A Napleton car dealership is about to begin construction of a new showroom and service center on Cicero Avenue in Oak Lawn with the help of sales tax rebates from the village.
More than two years after Napleton bought the former Shirey Cadillac dealership at 10125 S. Cicero, the company is ready to replace the old facility, parts of which date from the mid-1960s.
To induce Napleton, officially known as Fran Napleton Lincoln Inc., to make the improvements, Oak Lawn has agreed to rebate up to $225,000 of the sales tax the dealership generates each year over a 12-year period.
“Car dealerships are the lifeblood of the village,” Mayor Terry Vorderer said. “The sales tax on their car sales go a long way to support village expenses.”
The agreement states the improvements “are expected to increase the value of the property and increase sales from the property, thereby increasing sales tax revenues for the village.”
The village has to compete with other municipalities that offer similar tax rebates or economic incentives to keep their car dealerships and attract new ones, Vorderer said.
Julie Ochoa, service director at Napleton Cadillac in Oak Lawn, said it will take about a year for the entire project. The existing showroom, body shop and some service bays will remain open while the new dealership is being built on the south side of the 2.8-acre property. Once the new facility is finished and open, the old dealership will be demolished and converted to parking for customers and new vehicles, Ochoa said.
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The tax sharing arrangement starts on the Jan. 1 after the village issues a certificate of occupancy for the new dealership.
Oak Lawn will give the dealership the first $100,000 in municipal sales tax paid by car buyers at Napleton Cadillac each calendar year.
The next $100,000 in sales tax paid will be kept by the village.
When Napleton Cadillac generates from $200,001 to $300,000 in sales tax in a year, the dealership and the village will split that $100,000 increment 50-50.
Oak Lawn will rebate 75% of sales tax above $300,000 and up to $400,000 annually to Napleton and retain 25%.
The village will keep all of the sales tax above $400,000 generated in any one calendar year.
Village Manager Tom Phelan said the terms allow the village “to keep more money in our pocket.”
For example, if Oak Lawn’s share of the sales taxes paid on all the vehicles sold in a single year during the agreement total $500,000, the village would get $275,000 and rebate $225,000 to Napleton for that year.
If the village does not issue a final certificate of occupancy for the new facility by Dec. 31, 2024, the agreement can be terminated. If the dealership is ready to open by that date, Oak Lawn will waive its building permit fees.
Kimberly Fornek is a freelance reporter for the Daily Southtown.