Village Board to Consider $300K Sales Tax Rebate for Westphal Chevy

Westphal Chevrolet is set to request a $300,000 sales tax rebate from the village of Oswego as it prepares to embark upon an approximately $1.5 million dealership renovation.

Tony Lucenko, the village’s recently hired economic development director, will present the deal to Oswego trustees at Tuesday night’s Committee of the Whole meeting. They could vote on it at the Village Board meeting immediately following.

According to village documents, Westphal approached the village in October, originally requesting $1 million.

“After several meetings with staff, they have reduced the sales tax rebate request to $500,000,” said a memo prepared by Lucenko for trustees. “Staff indicated that we would prepare a request of $300,000 for the Village Board to consider.”

In his memo, Lucenko also said Westphal has had offers from the village of North Aurora and the city of Aurora that would provide the dealership with “substantial financial packages” to relocate.

According to Illinois Department of Revenue records, the village received an average of about $173,000 in sales tax from the dealership in the past three years. Village President Brian LeClercq said Oswego will not pay back any funds to Westphal, nor will it receive less that it usually does. Westphal will be rebated any funds over and above what the village already collects on an annual basis until the $300,000 is paid out or for a maximum of 10 years.

“The village would continue to receive $173,000 and then split any sales tax revenue above that amount. We propose that the split distribution above the base be 25 percent for the village and 75 percent to Westphal Chevrolet. This distribution split would continue until Westphal receives $300,000 or the ten year period has ended, whichever comes first,” Lucenko wrote in his memo.

According to a letter sent to the village by Westphal General Manager Dan Schwebke, General Motors is mandating the dealership complete renovations and has pushed the dealership to move its location.

“Our ultimate desire is to remain in our current location, but GM has been pushing us in another direction,” Schwebke wrote. “From our understanding, 1 percent of overall sales of our vehicles are provided to the village as well as 1.5 percent on the sale of parts. The dealership has been a substantial source of revenue for the village of Oswego for over 20 years.”

LeClercq said in bad economic times, such deals become necessary to keep businesses in town.

“They have been here for a long time and this is a highly competitive environment,” he said. “Times are tough all over and this is just something we need to do to keep them here.”

Additionally, Schwebke wrote, the dealership would like to see the development of an intersection to connect Goodwin Drive through Route 30 to Kendall Point Drive.

“Such an improvement would enable us to develop adjacent property to our west into an additional automobile dealership or a similar retail use,” he said “Overall the improvements that are being planned will generate more sales tax revenue in the long term for the benefit of both our business and the village of Oswego.”

The Committee of the Whole meeting begins at 5:30 p.m. Tuesday in with the regular board meeting to immediately follow.