Evanston’s Economic Development Committee Wednesday night rejected a proposal from the owner of City Volkswagen to rebate to the dealership $2.5 million in sales tax revenue over the next 10 years.
Owner Shawn Kohli told the committee he needed the tax break to cover the cost of a scheduled $1.5 million renovation of the dealership required by Volkswagen and to reduce the disparity between property tax levels in Evanston and in other communities where he operates dealerships.
Ald. Melissa Wynne, whose 3rd Ward includes the dealership at 1033 Chicago Ave., said automaker demands that dealers renovate their properties periodically are standard in the industry and “that’s part of your cost of being a dealer.”
Wynne noted that the city had given another dealer, Richard Fisher, tax sharing agreements twice in the past, in 2004 and 2014, but said those were tied to expansions of the dealership that led to substantial increases in sales.
Kholi said he “loves Evanston and loves the store,” and that he started as an employee there when he was 18 years old and hopes to continue to operate it.
Other council members also criticized the proposal. Ald. Devon Reid (8th) said that given how little the city had to spend on affordable housing and other really tight budget constraints he didn’t see subsidizing Volkswagen as a good use of city funds.
Kholi said Volkswagen would like him to move the dealership “a little further south” and that he has been considering sites on McCormick Boulevard in Skokie and on Western Avenue in Chicago.
Several committee members indicated that they might be open to some more modest level of assistance to the dealership. Ald. Jonathan Nieuwsma (4th) said he would invite Kholi to come back “when he’s ready with a more reasonable proposal.”
A more reasonable proposal probably would be a major increase in the vacancy/unoccupancy tax.
Evanston shouldn’t be in the used car business–or, in fact, any business. If we go that route, any business can demand –rightly– any tax break.
As others have suggested, the optimal location for a land-intensive car dealership is not on high value property like on Chicago Avenue. Studies have shown that tax breaks like the one being proposed and TIFs have resulted in firms locating in non-optimal locations. This has a negative effect on local economies because there is a better use for the property.
Am I the only one who thinks that having Devon Reid on an Economic Development Committee is odd given that his world view is that businesses only exist to pay taxes and fees and provide work that is centered on the needs of the employees rather than the business that employs them?