OGDEN -- The city administration wants to create a redevelopment area to provide tax increment to John Watson Chevrolet as an incentive for the construction of a new $3 million showroom.
The proposal calls for the dealership, located at 3535 Wall Ave., to receive $10,000 to $20,000 in tax increment annually for 10 years, said Tom Christopoulos, the city's deputy director of community and economic development.
The exact amount of tax increment provided to John Watson Chevrolet would depend on the property tax generated by the new showroom, Christopoulos said.
Tax increment financing is a tool that captures projected property tax revenue created by a development and then allows those funds to be invested for improvements associated with the project.
The boundaries for the proposed RDA would encompass John Watson Chevrolet and Westland Hyundai at 3333 Wall Ave., Christopoulos said.
Westland Hyundai could also be eligible for tax increment if it expands.
The creation of the new RDA will have to be approved by the Ogden Redevelopment Agency and by six of the eight members of the Ogden City Redevelopment Agency Taxing Entity Committee. The taxing entity committee includes representatives from the city, Weber County, Weber School District, the state Board of Education and smaller taxing entities.
The proposal for the RDA may be submitted to Ogden's redevelopment agency and taxing entity committee early next year, Christopoulos said.
The creation of the RDA would serve as an incentive so John Watson Chevrolet and Westland Hyundai will improve their properties and remain in Ogden instead of relocating to neighboring South Ogden and Riverdale, which aggressively recruit car dealerships, Christopoulos said.
Car purchases are important to Ogden's economy, he added.
In fiscal 2011, the eight largest car dealerships in Ogden generated about $700,000 in sales tax revenue, said city Treasurer Mike Goodwin. That amount made up about 6 percent of the city's overall sales tax base.
John Watson, owner of John Watson Chevrolet, said he appreciates efforts by the administration to create the new RDA, adding that he's committed to keeping his dealership in Ogden.
"I love Ogden and believe in Ogden," he said.
Watson said he will begin in the next few weeks to tear down the dealership's existing showroom, which opened in 1968.
A new 25,000-square-foot showroom is expected to open next summer. The showroom will house new automobiles and sales offices, a parts department and a car delivery area.
During construction, John Watson Chevrolet will house new vehicles at its used-car operation north of the new-car dealership. The parts and service department will remain open at its current location for the duration of the project.