THE JOURNAL & TOPICS NEWSPAPERS | MONDAY, APRIL 14, 2008
Park Ridge: Car Dealership's $400,000 Incentive Out The Window
By CRAIG ADAMS
Journal Reporter
According to Mayor Howard Frimark, the City of Park Ridge will not pay William Napleton of Napleton Cadillac car dealership any of a $400,000 redevelopment incentive agreed to in January.
Frimark told the Journal on Monday, Apr. 14 he received a legal opinion from City Attorney Everette Hill.
"Due to the fact that they're moving the dealership out of town... the environmental incentive we gave them would also cease to exist," he said.
The council approved an incentive agreement with Napleton Cadillac on Jan. 28. That agreement provided a sales tax rebate to the dealership in exchange for Napleton remaining in Park Ridge for 15 years. The city would retain the first $200,000 in sales tax the dealership generated each year, Napleton would receive a rebate of the next $100,000, and anything over $300,000 would be split between the two parties. In addition, the agreement gave Napleton $400,000 to demolish and perform environmental cleanup on their former site at 200 N. Northwest Highway. The dealership wanted that money to help pave the way to a sale of the land to Park Ridge Corp., LLC, a developer that wants to build town homes on the site.
However, Napleton announced that he would close the doors to his Cadillac, Buick, and Pontiac dealership effective May. 2. In a letter to Mayor Howard Frimark dated Apr. 9, Napleton stated, "Our franchise agreement with General Motors that allows us to sell and service these lines of vehicles affords General Motors some contractual rights that they have chosen to exercise."
That notification raised questions at the Apr. 7 council meeting when Frimark said he met with Napleton earlier that day.
"It is true that as of May 2, the dealership will cease to exist," said Mayor Howard Frimark at that council meeting. "GM called in the dealership."
At that meeting, Ald. David Schmidt (1st) and Ald. Frank Wsol (7th) asked the city to notify Napleton that the contract could be voided due to the closure. Frimark responded that he wanted to wait for a legal opinion before deciding if the city was still obligated to pay the $400,000.
Schmidt still questions Napleton's statement about GM pulling the dealership. He also wonders when Napleton knew about the closure and if he was negotiating with the city in good faith.
General Motors manager of dealer communications Susan Garontakos cast doubts about Napleton's statement that the corporation made the decision.
"It was not true," she said. "It was both our decision."
"There was a lot of discussion," she said, explaining the company does full market research and brings other area dealerships into the project before agreeing to close a dealership. "There was an agreement, a mutual agreement, to close the Buick Pontiac dealership there," she said. "We didn't pull it."
She added the closure of the Buick Pontiac fits with GM's "four channel strategy" keeping Buick and Pontiac with GMC, Cadillac with Hummer and Saab, and having standalone Chevrolet and Saturn dealerships. "It makes better sense to make sure we have the right dealerships in the right locations for our customers," she said.
Garontakos also commented about how long dealer-closing negotiations usually take.
"Anywhere from 6 months to 18 months," she said. When asked the shortest amount of time such negotiations could take, she replied, "Depending on the situation, I imagine a few months." Napleton announced the closure only 10 weeks after the council approved the agreement.
Frimark is unsure of the origin of the decision or Napleton's knowledge. Reviewing Napleton's letter and statements from General Motors, he said, "There are a lot of stories out there. It's probably someplace in the middle." Frimark appears ready to look towards the future. "We are trying to get a discussion going with another dealership group," he said of future use for the Napleton site. "It may be redeveloped, hopefully into something that can produce sales tax." A third option is using the land for the proposed new police station, putting it alongside the Public Works Service Center.
Schmidt, for one, hopes the city does not need to negotiate further with the dealer owner.
"It seems like a decent place for a police station, but the thought of doing business with Napleton is offensive to me," he said.