Trustees Split on Westphal Tax Rebate

Oswego village trustees are split over a $300,000

Trustees were slated to vote on the matter at Tuesday night’s Village Board meeting, but the vote was delayed to at least the board’s Jan. 10 meeting to allow for input. Trustee opinions ranged from that of the deal being part of the village’s obligation to keep businesses in town to charges of not all businesses being treated the same.

Trustee Jeff Lawson said he doesn’t at all favor the deal that would help Westphal with a planned $1.5 million dealership renovation that’s been mandated by General Motors. Economic Development Director Tony Lucenko told trustees in a memo that Westphal has received offers with incentives from both Aurora and North Aurora to relocate, which GM has urged the dealership to do.

“What I’m against is crony capitalism where some benefit and others don’t,” Lawson said. “… I think the fairest way to treat all businesses is equally. … The free market picks the winners and losers.”

Lawson went on to list several business in town that have closed in recent years that never received such assistance. 

Interim Village Manager Dwight Baird said staff is recommending the village board approve the agreement that would pay the village the same amount of sales tax dollars its been receiving the past three years (about $173,000 annually) plus 25 percent of extra tax dollars on top of that. The dealership would keep the remaining 75 percent of what is generated annually until the $300,000 is captured. The proposal gives the dealership 10 years to make up the amount. Baird also made it clear to trustees that at no time has Westphal threatened to leave the village.

The larger issue appears to be what trustees consider to be good ways to spur and keep economic development in town. Trustee Judy Sollinger said it’s the village’s obligation to residents to keep businesses that bring in large amounts of sales tax dollars to the village.

Trustee Tony Giles disagreed.

“Where do we draw the line?” he asked.

For his part, Trustee Scott Volpe said the proposal isn’t the same type of incentive that’s been brought to the village board in the past.

“Taxpayer dollars are not ever at risk, this is not a loan or advance,” Volpe wrote in a email Tuesday. “I appreciated that the proposal was drafted to benefit the residents first, and that the Westphal organization did not threaten to leave or make unreasonable demands.  I thought it showed respect and class when they are admittedly receiving offers from other communities.”

Baird also said that sales figures from Westphal could increase 25 percent with an remodeled and expanded dealership.