JOLIET – Hawk Auto wants up to
70 percent in sales tax rebates to keep its Mazda and Volkswagen dealerships in Joliet, according to a city staff memo on the proposal.
The Joliet City Council Economic Development Committee will consider the sales tax rebate during a meeting at
5 p.m. Thursday.
Hawk wants to move its Mazda and Volkswagen franchises, now on Jefferson Street, to a Route 59 site where it previously had planned to move its Subaru dealership, according to the memo from Economic Development Director Steve Jones.
The Subaru dealership apparently now will stay on Jefferson Street, as Hawk eyes the site for its Mazda and Volkswagen dealerships, which also are on Jefferson Street.
Jones’ memo states that Hawk claims to be talking with other communities about sales tax incentives to relocate.
“As we well know, neighboring communities are willing to offer very lucrative incentives to poach dealerships due to the fact new sales tax opportunities would be created for their community,” Jones’ memo states.
Jones describes the Hawk request as “very similar” to what Romeoville gave Thomas Toyota to move out of Joliet and locate there.
Hawk wants 70 percent of sales tax rebated in the first five years, 60 percent rebated in years six through 10, and
50 percent rebated in the final five years of the 15-year agreement.
Romeoville provided Thomas Toyota the same rebates for the first 15 years. But the Romeoville 30-year agreement also rebates 50 percent of the taxes for another 15 years.
The Hawk agreement also limits building fees related to new construction at $10,000.
Jones recommends going forward with the agreement because of “the incentive market being created by our neighbors.”
“While this is a distasteful and irrational approach to offering economic incentives, it is a reality we face,” he said in the memo. “Dealerships must make economic business decisions.”
Hawk Auto President John Crane could not be reached for comment.
Jones said the city would see sales tax from the dealer decline by between $100,000 and $150,000 a year.
Mayor Bob O’Dekirk would not comment Thursday on the rebate proposal.
“I’ll let the Economic Development Committee comment first,” O’Dekirk said. “Let the committee do their work.”
At one time, Hawk Auto was planning to move its Subaru dealership to Plainfield. But the car dealer eventually worked out a deal to buy 7.6 acres of Joliet Park District land at the corner of Route 59 and Caton Farm Road for that dealership. The land makes up a section of the Wedgewood Golf Course that the Park District had been trying to sell for years.