existing dealership at 360 N. Route 31 for 10 years or until it recoups $1 million. Assuming a 3 percent to 5 percent annual increase in sales, city officials said $1 million can be reached in nine years.
In 2011, Anderson Motors reported $20 million in sales that generated $207,000 in sales-tax revenue, city officials said. Anderson’s general manager called that figure “conservative,” but declined to give hard numbers.
The City Council in 2010, and again earlier this year, approved nearly identical agreements with M’Lady Nissan and Brilliance Honda.
“Car dealers are a very important economic engine, especially with the city’s general fund being supported [solely] by retail sales tax,” Mayor Aaron Shepley said. “They’re not the only engine but they’re certainly critical.”
Anderson Motors’ general manager Paul Vance said the expansion could employ 60 people, and the dealership hopes to be fully operational by fall.
If the dealership closes, it would have to refund the sales-tax incentive money. The agreement also prohibits Anderson Motors from opening a competing dealership within 10 miles.