Title/Name/Summary
Zeigler Nissan & Infiniti of Orland Park
History
In January 2016, Zeigler Auto Group purchased the Nissan and Infiniti dealerships in Orland Park. Ziegler has also been the owners of the Orland Park BMW Dealership since August of 2013. Zeigler Auto Group is a family owned and operated retail automotive dealership (23 locations) headquartered in Kalamazoo, Michigan (see attached summary).
The proposed project includes the construction of a new Infiniti dealership to be located at 8751 159th Street (the formerly approved Shoppes at 88th) and the renovation of the existing Nissan dealership. Zeigler has formally petitioned for their Special Use Permit and their public hearing is anticipated for August 2016. The vacant property (which was previously foreclosed) is also under contract with Zeigler pending Village approvals and entitlements. When finished, they project additional employment of 50 people.
Zeigler has requested a sales tax sharing Incentive Agreement with the Village of Orland Park to assist with their proposed project. Based upon their financial models, Zeigler anticipates increasing their taxable sales by over 100%, amounting to over $35 million in additional taxable sales. This would mean an increase in sales tax of over $356,000 annually, of which 50% would be shared with Zeigler, based upon the following proposed terms:
Nissan:
Nissan Dealership Renovation Project - $1,050,000 capped cost (capital costs only)
50% of incremental sales tax sharing (not including amount currently generated)
2015 Sales Tax Base Set - $207,628 (remains 100% Village of Orland Park)
Ten year term - This is consistent with previous BMW term
Engineer Verification of costs required
Job Creation/Retention and private investment numbers required
Claw back provision (incentive payback) if the dealership closes/relocates outside of Village of Orland Park within 10 years
Payments will be made quarterly by the Village of Orland Park, as increment is produced and paid by the State of Illinois
Compliance with all Village of Orland Park zoning, building and other applicable codes required
Infiniti:
New Infiniti Dealership - Development and Construction - $8,050,000 capped cost (capital costs only)
50% of incremental sales tax sharing (not including amount currently generated)
2015 Sales Tax Base Set - $131,030 (remains 100% Village of Orland Park)
Ten year term - this is consistent with term of BMW agreement
Engineer Verification of costs required
Job Creation/ Retention and private investment numbers required
Claw back provision (incentive payback) if the dealership closes/relocates outside of Viilage of Orland Park within 10 years
Payments will be made quarterly by the Village of Orland Park, as increment is produced and paid by the State of Illinois
Compliance with all Village of Orland Park zoning, building and other applicable codes required
Please note there are two existing agreements already in place for these dealerships. The Infiniti dealership never surpassed the base and no sales tax has been shared. The Nissan was a five year agreement, and the Village has paid $813,664 to date with two years to go. This agreement is capped at $850,000. Both of these agreements would be terminated and replaced with a new one.
Finally, Zeigler has requested that a combined base of $338,658 be used in the agreement. This is the total of each of the existing dealership's 2015 Sales Tax generated. This will allow greater flexibility between the dealerships, if one performs better/worse than the other. However, it has no direct financial impact on the Village, as the full base amount of $338,658 must first be received by the Village of Orland Park prior to any sharing of new incremental sales tax. However, in the future, if one of the dealerships is closed or sold, the base amount of $338,658 would still need to be generated by the remaining dealership prior to any sales tax sharing. Zeigler is aware of this provision, as well.
The proposed terms of the agreement will be incorporated into the final Development Agreement, once they have completed their zoning approval process. However, Zeigler has requested approval of the proposed terms prior to finalizing and completing their zoning entitlement process, and closing on the subject property.
Recommended Action/Motion
I move to recommend approval of a Sales Tax Sharing agreement with Zeigler Nissan and Infiniti, as outlined above and to be incorporated into their final Development Agreement, pending approval of the zoning, special use and building permits.