Valley Honda’s dealership on Ogden Avenue in Aurora, near Route 59 and the border between the city and Naperville, is set to be expanded with the help of a multimillion-dollar tax sharing agreement.
The agreement, which was approved Tuesday by the Aurora City Council, would give the dealership up to $12.8 million in sales-tax-generated revenue over the next 15 years, representing just under 75% of the total expansion project’s cost of $17.5 million.
The dealership is currently “busting at the seams,” and without Aurora’s financial help, it would not be able to expand for the long-term, an attorney representing Valley Honda previously said.
Valley Honda President and CEO Casey Brindley told the Aurora City Council’s Committee of the Whole last week that the dealership is currently one of the top 10 Honda dealerships in the country for overall sales. Although it is profitable, the dealership is employee-owned and so has less access to capital funds than privately-owned dealerships do, he said.
The expansion and modernization project is set to add a third service lane to ease congestion, expand the square footage of the showroom so the sales department can grow, expand the square footage of administrative offices and build infrastructure needed to sell and service electric vehicles.
Valley Honda is expected to add 28 new jobs in the first year and almost 100 new jobs by 2030 because of the expansion project. Almost half of its current 215 employees are Aurora residents.
Under the tax sharing agreement, Aurora would receive all of the first $1.05 million in sales tax generated annually by the dealership, Aurora Chief Management Officer Chris Minick previously said. If the dealership generates additional sales taxes over that amount, they would be shared with the dealership: 35% would go to the city, and 65% would go to the dealership.
The deal would last for 15 years, Minick previously said, but Valley Honda could not receive more than $12.8 million through the tax sharing agreement.
This type of economic development incentive is one of the safest Aurora can give because the city is guaranteed its normal amount of sales tax from the dealership plus more, Aurora Chief Operating Officer Alex Alexandrou said at a meeting last week.
Aurora has been doing these types of deals since the early 1990s, he previously said, and they are common throughout the Chicago area.
The agreement was approved on Tuesday as a part of the Aurora City Council meeting’s consent agenda, which is typically for routine or non-controversial items that are all approved with one vote.
rsmith@chicagotribune.com
