Administration & Finance Committee
Regular MeetingNorthbrook, IL · April 22, 2016
Minutes
APPROVED
MINUTES OF A MEETING OF THE ADMINISTRATION AND FINANCE COMMITTEE
VILLAGE OF NORTHBROOK
COOK COUNTY, ILLINOIS
APRIL 22, 2016
CALL TO ORDER
Trustee Scolaro, Committee Chair, called the meeting to order at 7:37 p.m. On roll call, present
were Trustee Scolaro, Trustee Karagianis, and Trustee Ciesla. A quorum was present. Also attending:
Jeff Rowitz, Deputy Village Manager/CFO; Tom Poupard, Development & Planning Services Director;
David Schoon, Economic Development Coordinator; Stewart Weiss, Attorney; Erik Jensen, Assistant to
the Village Manager; Joe Ghaben, Owner/Applicant.
HEAR FROM THE AUDIENCE
None.
DISCUSSION –ECONOMIC DEVELOPMENT PROPOSAL – 1808 HOLSTE
Deputy Village Manager Rowitz reviewed the history of discussions with Mr. Ghaben regarding
the property at 1808-1850 Holste and the requested sales tax sharing agreement. He asked Economic
Development Coordinator Schoon to review a brief presentation on the subject property.
Economic Development Coordinator Schoon reviewed the history of the subject property. Mr.
Schoon stated that the current building is not well suited to current manufacturing standards and it has
had vacancy problems over the past several years. Mr. Schoon explained that Mr. Ghaben has a plan for
a high-end, luxury auto-dealership at the subject property and is asking that the Village participate in a
sales-tax sharing agreement where 50% of the sales taxes be rebated to him for a ten-year period, or to
a maximum rebate of $1.5 million; whichever comes first. All vehicles for sale will be stored indoors and
they will not be servicing vehicles on the property, other than to prep them for sale. The applicant
anticipates a final purchase price of $2.5 million with roughly $1 million in facility improvements.
Economic Development Coordinator Schoon stated that Mr. Ghaben anticipates initial annual sales of
$40 million with a gradual increase to $60 million. The projected annual sales tax would be $340,000 to
$510,000.
Trustee Karagianis stated that he was concerned that the applicant would not aggressively
pursue a lower purchase price if an incentive agreement is given to him. Mr. Ghaben stated that the
purchase price has already been negotiated and he has the property under contract.
Trustee Karagianis asked what kind of improvements the applicant anticipated making. Mr.
Ghaben stated that display windows would be added to the façade to create a showroom, the flooring
will be redone, office space will be created, the bakery which is currently a tenant on the property will
be relocated within the building, and portions of the roof need to be replaced
Trustee Scolaro asked what the standard foot traffic is. Mr. Ghaben stated that traffic varies,
but his business model does not rely on drive-by shoppers. Most of his customers view his vehicles
online and then come to the dealership to make the purchase. Mr. Ghaben stated that 80% of the
people who come to his dealership make a purchase.
Trustee Ciesla arrived at 7:45 am.
Trustee Karagianis asked what the maximum amount of foot traffic they may see in a day. Mr.
Ghaben stated that ten or so would be high.
Trustee Scolaro asked how many cars the facility could hold. Mr. Ghaben stated that a maximum
of 400 could be held. Trustee Scolaro also asked where most of these cars originate from. Mr. Ghaben
stated that 60 to 75 cars are purchased from the Audi and Porsche Exchanges each month.
Trustee Ciesla asked how cars are brought to the facility. Mr. Ghaben stated they can be driven
or brought by semi-trailer. Trustee Ciesla followed up by asking how many semi-trailers may come per
week. Mr. Ghaben stated roughly two.
Trustee Karagianis moved, seconded by Trustee Ciesla to support the sales tax agreement as
proposed. On voice vote, all were in favor.
Trustee Karagianis moved, seconded by Trustee Ciesla to adjourn. On voice vote, all were in
favor. The meeting was adjourned at 7:56 am.
Respectfully submitted,
Debra J. Ford
Village Clerk
Agenda
ADMINISTRATION & FINANCE COMMITTEE
NORTHBROOK VILLAGE HALL, 1225 CEDAR LANE
APRIL 22, 2016, 7:30 A.M., TERRACE ROOM
The Administration & Finance Committee of the Village of Northbrook Board of Trustees will hold a
meeting on Friday, April 22, 2016 at 7:30 a.m. in the Terrace Room of the Village Hall, 1225 Cedar
Lane, Northbrook, Illinois. The following will be discussed.
MEETING AGENDA
1. CALL TO ORDER
2. HEAR FROM THE AUDIENCE
3. DISCUSSION –ECONOMIC DEVELOPMENT PROPOSAL – 1808 HOLSTE
4. ADJOURN
Michael Scolaro, Chair
Administration/Finance Committee
Members: Trustee Karagianis
Trustee Ciesla
Village of Northbrook
Cook County, Illinois
April 22, 2016
The Village of Northbrook is subject to the requirements of the Americans with Disabilities Act of 1990.
Individuals with disabilities who plan to attend this meeting and who require certain accommodations in
order to allow them to observe and/or participate in this meeting, or who have questions regarding the
accessibility of this meeting or the facilities, are requested to contact Greg Van Dahm or Debbie Ford (847-
664-4014 and 847-664-4013, respectively) promptly to allow the Village of Northbrook to make reasonable
accommodations for those persons. Hearing impaired individuals may call the TDD number, 564-8645, for
more information.
MEMORANDUM
VILLAGE OF NORTHBROOK
DEVELOPMENT AND PLANNING SERVICES DEPARTMENT
TO: RICHARD A. NAHRSTADT, VILLAGE MANAGER
FROM: DAVID SCHOON, ASSISTANT DIRECTOR
DATE: APRIL 18, 2016
SUBJECT: 1808-1850 HOLSTE ROAD – ULTIMO MOTORS
On April 22, 2016, the Administration and Finance Committee will be reviewing a request by Joseph
Ghaben, Principal, of Ultimo Motors, (the “Applicant”) for a retail sales tax rebate sharing agreement
with the Village for his proposed indoor, used luxury car dealership at 1808-1850 Holste Road (the
“Subject Property”). Staff has been in negotiations with the Applicant regarding a sales tax rebate
sharing agreement for the Committee’s consideration and recommendation to the full Board of
Trustees. In summary, the Applicant requests that the Village rebate 50% of the 1% sales tax generated
by auto sales at the dealership for 10 years or $1.5 million, whichever comes first.
Property Description
The Subject Property is 3.42 acres in size and contains an existing one-story, 94,227-square foot
industrial/warehouse building. The Subject Property is generally located on the north side of Holste
Road, east of Shermer Road (see attached photographs of the site). In 2015, the Subject Property was
rezoned to the ICS Industrial and Commercial Services District, which is consistent with the
Comprehensive Plan’s future land use designation. The surrounding properties to the east, south, and
west are zoned I-1 Restricted Industrial. A parcel located southwest of the Subject Property was
rezoned to the ICS Industrial and Commercial Services District in 2014. The property to the north is
zoned I-2 Light Industrial District. The Subject Property’s current zoning allows “Motor Vehicle Dealers
(New & Used), But Not Open Sales Lots” as a permitted use.
The current property has been predominately vacant for many years. In fact, given its history of
vacancy, in October 2012, the Village’s Industrial and Commercial Development Commission toured the
facility as a potential candidate site for the Cook County Class 6b tax relief program. Given its relatively
low ceiling heights, it’s less than desirable truck dock configurations, and limited number of parking
spaces for a manufacturing use, the building has remained predominately vacant.
Ultimo Motors & the Sales Tax Rebate Sharing
The Applicant has developed the concept of an indoor, used luxury car dealership and has established
two such businesses, Ultimo Motors in Warrenville (2012) and Ultimo Motorsports in Westmont (2014).
Given his success in the western suburbs, he intends to bring his concept to the North Shore and has
selected Northbrook as his desired location.
In speaking with the Applicant, his business model does not require this type of dealership to be located
on a high volume traffic roadway as most customers shopping for a used vehicle start by searching the
internet. Once they have identified a vehicle that they are interested in purchasing on-line, they then
visit the dealership to purchase the vehicle.
Page 1
In addition to acquiring the property for $2.35 million, the Applicant has stated that it will also need to
invest approximately $1 million to repair and improve the Subject Property, which would include
relocating an existing bakery tenant to another portion of the building, constructing a glass store-front
along Holste Road, installing LED lighting throughout, resealing all the floors, repairing the roof and
HVAC systems, landscaping the property and other improvements.
As previously stated, the proposed agreement would rebate 50% of the sales tax generated by the
dealership for 10 years or $1.5 million, whichever comes first. The Applicant anticipates that its retail
sales would start at $40 million per year and then stabilize at $60 million per year. The Village collects
1% sales tax on in-state auto sales. Based upon the Applicant’s estimate for in-state sales, the
dealership would initially generate sales taxes of $340,000 per year, and eventually increase to $510,000
per year. These amounts would be equally split between the Applicant and the Village for 10 years or
until the Village has rebated $1.5 million, whichever occurs first. After that, the Village would retain
100% of the 1% sales tax.
Village’s Use of Sales Tax Rebate Sharing Agreements
The Village has only entered into one other sales tax rebate sharing agreement with a local Northbrook
business, and that was Foley Cadillac in 2003. To assist with retaining that business and its investment
to expand and improve its site, the Village agreed to share with that dealership 50/50 of any sales tax
revenue above the base year sales tax collections. The sales tax sharing rebate agreement is set to
expire on the earlier of (1) the date this is 20 years after the date Foley acquired the adjacent properties
on which to expand its operations or (2) the date on which all eligible expenses had been reimbursed by
the Village. In the end, the total amount of eligible expenses was $4 million.
Summary
Staff suggests that the Village’s Administration and Finance Committee consider the following question
when reviewing the Applicant’s request.
1. Is the proposed sales tax sharing agreement necessary and appropriate to provide for the reuse
of the Property with the dealership and for the related economic development benefits to the
Village?
The Applicant and staff will be present at the April 22, 2016, Administration and Finance Committee
meeting.
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HOLSTE
EET
ED STR
UNNAM
SHERMER
OLD WILLOW
¹ 0 210 420 630
Feet 1808-1850 Holste Road
VILLAGE OF NORTHBROOK
T
D STREE
UNNAME
HOLSTE
¹ 0 75 150 225
Feet 1808-1850 Holste Road
VILLAGE OF NORTHBROOK
1850 Holste– Site Photos
Southwest Front facade Southeast Front facade
Middle of the building, front facade Existing parking on the east side of the property