Danville council backs auto dealer redevelopment agreement

Danville council backs auto dealer redevelopment agreement

DANVILLE - Despite complaints from two long-time automobile business owners in the city, aldermen threw their support Tuesday night behind a redevelopment agreement that will financially assist in the redevelopment of the former American Chevrolet dealership on North Vermilion Street and the redevelopment of Courtesy Ford's current location on West Main Street.

J.R. Fregia has been operating his Ford dealership and his Dodge dealership at the same location at 231 W. Main St. in downtown Danville, and the redevelopment agreements with the city will provide him financial assistance to renovate his existing location and a second location and split the two franchises, per the request of Dodge officials when Fregia was awarded the local Dodge dealership in 2007.

Fregia is moving the Courtesy Ford dealership to 3533 N. Vermilion St., the former location of American Chevrolet, which moved to Tilton a few years ago, and Fregia's Dodge dealership will remain at the 231 W. Main St. location.

Eldon Wright, owner of Wright Motor Co., 3622 N. Vermilion St., told aldermen Tuesday night that he has a hard time putting his tax money in someone else's pockets and questioned whether this agreement is good for the community as a whole.

"I have a hard time with free enterprise not being free enterprise," said Wright, who added that someone who wants to start another business should go for it but pay for it with his own money.

Gary Knight, owner of Carmack Car Capitol, 3724 N. Vermilion St., and the new NAPA Auto Parts at 122 N. Gilbert St., told aldermen that the city has never offered him a dime, and council members should consider the long-term effects when they start giving away money. He said he would be next to get money, and he believes the proposed redevelopment would go through with or without the city's money.

Vicki Haugen with Vermilion Advantage told aldermen that Fregia's financing through Ford to buy the North Vermilion Street site was contingent upon the city's assistance. That site has been vacant since American Chevrolet moved and is currently owned by a local bank.

Fregia is buying the property, and the redevelopment agreement with the city will provide him a 50 percent rebate of sales taxes on both dealerships up to $100,000 per year and $500,000 total. But the rebate is only on the 1 percent of sales taxes that goes to the city, not on the entire 6.25 percent of sales tax that the state collects from auto dealerships.

The redevelopment agreement also provides Fregia $200,000 in tax increment financing money for renovations at the West Main Street location. That money is reimbursable, meaning Fregia will make the improvements to the property then submit expenses to the city, which will determine which improvements, up to $200,000, are eligible for the funding.

Haugen said she has been working with Fregia since 2009 to find another location, and they "turned the map upside down" looking for a suitable location in the community and outside the community.

She said the North Vermilion Street site was one of the first choices, but the price didn't work. Now, that property is in the hands of a local bank, she said, and that bank "has bent over backward to make this happen."

The mayor said this will allow Fregia to expand both dealerships, and Haugen said Fregia will be adding 25 employees.

Fregia, who's been in the automobile business for many years as was his father before him, said 80 percent of his business is in Danville and that's ultimately where he wanted the dealerships to stay. He said he has a lot of respect for Knight and Wright and believes his business on North Vermilion Street will bring them business as well.

"I'm excited about the idea of this project," he said.

Alderman Bill Black, Ward 7, said he doesn't "particularly relish" sales tax rebates, but if Danville doesn't approve the deal, another community will come along and offer incentives. He said the city has put some protections in the agreement, requiring the money to be paid back if the business ventures aren't successful or leave the city. Black said automobile dealerships are big sales tax revenue generators, and the city needs to keep its dealerships.

"We're not giving away the store ... whereas, if they leave, we get absolutely nothing," he said. "I think this is the best use of sales tax, and the best use of vacant space."

Rickey Williams Jr., Ward 1, agreed with Black, saying that two of the biggest complaints in Danville are about getting more jobs and getting rid of vacant buildings, and this project does both.

"This is a win-win for all of us," he said.