The Aurora City Council is set to vote on a sales tax rebate plan to help a car dealership in Aurora.
The city has a deal pending with Napleton Valley Hyundai, 4333 Ogden Ave., that would result in the dealership renovating its current operation and starting a separate dealership across the street for Genesis, the Hyundai luxury car line.
The agreement would involve an overall sales tax rebate of more than $10 million by the city to Napleton during the next 15 years.
In return, the dealer would agree to stay in Aurora and renovate its current dealership, and create the new Genesis dealership. Currently, Napleton sells Genesis out of the Hyundai dealership, but the South Korean-based auto manufacturer is requiring that Genesis dealerships split off separately of the rest of the Hyundai operation.
City Council members meeting as a Committee of the Whole this week agreed to move the sales tax deal to next week’s regular City Council meeting. It is under unfinished business, which means there could be more discussion of the matter.
There was no discussion of the deal by City Council members at this week’s Committee of the Whole meeting. However, it was recommended by the Finance Committee on a razor-thin 3-2 margin.
Trevor Dick, the Mayor’s Office of Economic Development deputy director, laid it out this week that the sales tax rebate deal could mean the difference between the dealership staying in Aurora or leaving.
“If the city refuses, there is a risk of the city losing the dealership,” Dick said. “That would mean a loss of 100% of the sales tax generated.”
The sales tax rebate is actually two different proposals, because it affects two different projects – the new Genesis dealership, and the renovation of the current Hyundai dealership after Genesis is broken off.
The first agreement would rebate Napleton $5.2 million over a 15-year period for building the new Genesis dealership. It would be a 50-50 split between the city and Napleton each year.
The second agreement would be a $5 million rebate over 15 years toward renovation of the current Hyundai dealership. It would involve not only renovation of the sales areas, but new high-tech service bays designed to service newer cars.
In that agreement, the city would get the first $500,000 in sales tax every year, with Napleton getting 65% of sales tax above that, and the city getting 35%. It would last for 15 years up to the $5 million cap.
In both cases, the dealerships would to stay in business for 15 years or face a penalty of paying some of the rebate back to the city.
