The high-end, British auto manufacturer Aston Martin is set to open a new dealership in Downers Grove, pending the village's approval of a sales tax rebate agreement.
Michael Cassa, president of the Downers Grove Economic Development Corporation, announced during Tuesday night's village council meeting that Napleton's Aston Martin of Chicago will take over the former True SAAB property at 217 Ogden Ave.
The dealership will be Aston Martin's second in the Chicago area; the other, Lake Forest Sportscars, is located in Lake Bluff.
During the council meeting, Cassa presented a resolution to enter into a sales tax rebate agreement with the dealership, which is expected to generate an additional $185,000 in sales tax revenue for the village each year. The rebate, he said, is part of what attracted Napleton Auto Group to Downers Grove.
"Changes in the automotive industry have resulted in fewer dealerships and more competition among communities for those dealerships," Cassa said. "The village and the Downers Grove Economic Development Corporation have worked together to attract and retain auto dealers. This strategy has included entering into sales tax rebate agreements to incent dealerships to either locate a new facility or expand an existing facility in the village."
Similar sales tax rebate agreements have been established with Ziegler Dodge, Chrysler, Jeep and Ram; Pugi Volkswagen, Hyundai and Mazda; Packey Webb Ford and Bentley of Downers Grove, Cassa said.
Under the agreement with Napleton's Aston Martin, the Village of Downers Grove will receive all of the sales tax revenue generated on the first $3 million each year. The dealership will keep 50 percent of the sales tax on newly generated revenue—anything over $3 million.
The resolution states the village will make rebate payments for a period of 10 years, beginning on Jan. 1, 2013.
Downers Grove Mayor Martin Tully said the agreement is designed to grow the village's tax base by rebating revenue above and beyond what the facility has generated over the past year.
"It needs to be understood that the sales tax base is not something that just sort of exists, and if you just leave it alone it will remain there. It needs to be tended to, and it needs to be grown," Tully said. "It should be apparent by now that there's stiff competition out there among municipalities to draw businesses that will help grow their tax base so they don't have to grow their tax rate ... We need to be vigilant and aggressive in pursuing these opportunities."
The resolution stipulates that Aston Martin will operate the dealership for at least 15 years. It must also make improvements to the existing property, including its showroom interior and exterior signage. All work must be completed by Dec. 31, 2013.
According to the resolution, the village will hold back 25 percent of the annual rebate payments. If Aston Martin fails to operate the dealership under the terms of the agreement, the held-back portion of the rebate payment will be forfeited.
If the dealership closes, it must reimburse the village for all or a portion of the rebate payments made, according to a schedule included in the agreement.
The village council is expected to approve the agreement during its Nov. 6 board meeting.
Napleton Auto Group was started in 1931, when Edward W. Napleton opened a small DeSoto franchise on the south side of Chicago. Today, the family owns and operates 60 franchises in four states.
Napleton's Aston Martin of Chicago joins a growing community of auto dealers in Downers Grove—one that generated $1.6 million in incremental sales tax revenue in 2011, $800,000 of which went to the village, officials said.
Village Manager David Fieldman said the various rebate agreements have had big payoffs for Downers Grove.
"The strategy we've put in place as a team—the village and the Economic Development Corporation—to be destination for car dealerships has worked very well for us, and you can see it in our sales tax performance," Fieldman said.
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