Nov. 5—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.

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

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.

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.