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The agreement, originally made in 2010, included the following terms: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.