Gateway groundwork gets going in Dixon

DIXON – Work is underway to develop 27 acres in the Interstate 88 corridor to bring a new hotel, gas station, restaurants and shops as part of the Gateway Project.

The project, along South Galena Avenue across from Walmart between Keul and Bloody Gulch roads, has plans to include the construction of a dozen buildings.

Officials had a groundbreaking ceremony a month ago, site work to level the ground recently started, and a yet-to-be-named hotel will likely break ground in July as well as the other buildings this summer.

It’s being developed by Xsite Real Estate of Burr Ridge and Walsh Partners of Elmhurst. Xsite is the developer of Presidential Parkway Plaza, the four-building project north of Walmart along the south side of Keul Road. The city, the Lee County Industrial Development Association and Sauk Valley Bank are also partners in the project.

The city will be committing about $4 million in infrastructure work for the project, and $3 million of that will be paid for by grants. The city expects to begin infrastructure work for a road and other improvements in mid- to late-July.

State Rep. Tom Demmer, R-Dixon, and state Sen. Brian Stewart, R-Freeport, are both securing $1 million capital grants for city infrastructure.

Mayor Li Arellano Jr. signed paperwork for Stewart’s grant last week.

“It’s certainly great to see work underway,” Arellano said.

The project is more than 3 years in the making after working with developers, landowners, and state and local government officials, Arellano said.

In 2020, the city won a $1 million grant from the Opportunity Zone program for the work along with a $1 million local match, which will come from one of two new tax increment financing districts the city created that includes the Gateway footprint.

Gateway is expected to create more than 600 jobs and $1 million a year in new tax revenue.

The city has long sought after opportunities to open up further development in south Dixon.

In October, the City Council approved annexation agreements across 657 acres – including land for the Gateway Project – after years of working with landowners and developers to open up new opportunities in the area.

The Gateway Project will be in the recently established Fargo Creek TIF, which has boundaries roughly covering First Street to the north, Peoria and Chicago avenues to the east, I-88 to the south, and Depot Avenue and Pump Factory Road to the west. The other is the Industrial Park TIF south of I-88, between South Galena Avenue and U.S. Route 52.