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updated: 4/17/2018 8:41 AM

Palatine wants to lure auto dealerships from Arlington Heights

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  • Palatine will enter negotiations for a deal that could bring two new car dealerships from Arlington Heights to a long-vacant, village-owned Rand Road property where a Menards previously operated.

      Palatine will enter negotiations for a deal that could bring two new car dealerships from Arlington Heights to a long-vacant, village-owned Rand Road property where a Menards previously operated.
    Mark Welsh | Staff Photographer

 
 

Palatine will enter negotiations for a deal that could bring two new car dealerships from Arlington Heights to a long-vacant, village-owned Rand Road property where a Menards previously operated.

Village council members Monday night voted 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. Palatine officials said a desire to control the site's future development is why the village agreed to buy the property for $8 million after the store closed when a new location debuted in Long Grove in 2009.

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.

Palatine Mayor Jim Schwantz said the village never intended to own the Menards site for nine years -- a situation that was dictated by an economy that "ebbs and flows." He complimented the village's top administrators for bringing forward the Napleton proposal.

"This is enormous," Schwantz said. "It's sad to potentially see the flea market go, but we're excited for the opportunity for a new use for that property."

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 is part of what elevated Napleton's proposal over one submitted by homebuilder PulteGroup Inc. for the Menards property, officials said.

Chairman Stephen Napleton told the Daily Herald a need for a bigger property is driving the proposed move of the two dealerships.

Documents show Napleton met all of Palatine's criteria 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 offered $1.8 million to construct up to 50 two-story townhouses.

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 would construct separate buildings for Subaru and Mazda and a car wash on the 9-acre Menards site, with a goal of opening by late 2019. Napleton also is proposing a separate purchase of an adjacent 5 acres owned by Knupper Nursery and Landscape for continuation of a garden center and to have land for growth opportunities.

In a statement Monday, Knupper owners John and Sue Heaton said the pending deal has "mixed emotions" and came together quickly. Napleton would pay $2.9 million for the Knupper property and business, according to company documents submitted to the village.

"It is with great sadness that we are currently planning for this to be our last spring in business," Sue and John Heaton said, "and for having Knupper's closed down by sometime this summer."

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