The Australian wealth management firm, Dixon Advisory, which for several years was a significant player in the Jersey City real estate market and a major supporter of Mayor Steven Fulop, has filed for bankruptcy.
A statement issued by the 35 year-old company explained that its directors had “determined that mounting and actual potential liabilities mean [Dixon] is likely to become insolvent at some future time.” The filing took place on January 16.
According to The Canberra Times, one of Dixon’s more speculative investments was a large portfolio of real estate in New Jersey and New York.
Dixon was also facing a class action lawsuit accusing the company of deceptive and misleading conduct and failing to act in the best interests of its clients. It had recently been hit with fines from the Australian government.
Dixon began investing heavily in Jersey City properties at approximately the same time mayor Fulop took office in 2013. Dixon’s business model was to purchase 1-4 family properties and renovate them with high-end finishes.
Former Downtown resident Mia Scanga remembers Dixon approaching her about selling her brownstone. “Most of the houses that were selling downtown were selling to Dixon. They were the number one buyer. They were the only game in town until 2015, 2016.”
In an investigative report on Dixon’s questionable business practices, the Australian Financial Review noted that Dixon had invested $475 million in Hudson County real estate, most of which was in Jersey City.
Upon taking office, the mayor immediately ingratiated himself with Dixon by cancelling the nearly completed revaluation of properties that threatened to raise taxes on many of Dixon’s buildings.
If Dixon and Downtown property owners benefited from the reval delay, it hurt the majority of Jersey City’s property owners. A former state auditor estimated that the mayor’s decision cost Wards A, B, C and D $143 million in excess property tax payments. In addition, the city was forced to shell out more than $4 million to hire a new property valuation firm and pay the attorneys fees of the firm whose contract had been breached by the mayor’s decision.
Scanga, an accountant and host of the local online show “Talking Politics,” didn’t mince words when asked why the mayor stopped the reval. “In my opinion, he was protecting Dixon,” she said.
The favor was soon returned. As a front runner to replace Chris Christie in the governor’s mansion, Dixon saw the ambitious mayor as a good horse to bet on. Dixon Advisory gave $300,000 to the mayor’s super PAC, Coalition for Progress. Dixon also made large contributions to the Hudson County Democratic Organization.
More favors followed. In 2015, the Fulop Administration was accused of going to Dixon’s aid by attempting to stop the process by which taxes are increased on newly renovated properties. Twenty-four Dixon properties would have been affected, and Dixon would have saved $84,219 in tax hikes on five such properties alone.
In a lengthy 2019 article that looked at Fulop’s relationship with Jersey City developers, Bloomberg.com catalogued the mayor’s other dealings with Dixon. For instance, Dixon renovated the mayor’s home and worked on his Rhode Island beach getaway. Dixon’s then-CEO, Alan Dixon, “frequently socialized with the mayor and his wife,” according to Bloomberg.
Last year, in a private deal, the mayor purchased a $2.4 million “trophy” property at 272 Ogden Ave. from Dixon. The house was never marketed to the public.
The mayor’s spokesperson did not respond to a request for comment.
Featured photo is of the rooftop pool on the 272 Ogden Ave. home purchased by Mayor Fulop from Dixon Advisory.