The Plano City Council voted unanimously Monday evening to approve a sales tax rebate agreement with the owners of Gjovik Ford of Sandwich that will bring the dealership to Plano.
The council approved the agreement without comment as Scott Gjovik, dealership president, and his attorney, Dan Kramer of Yorkville, looked on. Gjovik and Kramer left the meeting after the council vote.
During a committee of the whole meeting Thursday, the Plano City Council discussed Gjovik Ford’s move from Sandwich to the southwest corner of Route 34 and Mitchell Drive in Plano, in what currently is an open cornfield west of McDonald’s.
During the meeting, the council recommended the retail sales tax rebate agreement for both the proposed Ford dealership and a Quick Lane facility, as well as the adjacent outlots, to be moved forward to the agenda and voted on during the City Council meeting Monday.
“The approval of the agreement will be huge for Plano. In addition to the revenue from sales and property tax, the agreement will be an excellent opportunity to attract other businesses to town. Gjovik Ford is a well-established local business, and we are proud and excited to have them in here in Plano,” Mike Rennels, Plano City Council Ward 1 alderman and chairman of the community development committee said during Thursday’s committee meeting.
Under terms of the agreement, the city of Plano will rebate a percentage of the full sales tax collected back to Gjovik, up to $6.95 million for a maximum of 23 years. The combined property and sales tax to be collected from the dealership project during the term of the agreement is an estimated $12.3 million. Based on Ford’s sales projects, it is expected that the sales tax incentive will be paid off within 16 years.
For the first 15 years of the agreement, Gjovik will receive a rebate of 90 percent, and the city of Plano will receive 10 percent. For the next three years, Gjovik will be rebated 75 percent and the city of Plano will receive 25 percent. After Year 18, Gjovik Ford has the option to extend the 25/75 percentage annually to a maximum of 23 years.
“There is no cost involved for the city, we will be refunding sales tax that will be generated by Gjovik, and once the amount is paid, which is estimated to be around 16 years, the city will receive the full amount of sales tax,” Rennels said. “Also, these numbers do not factor the property tax of the multimillion [dollar] business or the sales tax or property tax for the future businesses that will occupy the adjacent outlots.”
Gjovik Ford plans to purchase 22 acres of land and occupy between 10 and 11 acres. The remaining land will be split into parcels to be developed by other retailers, possibly businesses such as a large retail chain, pharmacy, grocery store or restaurant.
In addition to the Ford dealership, the new Gjovik Ford also will feature a full-service car wash, detail service and Quick Lane. The proposed two-story dealership building would be more than 37,600 square feet, more than triple the size of the current 12,300-square-foot building in Sandwich.
During Thursday’s committee meeting, Gjovik said he already has received approval from the Ford Motor Company for a possible relocation. Soil testing currently is underway and should be finished by next week. If Gjovik Ford closes on the property this spring, the new dealership is planned to be opened by summer 2020.
“We look forward to the opportunity, this will be a new adventure for us,” Gjovik said. “It’s an opportunity to create an auto dealership hub in the city of Plano, with Dempsey a mile west and developable land in between. We are in a prime position to market and sell in Yorkville, Plano and Sandwich. There are long-term demographic opportunities for us with the relocation to Plano.”
Gjovik said that there are no plans at this time to move Gjovik Chevrolet Buick GMC from Sandwich to Plano.
“At this stage, our plans do not contemplate moving our GM dealership from Sandwich,” he said. “It is a possibility, something we would certainly consider. … The land is available to other dealerships interested in relocating, maybe a Nissan or Honda or Toyota. In all likelihood, it is probably not going to be the [Gjovik] GM dealership, but it is a possibility.”
Gjovik Ford generated $288,000 in sales tax for the city of Sandwich in 2017. In May 2018, the Sandwich City Council approved a 15-year sales tax rebate, with Gjovik Ford receiving $250,000 a year for 180 months or $800,000, whichever came first.
Three weeks later, the Sandwich City Council refused to waive $26,000 in building and water/sewer connection fees for the proposed new dealership.
“We were also having difficulties with the soil conditions that could turn into significant problems down the line,” Gjovik Ford’s General Manager Tom Conlin said. “We didn’t want to spend $12 million to $14 million on a new building that could settle and crack in half. The soil conditions, with two pipelines on the property, were not ideal.”
Sandwich Mayor Rick Olson said that he was shocked to learn of the relocation plan, but that “the city of Sandwich has no negative feelings” toward Gjovik Ford.
“We were hoping to have many more years of business with Gjovik Ford in Sandwich, and this definitely came out of the blue,” Olson said. “It was a business deal. It was more than sales tax rebate incentives because [Gjovik Ford] did indicate that they would have to put more money into the soil for the type of building they wanted. Gjovik Ford is one of the highest sales tax contributors, and we’ll have quite a hole in our budget.”
Conlin said that Gjovik Ford has been in discussion with the city of Plano since June 2018.
“We do not want the people of Sandwich to feel like we’re abandoning them,” Conlin said. “It’s not about money, it’s about what’s best for the future of our business. The additional costs necessary to stay in Sandwich would have been astronomical. We want to get the new building developed and up and running as soon as possible to continue to serve the community. Our current building will be for sale and available as soon as we close on the new parcel of land.”
Plano Mayor Bob Hausler was unable to attend the committee of the whole meeting, but said he is excited about Gjovik Ford’s relocation to Plano.
Freelance reporter Lyle R. Rolfe contributed to this story.