Note
The home rule sales tax rate increased to 1.00% for Elmhurst sales tax.
City Lawsuit Against Lucky Motors
The City of Elmhurst is suing Lucky Motors, claiming the car dealership violated their shared sales tax rebate agreement.
- Date of lawsuit filing: February 11
- Amount sought by the city: $144,635 in tax rebates
Rebate Agreement Details
The agreement, originally made in 2010, included the following terms:
- Elmhurst returned 50% of the annual sales tax generated by Lucky Motors back to the dealership.
- The rebate was capped at $50,000 per year.
- The total rebate was limited to $500,000 over 10 years.
Relocation Clause
The agreement included a specific condition:
- If Lucky Motors relocated operations outside Elmhurst during the term, they would have to repay all or part of the rebates.
- If relocation occurred within the first five years, 100% repayment was required.
Alleged Relocation to Villa Park
In September, Lucky Motors allegedly moved its operations to a different location in Villa Park.
According to Chris Wright, one of the owners:
Business was slow, and consolidating to one site made sense.
- There was an expected sale of the Elmhurst building, but it did not happen.
- Lucky Motors still owns the Elmhurst property.
City’s Legal Response
In October, Elmhurst’s city attorney sent a letter requesting repayment of the $144,635 or else face legal action.
In response, Lucky Motors moved operations back to Elmhurst, Wright said.
“As far as we’re concerned, we have rectified it.” – Chris Wright
City’s Position on Repayment
City Manager James Grabowski disagrees that returning operations fixes the issue:
“The only way to rectify the alleged agreement violation is for Lucky Motors to repay the city the sales tax it had been rebated.”
- The city remains open to a settlement discussion.
- If unresolved, the matter will be settled by the courts.
“They owe us a lot of money. It will certainly be less than what they owe us.” – James Grabowski
Wright acknowledged that the amount is significant.
Frequently Asked Questions
What is the City of Elmhurst suing Lucky Motors for?
The City of Elmhurst is suing Lucky Motors for allegedly violating a sales tax rebate agreement by relocating its operations out of the city before the agreement’s terms allowed, triggering a repayment clause.
How much money is Elmhurst seeking from Lucky Motors?
Elmhurst is seeking $144,635 in sales tax rebates that were previously paid to Lucky Motors under their agreement.
What were the terms of the rebate agreement?
The agreement allowed Lucky Motors to receive 50% of annual sales tax revenues generated, with a cap of $50,000 per year and $500,000 total over ten years. It also required repayment if the dealership relocated within the first five years.
Did Lucky Motors actually relocate?
According to the city, Lucky Motors moved operations to Villa Park. However, the company claims it has since moved back to Elmhurst, which it believes resolves the issue.
What is the city’s stance on Lucky Motors returning to Elmhurst?
Elmhurst officials maintain that simply returning operations does not fix the breach. The city asserts that repayment is still required and is open to settlement discussions, otherwise the courts will decide.