Dixon City Council OKs $1.5M purchase of 65-acre property to be developed into commercial retail, housing

DIXON – The Dixon City Council approved an ordinance Monday to buy a $1.5 million, 65-acre property on Bloody Gulch Road behind Walmart on South Galena Avenue.

The plan is for it to be developed into additional commercial retail and housing in the future, but for now, it gives the city the opportunity to manage economic development and the ability to have land available for investors coming to the area.

In May 2023, three members of Dixon’s Economic Development Committee – City Manager Danny Langloss, Lee County Industrial Development Association President Tom Demmer and Discover Dixon Executive Director Amanda Wike – met with the Fulfs family, who owns that 65-acre property.

During the conversation, “they said we love what the city is doing; we want the city to be the owner of [this property],” Langloss said.

At the time, the property was on the market for $2.86 million.

“That just wasn’t in the cards for us,” he said.

The Fulfs agreed to sell the land to the city for $1.5 million with the condition that the city will equally split the proceeds from the land sale or a long-term lease agreement in excess of $1.5 million with the family, up to a total of $3.26 million to the Fulfs.

“This is far below the recent transactions in the area of land per acre,” Langloss said. “It’s a very good deal for the city.”

Although city officials expect to recover some money on the sale, “the property tax increment will be huge for this area,” Langloss said.

The land sits within the Fargo Creek tax increment financing 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 during a previous interview.

Without stacking grant funds, property tax deals within enterprise zones and the TIF districts, development never happens, he said.

“The development in the Fargo Creek and the Industrial Park TIFs will pay for themselves through the creation of new property tax over the next 20 years. Funding for the projects in the TIFs do not compete with funding for city road projects or capital expenses,” Langloss said.

The new land purchase echoes what the Gateway project and other developments along South Galena Avenue looked like two decades ago. Using a satellite image of that area from fall 2004, Demmer reminded the council Monday of how that area – now filled with multiple restaurants, gas stations and hotels – was once empty fields and farm land.

The city now 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 welcomed a Chipotle, Jersey Mike’s, a Casey’s gas station, T-Mobile and a nail salon.

A Fairfield Inn by Marriott and a child care center operated by the Dixon Family YMCA are on the way.

The economic development in that area has created new jobs, increased the city’s revenue from property and sales tax, and increased the number of visitors coming to Dixon, Demmer said.

“From an economic development perspective, I can’t stress enough how important it is when a developer comes to your community. One of the first things they ask is, ‘I need this amount of land, do you have it?’” he said.

Fortunately, Demmer noted, “we don’t have to cast about in the dark hoping that something comes our way. We have several discussions already underway.”

X-Site Real Estate – the developer for the Gateway Project on the other side of South Galena Avenue – is interested in the site, along with two senior housing developers and two workforce housing developers, Langloss said.

With the council’s unanimous approval of the purchase agreement, the council at its next meeting will vote on an interfund loan for the purchase that would take out the $1.5 million from the city’s general fund, community development fund or capital fund. The city then will repay that loan to itself using the future property tax earnings created by the new development in the TIF districts, Langloss said.

This kind of development “is not happening in other areas in our region,” City Council member Mike Venier said. “It’s exciting.”