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File #: 2017-0603    Version: Name: Rizza Porsche Sales Tax Sharing Agreement
Type: MOTION Status: PASSED
File created: 8/17/2017 In control: Board of Trustees
On agenda: 9/5/2017 Final action: 9/5/2017
Title: /Name/Summary Rizza Porsche Sales Tax Sharing Agreement
Attachments: 1. Sales Tax Rebate Agreement 7/17/18, 2. Rizza Porsche Attachments

Title/Name/Summary

Rizza Porsche Sales Tax Sharing Agreement

 

History

In April of 2017, the Village granted a special use permit with modifications for the new Rizza Porsche development at 8760 159th Street. The Porsche dealership is relocating from 8100 159th Street where it shared space with Rizza Ford. The Ford dealership will remain at the existing location. Along with the relocation Porsche is proposing an expansion of the their dealership as compared to the site they currently occupy. In addition, Rizza Porsche and Ford are currently under the same corporation. They have submitted information that shows the dealerships will be separated into individual corporations. The following request for sales tax sharing only includes the Porsche dealership.

 

The proposed Porsche development includes a new 18,010 square foot dealership and two out lots on a 7.6 acre site. The project has been approved and has begun site work. The dealership currently employs 32 people full time. After construction the dealership will add 22 full time employees. The petitioner anticipates 150 temporary construction jobs created as a result of this project.

 

Rizza Porsche has requested a sales tax sharing incentive agreement with the Village of Orland Park to assist with their proposed project. Based on the  information submitted by the petitioner they anticipate sales tax generated by their dealership to increase by 10% in the first year (2019), 20% in the second year (2020) and substantial increases in the years thereafter. The terms of the proposed sales tax sharing agreement are summarized below.

 

Rizza Porsche

New Porsche Dealership - $9,000,000

50% of incremental sales tax sharing

Sales Tax Base Set - $150,342 - 3 year average of Sales Tax Collected by the Village

(Sales Tax Base remains 100% Village of Orland Park)

Ten year term - this is consistent with term of BMW and Infiniti agreements

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 the 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

 

 

The petitioner submitted a table outlining the Porsche dealership 5 year sales volume. The document breaks out the taxable sales and the last row in the table outlines the total amount of sales tax that was collected by the Village. The 3 year average will set the base for this agreement. The Porsche Sales Volume table is attached for reference.

 

On August 21, 2017 this item was reviewed by the Development Services Planning and Engineering Committee, recommended for approval and referred to the Village Board of Trustees for consideration.

 

Recommended Action/Motion

I move to approve a Sales Tax Sharing agreement with Rizza Porsche as outlined above.