STEVEN M. MORLEY CITY OF ELMHURST uavor 209 NORTH YORK STREET ate ELMHURST, ILLINOIS 60126-2759 CV TEASUAR 1630) 530-3000 JAMES A GRABOWSKI wwnw.elmhurst.org, crv MANAGER July 5, 2017 To: Mayor Morley and Members of the City Council Re: iMotorsports Financial Assistance Incentive The Development Planning and Zoning Committee met June 26, 2017 and again on July 10, 2017 to discuss the financial assistance request from iMotorsports to assist with expansion of their current operation to add the sale of Indian brand motorcycles. Owner and President Tim Walter ‘was present to discuss their request and answer any questions Motorsports, prior to opening in Elmhurst, was an on-line used motorcycle dealer whose home was Roselle, Ilinois. In the Spring of 2014, iMotorsports approached the City of Elmhurst with the desire to replace an underutilized and blighted truck repair center generating zero sales tax on a Grand Avenue site that had potential for automobile sales. In May of 2014 the City agreed toa Sales Tax incentive Agreement (10 year duration, 50/50, up to $250,000) with iMotorsports to assist in redeveloping the property. The 2014 revenue sharing agreement discussions included an option to revisit said agreement if a major manufacturer considered iMotorsports {for a new point of sale. iMotorsports is currently outperforming the 10 year projections from the 2014 agreement, turning this zero sales tax producing property to a $12 million dollar point of sale in 2016. iMotorsports has proven their strength in the marketplace, prompting manufacturers to take interest in a proven performer of sales, parts, and service. Polaris has approved iMotorsports as, a dealer for the “Slingshot”, a 3-wheel motorcycle. Based on iMotorsports’ performance, Polaris has offered a full Indian Motorcycle point of sale. With this offer, Polaris requires: '* One million dollar showroom expansion and building improvement. ‘© Renovated parts and service department. ‘* Enhanced technical assistance and training and the hiring of additional employees in Elmhurst. ‘© Opened point of sale by Spring of 2018. After discussion it was the consensus of the DP&Z Committee to recommend a sales tax incentive with the following parameters: '* The new sales tax incentive agreement would be in addition to the existing sales tax incentive agreement from 2014.The new agreement would be a maximum total sales tax incentive at this location of $500,000, beginning January 1, 2018 for a period not to exceed 12 years. Sales tax increment over the 2016 actual year sales tax receipts will be split during the twelve year period as follows: 50% City and 50% iMotorsports. iMotorosports would receive $100,000 up front for immediate expansion needs. iMotorosports 50% share would not be distributed to iMotorsports until the City has recouped the $100,000 upfront payment. Sales tax incentive will be calculated and dis with sales from January 1, 2017. ‘Amend the original sales tax agreement to set a sales tax base (2016 sales) to separate the original agreement incentive share from the new proposed sales tax incentive. ibuted annually on a pay as you go basis beginning Similar to the current agreement, a fundamental breach of the agreement by iMotorsports would require 100% payback of the amount of incentive paid to iMotorsports up to that point. A fundamental breach would be: iMotorsports inability to complete the required renovation by June 30, 2018 or; The designation of a location other than the dealership property as the point of sale for Indian motorcycles, used motorcycles, or parts, and accessories actually sold on the dealership property. Therefore, the Development, Planning and Zoning Committee recommends that the City Council approve the additional sales tax incentive for iMotorsports for an amount not to exceed {$500,000 or 12 years, with $100,000 as an upfront incentive to assist with expanding the showroom, renovated parts, service upgrades, the need for technical assistance and training and the hiring of additional employees. The City Attorney is hereby directed to prepare the necessary documents for City Council approval. Respectfully submitted, DEVELOPMENT PLANNING AND ZONING COMMITTEE Mrythad Merqcest, Chas for ‘Michael Honquest, Chair ek Dativtes, Vie Chern fee ‘Noel Talluto, Vice-Chair Mah Gite. Mark A. Mulliner _ [ee