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IL

The city of Springfield is offering a new tax incentive to get businesses to annex into the city from the county.

In exchange for annexing into the city, Motorheads Bar & Grill, 600 Toronto Road, will receive sales tax rebates of up to $25,000, which will offset the $48,000 cost of setting up a water line.

It's the first time the city has used a sales tax rebate for annexations. The deal could be voted on by the Springfield City Council as soon as next Tuesday.

Mayor Jim Langfelder said Motorheads was an ideal addition to the city because it would likely bring more sales tax into the city than what the city initially invests with the rebate.

"Motorheads is going to be a great attraction along Route 66," Langfelder said.

Of the 8.5 percent sales tax Springfield residents pay, 2.25 percent of the rate is levied by the city. Under the rebate, 0.75 percent of whatever local sales tax Motorheads generates will be returned. The cap for the return is $25,000. On July 1, the local sales tax rate goes up to 2.5 percent.

Motorheads, which opened its bar Friday and will open its kitchen within the next month, has been "pre-annexed" into the city, according to owner Ron Metzger. Last week, crews came out and put in a 10-inch main to connect the business to city's water supply. Metzger paid the $48,000 upfront.

Metzger said the lack of water pressure for an indoor sprinkler system had actually pushed back his opening date. He was preparing to buy big tanks to put in the ground to pump up well water when he was approached by Langfelder about annexing. The cost of the tanks was less than $48,000, and Metzger said he had been content staying in Sangamon County.

He called the incentive "pro-business."

"Without the incentives, I probably would not go into the city," Metzger said.

Not only does the restaurant show off racing memorabilia and classic cars, it also celebrates Springfield history. A museum and gift shop, which is next door to the restaurant and is yet to be opened, has artifacts from Springfield's past, from business signs to a telephone booth that used to sit at the Old State Capitol. The bar is papered in photos from past Springfield businesses like Aloha Tavern and Tops Restaurant.

"Everything in here is Springfield," Metzger said. "I'm big on Springfield anything."

The city is also using a sales tax rebate to encourage businesses to open in Springfield. It offered a sales tax rebate to LS Building Products to open a lumberyard in 3400 block of Lumber Lane. The cap for the rebate is about $1.2 million, about one-third of the $3.6 million cost for the company to refurbish the old Boss Manufacturing distribution facility into a lumberyard. The first $3 million in sales is excluded from the rebate. The city council will vote on a date for a public hearing about the LS Building Products sales tax rebate during its Tuesday city council meeting.

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