Car Dealership Sales Tax Rebate Of Up To $2.1 Million Approved

HIGHLAND PARK, IL — The city will provide up to $2.1 million in sales tax rebates to subsidize a commercial real estate developer's purchase and renovation of the site of a car dealership on Skokie Valley Road.

Councilmembers unanimously approved a 10-year economic incentive agreement Monday with a corporate entity controlled by the Schaumburg-based firm Storebuild, which bought the property at 250 Skokie Valley Road last month, according to a memo from city staff.

According to the agreement, the company aims to continue leasing it to CarLotz, a consignment dealership that works with both businesses and individuals. It opened up shop at the site of the former Fields Auto Group dealership in late June.

If the dealership stops operating at the site during the next decade, the developer must refund the city all the money received before the closure. But if the dealership goes out of business in the first five years of the deal, Storebuild can substitute a "like business generating similar sales tax revenue" without refunding any of its rebates.

Storebuild "intends to make significant improvements to the [property] at a substantial cost," according to the economic incentive agreement.

"The Improvements made by the Owner to the Property are expected to increase the Dealership's sales, thereby increasing sales tax revenues for the City," it said. Those improvements include roofing, plumbing, HVAC, electrical and painting, according to city staff.

The terms of the agreement call for the city to reimburse the landlord for half of the total cost of buying the land and improving the property, or $2,104,021 — whichever is smaller.

City staff estimated the developer's total cost for the project would be about $4.2 million, with Storebuild set to spend about $4 million on the land and $208,000 on improvements.

Rebates would begin once city officials certify that improvement expenditures have been paid. After that, Storebuild would be set to receive 40 percent of the city's 1 percent sales tax revenue via the annual rebate.

City staff said the developer provided projections that Carlotz will generate an average of about $23.2 million in revenue annually for the next 10 years.

Should those projections prove accurate, the city would rebate nearly $939,000 in sales tax revenue to the developer during the 10-year term of the deal.

Storebuild CEO Ryan Murphy did not immediately respond to a request for comment about the agreement Wednesday.

According to Lake County records, the 2.4-acre property was formerly owned by Chrysler Realty and Fields Volvo and most recently owned by Linda Hurlbut.

An $800,000 buildout for a Fiat dealership was permitted in 2011 and a two-phase buildout permitted in 2015 and 2016 cost another $500,000.