The Homewood Village Board approved a budget amendment at the July 8 meeting to pay its share of the annual sales tax based on an agreement made to Ford of Homewood. 

In 2021 Steve Phillipos purchased the former Van Drunen Ford dealership at 3233 183rd St. and renamed it Ford of Homewood.

According to Amy Zukowski, Homewood director of finance, the budgeted amount to the dealership will be increased from $30,000 to $81,267, and will be provided by the general fund. 

The sales tax sharing agreement was originally approved by the board at the Feb. 22, 2022, meeting, Zukowski said. The village board had just created the Kedzie Gateway TIF but there were no TIF funds available. As a result, the Ford of Homewood incentives were initially designated to come from the village’s portion of dealership-generated sales tax. The village receives 1% of the State of Illinois collected sales tax – described as the “village portion” of sales tax.

As the Kedzie Gateway TIF account grows, the village will have the option to pay Ford of Homewood using TIF dollars, rather than money from sales tax sharing, Zukowski said.

With the  agreement, the village provided a $1 million incentive to be paid over 15 years. It started with the 90% to Ford of Homewood and 10% to the village in years one and two. Ford’s share then decreases by 10% every two years, ending at 20% in year 15. This will leave the village with 80% in year 15, she said. 

As part of the arrangement, the village will continue to receive 100% of the sales tax, also known as base sales tax, Zukowski said. 

Once the village receives its base sales tax amount of $149,192 (three-year average for Van Drunen Ford from 2018 to 2020), any remaining sales tax will be split with Ford as an incentive. The base amount was calculated from the village’s average sales revenue from the property before Phillipos acquired it, Zukowski said. 

Ford’s sales have increased about 70% in the past year, she said. 

“Phillipos is currently investing in the property through expansion of the facility and improvements to the property,” Zukowski said, adding, “Phillipos plans to continue to improve performance at the Ford dealership to make this store one of the best in the Midwest.” 

Zukowski says that the village will have the option to pay Ford’s remaining incentive payments out of the property tax increment instead of sales tax sharing once the Kedzie Avenue Gateway tax increment financing district accumulates from developments over the next few years.

Related story:

• Renovations making Ford of Homewood a state-of-the art facility (Jan. 27, 2025).