Morton Grove is granting Napleton, successor to Castle Honda, incentives to build new dealership

As Napleton Honda prepares to knock down the old Castle Honda dealership buildings on Dempster Street in Morton Grove and build a new facility, Village of Morton Grove officials last week tentatively approved a package of financial incentives worth up to $4.3 million for the project.

The Schaumburg-based Steve Napleton Auto Group first purchased the property from Castle Honda in October 2021, according to village documents. Morton Grove Village Manager Ralph Czerwinski said the discussions about financial incentives for Napleton, which owns Napleton Honda Morton Grove, began in earnest in August 2022.

“We had heard rumors that the ownership transitioned,” Czerwinski said. “They came to us and indicated they would like to enhance the site and would like to discuss some partnership in doing so.”

Under the agreement between Napleton and the village, the amount of property taxes Napleton pays will remain at their current levels for the next 20 years, even as the company makes improvements to the property that increase its value and would ordinarily increase the amount of property tax it paid.

Czerwinski said the village sees the project as an opportunity to revitalize one of the most visible intersections in Morton Grove.

“[Napleton] indicated that in cooperation with Honda corporate they were looking to consolidate the buildings into a new contemporary structure,” he said. “Right now there are three independent buildings on that site which have been there for decades and outlived their useful lives.”

Morton Grove Mayor Daniel DiMaria said the improvements to the dealership would be a boost to the future of the intersection and would complement the Sawmill Station development.

“The proposed dealership is just another step in the village’s plan to make the intersection of Dempster and Waukegan as vibrant and productive… as the enhancements which are occurring at Sawmill Station,” he said in a message to Chicago Tribune/Pioneer Press.

The incentive agreement allows for the village to reimburse Napleton for $3.8 million in property tax revenue over a 20-year period, plus up to $500,000 in sales tax revenue.

This kind of agreement is known as tax increment financing, in which property taxes in a given area are frozen at a particular level and future property tax revenue beyond that threshold is redirected to help pay for development for a set period of time.

In this case, the development is a car dealership that will cost a total of $18.8 million, according to a memo prepared by Czerwinski. The site is located within the Sawmill Station tax increment financing district, which Morton Grove officials approved in 2019 to redevelop what was once the Prairie View Shopping Center.

The memo states that the proposed dealership will be about 40,000 square feet, with 400 parking spots once complete. The village expects the project to create 60 construction jobs and 20 full- and part-time jobs, according to documents presented to village trustees.

Previous owners Castle Honda had not had any special taxing arrangements with the village, Czerwinski said.

“No taxpayer dollars support this redevelopment agreement,” Czerwinski told trustees at a Jan. 10 board meeting. “All funds generated will be within the Napleton development.”

During public comment, resident Bill Page asked if Morton Grove taxpayers wouldn’t somehow shoulder the weight of the frozen property taxes for the project.

“Doesn’t that mean they’re getting a tax break, and if it does, don’t we, the taxpayers, make up for it?” he said.

“Nothing is taken away from the schools, nothing is taken away from other taxing entities,” Czerwinski said. “But for the village getting involved and but for Napleton Honda being proactive, change would not occur and change is appropriate at this intersection.”

Napleton Honda Morton Grove President Chris Napleton wrote that the new facility “is being planned for better customer touchpoints, access and parking, and built for the future with current [electric vehicle] developments in mind,” he added.

He added that Napleton’s owner had a previous relationship with Castle Honda owner Tom Sondag and began discussing a purchase of the facility in June 2021, which was finalized Nov. 1, 2021.

Napleton said the pandemic had only a minimal impact on the purchase and takeover of the facility.

“We saw the dealership was full of long-term loyal employees with roots in the community and were confident in the long-term viability of the brand and the staff in place,” he said in an email to Pioneer Press.

Napleton added that the company anticipated building a new facility as part of its takeover of Castle Honda, which was built “in a time when the business had much different needs.”

“We felt consolidating in to one new ground up facility would be best for our staff, our customers, the community and Honda and are very excited to get started,” he wrote.

Two of the current three buildings will remain open and operational until the new building is done, Napleton said.

Trustees approved the ordinance authorizing the tax increment financing district in a 6-0 vote with no discussion.

The developer note, a document written by the village to the developer, articulates the terms of the sales tax revenue sharing and increment financing agreement. The village board was scheduled to vote on formal approval at the Jan. 24 board meeting.