December 01, 2024
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Castle Auto Group adding Subaru dealership building on McHenry campus

Dealership has not sought changes to sales tax rebate with city

By Janelle Walker
Vehicles for sale on Thursday, Dec. 8, 2022, at Castle AutoPlex, 1107 Route 31 in McHenry. Castle, which purchased the former Gary Lang dealership earlier this year, is looking to add two more buildings to the campus in the next couple of years for import brands.

Vehicles for sale on in 2022 at Castle AutoPlex, 1107 Route 31 in McHenry. Castle is set to add a building to the campus. (Gregory Shaver — gshaver@shawmedia.com/Gregory Shaver for Shaw Media )

Following Castle AutoPlex’s purchase of Gary Lang Auto Group in September 2022, CEO Joe Castle said the company planned to add two dealership buildings at the McHenry campus.

One of those buildings is coming to fruition. Ross Polerecky, McHenry’s director of community development, told the McHenry City Council in his monthly written update that city staff has received plans for a new Subaru dealership building at 1107 S. State Route 31.

Currently, the Kia and Subaru dealerships share a building. Subaru will move into the new building and Kia will stay in its current building, which will be remodeled, Polerecky wrote.

Castle Auto does not need to come to the Planning and Zoning Commission or City Council for approvals and will only need building permits from his office, Polerecky told the Northwest Herald on Friday. He said the “entire subdivision was approved for open sales lot when it was originally approved” and “they anticipated expansion.”

Representatives of the auto dealership group attended the council’s Sept. 3 meeting, asking the city to vacate a stormwater easement to allow reengineering on the property.

“To construct a new building the stormwater must be routed [farther] north on the property,” the September report to council said.

First Ward Alderman Vic Santi said it’s “great that they are moving forward with a new building for the Subaru portion of the dealership.”

Attempts to reach the McHenry Castle Auto dealership’s manager Friday were not successful.

Joe Castle said in December 2022 that Subaru likely would request a separate dealership. He also suggested the dealership would seek changes in a 20-year sales tax rebate negotiated with Lang in 2009.

The agreement allows McHenry to keep the first $450,000 in sales tax generated by the dealership. Then, 100% of the sales tax receipts, up to $750,000 each year, goes back to the dealership. Once sales tax revenue exceeds $750,000, the city rebates 60% of the sales tax and retains 40%.

The total rebate for the year cannot exceed 55% of the total annual sales tax revenue, and cannot exceed $8,441,377 or 20 years, according to the city’s Nov. 4 audit update. That audit noted that Castle Auto Group had $545,934 rebated to it in fiscal 2023-24. The dealership has not approached the city seeking proposed changes to that deal.

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