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City Council approves $1.5M for Roesch dealership

Published: Wednesday, July 23, 2014 2:11 p.m. CST
Caption
First Ward Alderman Diane Gutenkauf (right) on Monday motioned to amend a sales tax agreement to apply only if Larry Roesch car dealership keeps its commercial vehicle sales and services at 150 W. Grand Ave. The motioned failed with a 9-to-3 vote. (Mari Grigaliunas - mgrigaliunas@shawmedia.com)

ELMHURST – The Elmhurst City Council approved Monday an ordinance granting a $1.5 million sales tax sharing agreement to a local car dealership.

Larry Roesch Chrysler-Jeep-Dodge LLC requested a sales tax incentive to renovate and upgrade a property at 150 W. Grand Ave. – part of TIF IV – for commercial truck sales and service.

The agreement will provide the dealership with $1.5 million over a 15-year period so long as the commercial truck sales and service remain in Elmhurst, but not necessarily at the 150 W. Grand Ave. location. If the commercial truck sales were to leave Elmhurst before the 15 years is up, a "claw back" requires Roesch to pay back the money it earned so far through the agreement.

"If, for some reason, those vehicles are sold at the original Roesch location or perhaps, a new location in Elmhurst, everything would be fine for the purposes of this agreement," said Fourth Ward alderman Kevin York, who is also chairman of the Finance, Council Affairs and Administrative Services Committee that recommended the agreement.

He explained that the agreement is linked to the sales tax identification number connected to the sales and service of commercial vehicles, regardless of where in town they are sold.

Third Ward Alderman Michael Bram opposed the agreement when the committee brought it to the council in a report about two months ago.

He continued to disagree with the ordinance Monday, while pointing out he was not opposed to the dollar amount or duration of the agreement since city policy recommends 10 years with consideration for a 15-year agreement.

"We are investing in them rehabbing a facility that if they decide to move their sales away from this location [but stay within Elmhurst], we possibly could have a new tenant saying, 'Well, we need monies to rehab this facility for a totally different purpose,'" Bram said.

Bram added that he would hate to lose the dealership to another community, but he disagreed with some of the terms of the agreement.

York explained that because Roesch owns other dealership properties in Elmhurst already, the agreement allows for the commercial truck sales to move between the Roesch properties, existing or new.

"You can't look into the crystal ball and say, 'Well if somebody does that there's automatically going to be a request for some more additional money,'" said York, adding that if a new tenant were to lease the 150 W. Grand Ave. property and request a sales tax agreement, the city would would then evaluate that case.

First Ward Alderman Diane Gutenkauf motioned to amend the ordinance to restrict the agreement to the 150 W. Grand Ave. location.

"If we're asking the taxpayers of Elmhurst to take the sales tax money that they're paying to this dealership – that we could be using for other purposes within the city – and giving it to the dealer so they can remodel this existing location, then why wouldn't we want that money to stay at that spot?" Gutenkauf asked.

City Manager Jim Grabowski said the city had included a similar provision in a sales tax agreement with another dealership, Napleton.

The amendment failed with a 9-to-3 vote. Two aldermen were absent.

Gutenkauf, Bram and First Ward alderman Marti Deuter voted in favor of the amendment. Deuter, a member of the finance committee, also supported the amendment because she said if new circumstances arose, the city could modify the agreement then.

The agreement was approved without the amendment with a 10-to-2 vote. Bram and Gutenkauf voted against it.

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