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Evanston will give up 80 percent of the sales tax revenue from a new Fiat dealership for the next four years under a deal approved unanimously Wednesday night by the city’s Economic Development Committee.

Alderman Melissa Wynne, whose 3rd Ward includes the Chicago Avenue dealership site, called the move by Richard Fisher, who also owns the three other car dealerships in town, to land the Fiat franchise “terrific news.”

Autobarn owner Richard Fisher handing out plans for his projects to EDC members.

Fisher says he expects to spend more than $2 million to buy the dealership, now located in Highland Park, and move it to a site at 1034 Chicago Ave. that’s now a used car showroom.

The sales tax rebate would be capped at $520,000 — so it would allow Fisher to gradually recover from the city up to a quarter of his start-up cost for the dealership over the four year span.

Wynne secured promises from Fisher at the meeting that he would make modifications at his existing dealerships to address noise and appearance concerns from immediate neighbors — bricking up an access door on the alley and replacing a chain-link fence with a “sound-attenuating wall” like one at the new Trader Joe’s nearby.

Alderman Melissa Wynne, 3rd Ward.

The agreement still requires approval from the full City Council, but that’s considered highly likely, because most aldermen are members of the EDC.

The City Council is already scheduled to vote next month on a four-year 50/50 sales tax sharing deal for Autobarn’s existing Mazda, Volkswagen and Nissan dealerships in connection with Fisher’s plan to expand service and storage operations to the former Shure headquarters at 222 Hartrey Ave.

Aldermen have already approved a $2.5 million tax increment funding agreement for the Hartrey project as well as supporting a resolution to qualify the site for a county property tax reduction program.

As reported in an Evanston Now series earlier this year, auto dealerships are frequent recipients of sales tax deals, property tax incentives and tax increment funding deals.

Once the rebate deal expires, based on sales estimates provided by Fisher, the city could receive more than $175,000 a year in sales tax revenue from the new Fiat dealership.

The city’s total sales tax revenue for this year is budgeted at $15.75 million.

Related story

Autobarn to add Fiat, seeks city tax-sharing deal

Bill Smith is the editor and publisher of Evanston Now.

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9 Comments

  1. Is this a gift?

    This would be the 3rd giveaway to Autobarn in less than a year. It appears that Evanston tax payers are assuming a major portion of the risk for a private business.

    Maybe Bill can clarify the math.

    The city expects $ 175,000 a year in sales tax revenue from the Fiat dealership. Is the city going to rebate $ 140,000 back to the dealership and keep just 35k?

     

    1. This plan sounds terrible.

      This plan sounds terrible.

      How many of the "jobs" created will pay comission only?

      1. Corporate welfare at its worst

        Why of why does the city of Evanston feel the need to continue to shower millionaires with taxpayer money?  This has to be about the worst deal of all:  Moving a handful of commission only jobs from a few suburbs away and then agreeing to give the bulk of the sales tax back to the rich owner?  How does this make sense for anyone who can do math?  

        Let’s all agree to stop lying and calling this "economic development".  It is not.  This is corporate welfare plain and simple.  This owner has been conditioned to keep asking for more because we have shown him we will keep giving him more.  Meanwhile every homeowner in Evanston sees their taxes go up and up to pay for this continued rip off. 

  2. Tax breaks good Idea to draw in new business

    Providing a tax break as an incentive for new business development is a great idea. I disagree with the commentors below who say that the city is taking on the risk of a new business.  A tax break is not the same thing as a government hand-out. The city does not currently receive any tax money from this business, and it will not receive any tax money unless the business comes. The business assumes all the financial risk for moving shop.

    It makes sense to encourage this move by allowing the business to keep more of the revenue IF the business succeeds.

    Good decision.

     

    1. Economic development?

      How is moving these "jobs" from one town to the next economic development?  The total is the same, just the owner is now being given a handout by one city to move them.  You bet they will quickly move them out as soon as a better deal can be found in yet another town.  Sales taxes exist to help fund services needed for the common good.  This particular business owner is playing our town for a bunch of fools. Unfortunately, no one on the council is asking tough questions, so we seem very eager to play the part.

    2. Fix It Again Tony

      My real estate taxes went up nearly $300 a month this year… guess I won't be buying a VW…or a Fiat… or any new car for a while…

  3. Ugh

    So Solyndra was a good cause? Corporate welfare and millionaires and billionaires? Look, the Autobarn and Richard Fisher have had a footprint here in Evanston for years. The company has supported the community in so many ways, from charitable giving and support to enhancing the tax base, employment and bringing consumers into our town. And I do not think it is out of line for any business person to work towards such partnerships and take every opportunity to leverage what is available. It is common business sense, anyone who does not probably will not be in business long. So I am for it, bring Fiat in, leverage the tax breaks and grow your business Mr. Fisher. Because when the Autobarn, or any business in Evanston succeeds, we all succeed. I do not subscribe to the war on wealth, and do not frown upon success. I relish it and encourage it.

    1. When car dealers can tell me

      When car dealers can tell me the exact price of the product they are selling… without "checking with their manager"… like most retailers do…and they stop charging me a "Doc Fee," then maybe we should work with them. I'm in the industry and dealers' business practices are sketchy at best.

    2. Most don’t get tax breaks

      Except that 99% of small business don't get these tax breaks.  Nor do 100% of homeowners.  Sorry, I won't agree that corporate welfare is economic development.  It would be nice to see some statistics or totals here if anyone has them.  Could it be that this Richard Fisher and Autobarn are getting more in handouts from the city than all of the assistnance recipents of the former Township combined? 

      Its great that they  "support the community".  Buying hotdogs for the kids at a parade and sponsoring things is easy when you are getting millions in various tax rebate schemes.  This is a rip off plain and simple.  Let a business that can pay its own way open there.  Oh wait, there is a used car dealership ther already that pays sales taxes. Guess we better figure in that lost sales tax in addion to 80% rebate we are going to lavish on Autobarn.   Sitll feel good about that math?

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