Valley Honda on Ogden Avenue, near Route 59 and the border of Naperville, is seeking a multimillion-dollar tax sharing agreement with the city of Aurora to expand its car dealership.
Without the financial help, the business would not be able to enlarge its operations for the long term, attorney Richard Williams told the Aurora City Council this week.
He said the dealership is currently “busting at the seams.”
Valley Honda is one of the top 10 Honda dealerships in the country for overall sales, according to President and CEO Casey Brindley. Although it is profitable, the dealership is employee-owned and so has less access to capital funds than privately-owned dealerships do, Williams said.
They are seeking $12.8 million in sales-tax-generated revenue over the next 15 years, representing just under 75% of the total project cost of $17.5 million.
As part of the expansion and modernization project, a third service lane to ease congestion would be added, the square footage of the showroom and administrative offices would be expanded, and infrastructure built to accommodate the sale and servicing of election vehicles, a staff report said.
The dealership would add 28 new jobs in the first year and nearly 100 more by 2030 as a result of the expansion, the report said.
Under the proposed tax sharing agreement, Aurora would receive all of the first $1.05 million in sales tax generated annually by the dealership, Aurora Chief Management Officer Chris Minick said. If the dealership generates additional sales taxes over that amount, they would be shared with the dealership: 35% would go to the city and 65% to the dealership, he said.
The proposed deal would last for 15 years or until Valley Honda collects $12.8 million, Minick said.
This type of economic development incentive is one of the safest Aurora can give because the city is guaranteed its normal amount of sales tax from the dealership plus more, Aurora Chief Operating Officer Alex Alexandrou told the council.
Aurora has been doing these types of deals since the early 1990s, Alexandrou said, and they are common throughout the Chicago area.
In response to a question from Ald. Edward Bugg, Trevor Dick, assistant director of the Mayor’s Office of Economic Development, said he does not believe Naperville gives tax sharing agreements to its dealerships — many of which are within a few miles of Valley Honda. However, Naperville provides other benefits beyond tax incentives to its dealerships, Dick said.
Bugg said that while he would be voting in favor of the tax sharing agreement and praised Valley Honda, he’d prefer the city move toward a model with “less sharing,” similar to Naperville.
Other aldermen — including Patty Smith, Dan Barreiro, Carl Franco and Mike Saville, 6th Ward; and Smith — said they were in favor of the incentive to ensure Aurora keeps its car dealerships.
“We don’t want to do incentives,” Smith said. “I understand that we need to eventually get to that point, but we also need to know that these businesses have other options.”
The item is expected to be voted on at the council’s April 22 meeting.
