By Dee Longfellow
For The Independent
Elmhurst officials filed a suit in February against Lucky Motors, a company that located itself at 817 N. Church Road near the other Grand Avenue car dealers in exchange for some healthy tax incentives. The suit was brought forth due to the fact that in the fall of 2015, the company had apparently moved to a new store at 225 W. Roosevelt Road in Villa Park. Lucky Motors even posted a sign on the door of the Church Road building, directing visitors to the location in Villa Park.
It was evident at that time that Lucky Motors had moved its operations out of Elmhurst, which was in violation of its agreement to receive any tax incentives. The terms of the contract signed in 2010 said in order to receive a rebate of 50 percent of the sales taxes it received, the company was required to remain in the City of Elmhurst for ten years; if they left before five years, they would owe the entire amount back to the City in full. The lawsuit states that Lucky Motors owes the City about $145,000.
When Lucky Motors refused, the City filed suit for breach of contract. Lucky Motors then countersued, claiming the City was to offer assistance to the company to obtain more property in the area but that the City had refused.
City Manager Jim Grabowski told The Independent that was not true.
“We sued them for breach of contract, part of which said the company had to stay within Elmhurst,” Grabowski said. “They could not move locations, but had to remain in Elmhurst. Lucky Motors, however, chose to move to another community.
“The contract read that because of the tax incentives, they had to stay in town and if they leave before five years, they had to pay the entire amount back to the City.”
While the Church Road location remained dark, Lucky Motors conducted business from a sprawling, highly-visible location on Roosevelt Road in Villa Park.
“Our position is that the only way to cure the contract violation is to pay us the money,” Elmhurst city manager James Grabowski said earlier this week. “In our opinion, he had closed the business. That’s the city’s position.”
On Friday, June 10, a judge threw Lucky Motors’ countersuit out of court.
“I’m happy to say that just today, I heard from our attorney,” Grabwoski said on Friday, June 10. “The judge threw out Lucky’s countersuit, so now we will move forward with the suit and all that goes with it.
“We hope to collect the entire amount for the taxpayers of Elmhurst.”
The city has sales tax rebate agreements successfully in place with several other dealers in town, including with Ed Napleton’s Kia, Wilkins Hyundai-Mazda and, most recently, with Larry Roesch Chrysler-Jeep-Dodge.
The City’s finance department indicates sales taxes on cars account for about 35 percent of the city’s total sales tax revenues, which provide about 20 percent of general fund revenue.
