Dixon OKs funding for $1.5M purchase of 65-acre property to be developed into retail, housing behind Walmart

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 which is planned to be developed into additional commercial retail and housing in the future.

DIXON — The Dixon City Council approved a $1.5 million inter-fund loan Monday for the purchase of 65 acres of property off Bloody Gulch Road behind Walmart on South Galena Avenue.

The council at its Oct. 21 meeting approved the purchase of the property with the plan for it to be developed into additional commercial retail and housing. On Monday, the council approved the use of $1 million from the general fund and $500,000 from the community development fund to actually buy it.

According to Finance Director Becky Leslie, both funds are able to sustain the loan.

The community development fund currently has about a $1.8 million balance, which will drop down to about $1.3 million, but “at this time, we don’t have a lot of huge expenditures,” Leslie said.

The general fund “has been very healthy” and can remain financially stable for the time being, she said.

The city plans to reimburse those funds using the future property tax earnings created by new development in the tax increment financing districts, City Manager Danny Langloss said at the Oct. 21 meeting.

The land sits within the Fargo Creek TIF district, which encompasses about 619 acres from First Street up to Interstate 88. 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.

“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,” Langloss said. “Funding for the projects in the TIFs do not compete with funding for city road projects or capital expenses.”

By purchasing the property now, it gives the city the opportunity to manage economic development and the ability to have land available for investors coming to the area.

“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?’” Lee County Industrial Development Association President Tom Demmer said.

The concept of having land available is part of what’s led to the success of the Gateway project and other developments along South Galena Avenue, he said.

A graphic shown at Monday's Dixon City Council meeting displays the large amount of development completed along South Galena Avenue near Interstate 88 with the approved new 65-acre property purchase agreement marked by "future development" in yellow.

Back in 2004 that area – now filled with multiple restaurants, gas stations and hotels – was once empty fields and farmland. The city now expects the entire development 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.

As for the new property’s development, 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 Gateway project developer – is interested in the site, along with two senior housing developers and two workforce housing developers, Langloss said.

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Payton Felix

Payton Felix

Payton Felix reports on local news in the Sauk Valley for the Shaw Local News Network. She received her Bachelor of Arts in English from the University of Illinois at Chicago in May of 2023.