Joliet: Don't Poach Our City's Auto Dealerships

JOLIET, IL - As this year winds down, Joliet city officials remain busy trying to finalize a deal that will have long-term consequences on the city's economic development. Last summer, Joliet announced that it had reached a tentative agreement to keep Hawk from bolting Joliet in favor of a neighboring community, such as Plainfield. Hawk plans to move its existing Mazda and Volkswagen dealerships from West Jefferson Street out to Route 59 and Caton Farm Road. This is the parcel of land at the Joliet Park District's Wedgewood Golf Course.

"Hawk seeks to construct a new dealership and service center for each of the named vehicle brands," a memo authored by Joliet's Economic Development Director Steve Jones reads.

Here are eight things we know about the pending proposal that Joliet's elected officials will be scrutinizing in the near future, beginning with Thursday night's Joliet Economic Development Committee meeting that begins around 5 p.m.

1. Hawk Auto would retain 35 full-time and part-time jobs in Joliet once it builds its new dealerships off Route 59.

2. Hawk Auto promised to create another 15 full-time and part-time jobs once it relocates to the Joliet Park District land.

3. Hawk Auto projects that its improvements to the current parcel of golf course land will have a value of $9 million to Joliet.

4. Hawk Auto believes it will still have enough land at the Route 59 site to build a third dealership in the future. (At first, Hawk Auto envisioned it would move its Hawk Subaru dealership out to Route 59 and Caton Farm Road.)

5. Hawk Auto wants to retain 70 percent of the generated tax revenue from sales and services up to its fifth anniversary of its agreement with Joliet.

6. Hawk Auto wants to retain 60 percent of generated tax revenue from its fifth through tenth anniversary.

7. Hawk Auto wants to keep 50 percent of the tax revenue between anniversaries ten through fifteen.

8. Hawk Auto wants a cap on any building-related fees at no more than $10,000.

Here's some highlights from the city's take.

The information is quotes was by Steve Jones:

Sales tax revenue should drop in the range of $100,000 to $150,000 per year.

"Ownership feels the dealership will be more productive in the proposed new location resulting in additional sales tax generation ... I can indicate that the amount of sales tax the City will receive from these two dealerships will decrease as a result of the greater level of sales tax being retained by ownership."

Should Joliet let its neighboring communities attempt to poach its auto dealerships?

"Since Joliet has a number of dealerships operating in the community, we are a target of poaching and are required to take a defensive posture to insure dealerships remain. Thus, our approach to auto dealership incentives need to strongly consider the incentive market being created by our neighbors. While this is a distasteful and irrational approach to offering economic incentives, it is the reality we face ... The request from Hawk is very similar to the recent agreement terms that were approved with Thomas Toyota in Romeoville."

Main image via Google Maps, secondary image via Joliet Patch