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City Council set to approve 60-percent sales tax rebate for Kia dealer

Published: Wednesday, Nov. 20, 2013 12:38 p.m. CDT

ELMHURST – The Elmhurst City Council approved a Finance, Council Affairs and Administrative Services (FCAAS) Committee report recommending a 60-percent sales tax rebate for Ed Napelton's Kia dealership despite some disagreement among aldermen.

The Napelton Group also owns an Acura dealership on the same corner at Lake Street and Grand Avenue.

The Kia franchise requested a sales tax rebate incentive from the city for a manufacturer-required renovation project estimated to cost more than $1.5 million.

The FCAAS Committee recommended the city provide the dealership with a 60-percent sales tax rebate of annual growth above Napelton Group's 2012 sales for 70 percent of the total sales.

"Our concern – at least a little bit – was that they would simply take the Kia brand and relocate just that brand," said FCAAS Chairman Kevin York.

Because all sales tax for the Acura and Kia dealerships along with used cars and parts are filed under one sales tax identification, the FCAAS Committee determined 70 percent of total sales tax would exclude that revenue raised from the Acura dealership.

"I'm not saying we shouldn't give some incentive," said Fifth Ward Alderman Scott Levin. "I just think what we're offering is a little bit richer than what it needs to be in this circumstance."

The 10-year agreement would pay Napelton Group annually based on each year's calculated sales tax rebate for 10 years up to $750,000. During those 10 years, Napelton could not cease the operation of either the Kia or Acura dealerships in Elmhurst except in the event of manufacturer bankruptcy.

Third Ward Alderman Michael Bram motioned for the council to amend the committee's report to offer a 50-percent sales tax rebate instead of 60 percent, giving the city and dealership an equal share.

The council voted down the amendment, 8 to 4, with two aldermen missing.

Bram then motioned to amend the report to offer a maximum of $600,000 like the franchise received in Calumet City for improvements, but that amendment also failed.

"I think it's great that the city is in a financial position to assist this business with this remodeling, but I'm incredibly mindful of who lives here and how we fund the city and how we fund all of the things that we do," said First Ward Alderman Diane Gutenkauf.

The council approved the report with three aldermen opposed. The council will take a final vote on the sales tax incentive at the next city council meeting Dec. 2.

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