Submitted By
Tammie Grossman, Director of Development Customer Services
Reviewed By
A.M. Zayyad
Agenda Item Title
Title
A Motion to Concur with the Oak Park Economic Development Corporation’s (OPEDC) Recommendation to Enter Into a Sales Tax Rebate Sharing Agreement with RRV Motor Cars II LLC (RRV), for the Purpose of Attracting a Newly Constructed Polestar Dealership at 1047 Garfield Street and Direct Staff to Prepare the Necessary Agreement
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Overview
Overview
The OPEDC recommends that the Village enter into a Sales Tax Sharing Agreement with RRV Motor Cars II LLC (RRV), to attract a newly constructed Polestar dealership at 1047 Garfield Street and is recommend a 60% sales tax rebate to RRV on Polestar vehicle sales over the next 6 years up to a maximum of $900,000.
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Recommendation
Recommendation
Approve the Motion
Fiscal Impact
The OPEDC expects that the new Polestar dealership may generate as much as $265,000 in total sales taxes by 2025. Lower figures should be expected in the initial years of the agreement; the OPEDC is forecasting approximately $95,000 in 2023 and $190,000 in 2024 as Polestar gains traction in the market. The OPEDC estimates that the improvement on the commercial lot will generate over $50,000 annually in new property taxes for the Oak Park taxing bodies.
Background
RRV Motor Cars II LLC (RRV) is a legal entity controlled by Mr. Fisher that assumed ownership and operation of the Autobarn Volvo of Oak Park in 2015. At the time, the Village of Oak Park approved a Sales Tax Sharing Agreement between the Village and RRV. This agreement provided a rebate of 50% of sales taxes collected over 6 years (expiring in 2021), with the rebate beginning once sales reached $50 million total during that time period. The Village of Oak Park reports that Volvo was rebated approximately $560,000 total during the agreement term.
Polestar and Volvo will be distinct brands with separate buildings, thereby requiring the evaluation of this incentive on its own merits. Nonetheless, OPEDC notes and acknowledges that this is the second incentive request from Mr. Fisher in just over 7 years. Mr. Fisher has agreed to commit in writing if desired by the Board - that Mr. Fisher and his affiliated entities not solicit additional incentives from the Village for a period of 10 years after the execution of this proposed agreement if adopted.
Additionally, Mr. Fisher has agreed to install solar panels and an electric vehicle charging station at a location to be mutually agreed to with the Village.
Alternatives
Request additional information.
Previous Board Action
On March 16, 2015, the Village entered into a Redevelopment Agreement with RRV Motorcars II.
On August 15, 2015, the Village Board approved a Sales Tax Sharing Agreement between the Village of Oak Park and RRV Motorcars II.
Citizen Advisory Commission Action
N/A
Anticipated Future Actions/Commitments
If the Motion is approved, Village staff will negotiate the terms of the Sales Tax Incentive Agreement for review and approval on a future Board Agenda.
Intergovernmental Cooperation Opportunities
N/A