Dixon council approves tax rebate agreement for new car wash in Gateway development

DIXON – The developer of a new $4.9 million car wash under construction in the Interstate 88 corridor in Dixon will get half of its property taxes rebated for six years under an economic incentive agreement approved Monday by the Dixon City Council.

Water Castle Car Wash, located at 1661 S. Galena Ave., is one of the many new additions within Dixon’s Gateway project, the 27-acre commercial real estate site between Keul and Bloody Gulch roads that broke ground in 2022.

Under the agreement, the city will reimburse the developer, Dan Sigward of Dixon 1661 Real Estate LLC, an amount equal to half of the car wash’s yearly property tax. The rebate begins after the car wash has been up and running for a year and lasts for a period of six years, City Manager Danny Langloss said in an interview.

This tax rebate is one of the benefits that Sigward chose to pursue as the car wash is being constructed within the Lee-Ogle County Enterprise Zone. Businesses located within the zone are eligible for certain tax incentives, such as sales tax exemptions and property tax abatements, Langloss said.

The zone was designed through the Illinois Enterprise Zone Program to stimulate economic growth by offering certain benefits to potential developers.

“If a developer [in the Gateway development] says they would like to take advantage of the enterprise [benefits], we do that. Anything that the enterprise zone allows, we do,” Langloss said.

According to the agreement, the developer also is solely responsible for all of the costs to construct and open the car wash, which is estimated to be about $4.9 million.

Water Castle Car Wash opened its first location in Freeport in 2020. The newest location in Dixon broke ground June 11 and is expected to be open Dec. 15, Langloss said.

Once construction is completed, it will cover 5,700 square feet. It will employ two full- and eight part-time employees, Public Works Director Matt Heckman told the council Monday.

The terms laid out in the agreement with the car wash echo the agreements previously made with other businesses in the Gateway project, such as Casey’s and Jersey Mike’s, Heckman said.

In total, the Gateway project cost the city $5.6 million in infrastructure. The city received about $3 million in grant funding, and the remaining $2 million will be paid for using the area’s tax increment financing district, Langloss said.

Gateway sits within the Fargo Creek TIF district. A TIF district is an economic development tool that allows municipalities to set aside property tax revenue created by any new property value in the district’s boundaries and use it to fund economic development agreements, infrastructure improvements and other initiatives.

“TIFs are a powerful economic growth provider for municipalities. ... It provides incentives on behalf of the city without having an impact on the taxpayers,” Langloss said.

Without stacking grant funds, property tax deals within the enterprise zone and the TIF districts, development never happens, Langloss said. Without it, the Gateway project wouldn’t be possible, he said.

The city expects the entire Gateway project to create more than 600 jobs and $1 million a year in new tax revenue once it’s completed. So far, the development has opened a Chipotle, Jersey Mike’s and a Casey’s gas station. T-Mobile, a nail salon, a Fairfield Inn by Marriott and a child care center operated by the Dixon Family YMCA are on the way.