Two new car dealerships could be on the move from Arlington Heights to a long-vacant Rand Road property where a Menards previously operated in Palatine.
Palatine's elected officials Monday night are expected to consider whether to authorize negotiations for a redevelopment agreement and final purchase price with Napleton's Automotive Group for 9 acres and the 52,000-square-foot Menards owned by the village. Expressing a desire to control the site's future development, the village agreed to buy the property for $8 million after the store closed when a new location debuted in Long Grove in 2009.
Under the tentative plan, Napleton would move its Subaru and Mazda dealerships from Rand Road near Thomas Street in Arlington Heights to Palatine. Potential sales tax revenue in part was cited by the village's top administrators in recommending Napleton's proposal over one submitted by homebuilder PulteGroup for the Menards property.
"To me, this is an absolute home run to have a car dealership coming in," Palatine Village Manager Reid Ottesen said Friday. "These car dealerships, their demand for (village) services are very, very low."
Chairman Stephen Napleton said a need for a bigger property is driving the proposed move of the two dealerships. He said the arrangement of Mazda and Subaru in the same building on a tight property in Arlington Heights is something the brands no longer want.
"When I became aware of this (Palatine) site, it was just perfect," Napleton said.
Documents show Napleton ticked all of Palatine's criteria boxes for sales tax generation, experience, financial and operational capability, timeline and preliminary site plan. Napleton generates about $60 million in annual sales from the Subaru and Mazda operations in Arlington Heights. That level of sales would produce municipal sales taxes of $600,000 a year for the village.
Napleton's current $2.5 million offer for the Menards property and expected local sales tax generation placed the dealership ahead of Pulte, village officials said. The homebuilder is offering $1.8 million to construct up to 50 two-story townhouses.
Wolff's Flea Market has leased the Menards from the village for $120,000 a year for weekend sales since 2009, along with paying property taxes, maintenance costs and other expenses. Cook County records show Wolff's property taxes have fluctuated, with $65,120 paid for 2016, $111,194 for 2015 and $80,531 for 2014.
To make the possible move to Palatine financially viable, Napleton said, the business would want village support for reduced Cook County real estate taxes. Napleton also would seek assistance from a Rand Road corridor tax increment financing district that includes the Menards property.
In a TIF district, property taxes paid to local governments are frozen at existing levels, and taxes above that are diverted to a fund controlled by the village to pay for redevelopment and infrastructure upgrades.
Napleton would construct separate buildings for Subaru and Mazda and a car wash on the 9-acre Menards property, with a goal of opening by late 2019. The dealership also is proposing a separate purchase of an adjacent 3 acres owned by Knupper Nursery and Landscape for continuation of a garden center and to have land for growth opportunities.
About $15.5 million would be spent by Napleton to redevelop the Palatine land. Napleton said he purchased the Mazda and Subaru dealerships in Arlington Heights in 2017 knowing he'd have to find a larger site to separate the brands.
Palatine Deputy Village Manager Michael Jacobs said it would be a "reasonable target" for Napleton to gain approval in mid- to late summer if the dealership's plan proceeds.