Woodstock City Council members will meet Tuesday to consider a sales tax incentive deal for Kunes Country Auto Group.
Kunes Country bought the Benoy Motors site, 1790 S. Eastwood Drive, last year and is planning a $3.6 million expansion project, according to city documents. Kunes Country owns 16 dealerships in Illinois and Wisconsin.
The auto group wants to expand its building from 20,660 square feet to about 27,000 square feet. A new showroom, expanded service area and modern facade are planned, according to city documents.
Kunes Country also has asked the city to assist the business in speaking with the Illinois Department of Transportation to determine whether direct access to the dealership from Route 14 is possible, according to city documents.
The dealership expects to double or triple its sales volume as a result of the project, and it wants a share of the sales taxes generated by the new sales, according to city documents.
City Council members will consider a 12-year sales tax rebate deal. The proposed agreement is laid out so that the city would receive the first $100,000 in sales tax generated in the year. This is the baseline of what the dealership typically generated before its project, according to city documents.
Then the city would rebate a portion of sales taxes at more than $100,000 for the remainder of the year. It’s expected that in a 12-year period, Kunes Country will get back $659,017 – about 20 percent of its project costs, according to city documents.
There is a possibility the dealership could earn more, however.
“In each year, there is also a ‘stretch goal’ established that allows Kunes Country to retain a higher percentage if they sell significantly more than expected,” Woodstock Economic Development Director Garrett Anderson said. “In the interest of of maintaining the ‘stretch goal,’ the agreement allows up to 50 percent of project costs to be reimbursed through this formula.”
The agreement would be beyond the norm because Woodstock’s current sales tax rebate policy says in part that agreements should not go beyond 10 years or rebate more than 25 percent of project costs, according to city documents.
“The City Council has the ability to modify any and/or all of these provisions at its discretion,” Anderson said.
The city could rebate the taxes three times annually, according to city documents.
Woodstock’s 1% home rule sales tax does not apply to vehicles.
Council members will meet at
7 p.m. Tuesday at City Hall, 121 W. Calhoun St.