By Anna Lothson
A legal dispute over a 2005 business retention agreement between the Village of Oak Park and the owners of the former car dealership Foley-Rice Cadillac has ended, and the settlement will put more than $500,000 back into the hands of the village government.
The original agreement was made in an attempt to keep the dealership in the village after the owners, under pressure from Detroit carmakers, said the dealership, located at 711 Madison St., would leave if it could not expand. The deal allowed Foley-Rice to lease village-owned lots on Madison for $1 per year, according to an October 2009 Wednesday Journal article. The village also contributed $400,000 in tax increment finance funds for the expansion.
The business retention agreement was set to expire in January 2017, but the dealership unexpectedly closed its doors in 2007 when General Motors terminated the franchise agreement. The owners failed to find another dealership to fill the space and instead started renting the property to a gym.
A lawsuit filed in October 2009 by the village claimed that decision broke the agreement by not fulfilling its financial obligations to the village. The lawsuit also claimed that, despite knowing the franchise agreement would not be renewed, the dealership still sold its property at 722 Madison to the village for $1.5 million.
The legal settlement will recoup the village's $400,000 investment, which was approved a week ago Monday by the village board, paving the way to end the three-year battle. In a follow-up interview, Village President David Pope said the village did not seek beyond what it was owed in the business retention agreement and legal fees.
Pending approval by a judge later this month, Foley Rice Inc. and Essex-Foley LLC will pay the village $350,000 by the end of the year and the remaining $50,000 is due in increments before the end of 2013. The village has also recovered $134,750 for its attorney fees.