Local

Sunnyside Chrysler Dodge Ram in McHenry gets economic incentive worth $300K

Incentive to encourage car dealership to add Jeep dealership, expand

McHENRY – A car dealership that serves as "the anchor of West Elm Street" will receive up to $300,000 in reimbursed sales tax dollars over the next 20 years.

The McHenry City Council unanimously approved the economic incentive agreement with Sunnyside Company, a Chrysler and Dodge dealership and vehicle repair shop that sits on the north and south sides of Route 120 west of Meadow Lane.

The incentive is designed to encourage the proposed expansion and renovation of the business on the north side of Route 120, so the dealership can acquire a Jeep franchise.

"They’re adding a whole new line, a Jeep dealership, which we don’t have here in McHenry," City Administrator Derik Morefield said. "We know we’re going to get our money back."

A 3,870-square-foot addition on the east side of the existing building would house five new service bays and would allow the expansion of the existing showroom to more than double its current size, according to documents provided to the city by Sunnyside. The front of the building would be remodeled with a larger entrance and new signs.

The work is expected to cost about $1 million, according to city documents. The project would be done in phases but should be completed by fall, weather permitting.

Chrysler expects Sunnyside Company's new car sales to nearly double with the addition of the Jeep franchise. To handle the increase, the dealership expects to hire three to five sales professionals and office staff, the documents said.

Those additions are part of what the City Council focuses on when it considers these agreements, Morefield said, adding "they don’t just throw money around." The incentives also are part of a plan to encourage development along the Route 120 corridor, which has struggled for many years.

The city currently collects about $66,000 in sales tax on average each year, according to city documents. That number will serve as a baseline in the economic incentive agreement with the dealership only being reimbursed a percentage of its sales tax receipts above that level.

The percentage Sunnyside would receive starts at 75 before falling to 50 percent in Year 4 and 25 percent in Year 12, the documents said. The terms of the agreement are capped at $300,000 or 20 years, whichever happens first.

The amount of sales tax the city collects from the dealership is estimated to climb an additional $25,000 to $30,000 after the Jeep franchise acquisition, the documents said. The amount the city collects in property taxes also is estimated to jump about 36 percent.

The City Council approved a similar agreement with Gary Lang Auto Group in 2009 when it was looking to construct a new building to house its import vehicle sales, according to reports from the time. That agreement was the first in recent memory to be created for an existing business.

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