The Joliet City Council has signed off on a $1.5 million sales tax rebate for D’Arcy Volkswagen, an incentive tied to the business owner’s decision to buy and renovate the long-vacant Saturn car dealership on West Jefferson Avenue.

Under the deal, 50 percent of the city sales tax accrued by the new dealership will be rebated until the $1.5 million mark is reached.

The arrangement was part of the city’s negotiations with owner Terry D’Arcy last year, when he decided to purchase the property at 2861 W. Jefferson St. and sink $3.5 million into its renovation, City Manager Tom Thanas told the council Monday.

“The rebate is intended to help stimulate (D’Arcy’s) investment, taking what was a shuttered car dealership and putting it back to useful life,” Thanas said. “It also created several new jobs in the community.”

Previously, D’Arcy Volkswagen had shared space with D’Arcy Hyundai at 2521 W. Jefferson St. Terry D’Arcy also owns a Buick GMC dealership at 2022 Essington Road.

According to the development agreement, D’Arcy sells more than 400 Volkswagens every year, a trend that’s expected to continue “for the foreseeable future.” It also vehicle service and repair work and sells parts.

An added benefit from the deal, Thanas said, will be Terry D’Arcy’s assistance in helping persuade the Illinois Department of Transportation that a traffic signal is needed at the entrance of his business. The light would also help traffic get in and out of Inwood Athletic Club, located across the street at 3000 W. Jefferson.

The city’s currently talking to the officials with the Joliet Park District, which owns Inwood, about sharing the cost of that light and the road realignment work it will require, he said.

“The sales tax rebate is intended to help reimburse Terry for his portion (of the traffic signal expense) and some of the portions he’s (already) … picked up for the city of Joliet,” Thanas said.

IDOT does not currently support a traffic signal at that location, in part because it’s too close to the one at Infantry Road, Thanas said. However, he believes state officials can be persuaded of its need, he said.