The Aurora City Council is about to vote on a sales tax rebate plan to help an auto dealership in Aurora.
The city has a pending deal with Napleton Valley Hyundai, 4333 Ogden Ave., that would require the dealership to renovate its current operation and open a separate dealership across the street for Genesis, Hyundai’s line of luxury cars. .
The deal would involve a global sales tax refund of more than $10 million by the city to Napleton over the next 15 years.
In exchange, the dealer would agree to stay in Aurora and renovate their current dealership, and create the new Genesis dealership. Currently, Napleton is selling Genesis out of the Hyundai dealership, but the South Korea-based automaker is demanding that the Genesis dealerships separate from the rest of the Hyundai operation.
Members of city council in committee of the whole this week agreed to move the sales tax deal to next week’s regular city council meeting. It’s under unfinished business, which means there could be more discussion on the matter.
There was no discussion of the deal by city council members at this week’s committee of the whole meeting. However, he was recommended by the Finance Committee by a very slim margin of 3 to 2.
Trevor Dick, deputy director of the mayor’s office for economic development, explained this week that the sales tax rebate agreement could be the difference between the dealership staying in Aurora or leaving.
“If the city refuses, there is a risk that the city will lose the concessionaire,” Dick said. “That would mean a loss of 100% of the sales tax generated.”
The sales tax rebate is actually two different propositions, as it affects two different projects – the new Genesis dealership and the renovation of the current Hyundai dealership after Genesis broke.
The first deal would give Napleton a $5.2 million rebate over 15 years to build the new Genesis dealership. It would be a 50-50 split between the city and Napleton each year.
The second deal would be a $5 million rebate over 15 years for the renovation of the current Hyundai dealership. This would not only involve the renovation of sales areas, but also new high-tech service bays designed to service the latest cars.
In this agreement, the city would receive the first $500,000 in sales tax each year, with Napleton receiving 65% of the sales tax on top and the city 35%. It would run for 15 years up to the cap of $5 million.
Either way, dealerships would stay in business for 15 years or face a penalty refund of a portion of the rebate to the city.