Concentric Development Spurs Overall Metro Economy

From the near-city town of Alsip nearly down to Kankakee and up to Wisconsin, a wave of new distribution facilities is blanketing the Chicago region, simultaneously taking advantage of municipal proximity and peripheral speed.
        In Alsip, wire and cable distributor Anixter International is taking advantage of the market to occupy 467,701 sq. ft. (43,449 sq. m.) in a build-to-suit that's part of the 50-acre (20.2-hectare) Prologis Park 294, nearly equaling the amount of space the company leases from Prologis in eight other cities. That speaks volumes about the volume going through its Chicago hometown. The new facility actually will be slightly smaller than the company's former facility, located nearby.
        "Our existing facility's layout is relatively inefficient due to many years of expanding a former multiple-tenant building," said Robert Grubbs, Anixter president and CEO. "When this new facility is combined with the investments we have made in recent years in warehouse management systems and automation, we will be in a position to offer better-than-ever service levels for our customers."
        If the forecast of the Chicago Area Transportation Study is accurate, intermodal activity – which grew by some 6 percent in the region in the late 1990s – could grow by as much as 150 percent in the next 20 years, and require some 7,000 acres [2,833 hectares] of land for facility development. Already pulling its weight is the ever-expanding project list of CenterPoint Properties Trust. The firm's 2,000-acre (809-hectare) intermodal center in Joliet and other individual projects are effectively determining the future freight infrastructure of the region.
        The company's resume includes intermodal centers for both BNSF and Union Pacific, and its own projects have spurred proximal projects from companies like DSC Logistics, Erie Foods International, DP Partners and Rayovac. Such development has even spawned new projects where those companies have abandoned sites: the 120-acre (48.6-hectare) former BNSF railyard in Naperville, also owned by CenterPoint, has already been redeveloped into a mixed-use industrial and retail park.
        For Caterpillar Corp., CenterPoint recently entered into a 50-year sale-leaseback pact that covers some 1.5 million sq. ft. (139,350 sq. m.).
        "Over the next two to five years, they'll give up half a million square feet [46,450 sq. m.] a year, consolidate, and they're doing about a $100-million modernization program," says CenterPoint's Mullen. "We're hoping to take older facilities as they vacate them, and possibly build new facilities for CAT suppliers."
        CenterPoint worked with Ford Motor Co. on a similar strategy, with pleasing results for the auto maker in its new South Side Chicago campus.
        "Maybe they can save on transportation costs like Ford did," says Mullen of the Caterpillar deal. "With bulldozers, hydraulic systems, dealing with steel and pneumatic equipment, it might make sense to have some suppliers right next door."
        The peripheral logistics development has even extended its influence to where some companies put their headquarters. At the new Crossroads Business Center in Plainfield, also in the thriving Will County, longtime Chicago corporate denizen Flexi-Mat, which has resided at seven different center city locations since its founding in 1948, is building a 150,000-sq.-ft. (13,935-sq.-m.) corporate headquarters and manufacturing building. The company got its start making anti-fatigue floor mats for industrial users, barbers and beauticians, but now is wholly dedicated to a complete line of pet bedding products distributed around the world. Flexi-Mat also operates a distribution center in Chicago and a manufacturing and distribution center in Brownsville, Texas.

Gateway Gets FTZ Status The 2,300-acre (931-hectare) Gateway Commerce Center in Madison County, Ill., across the Mississippi River from St. Louis, was added to the foreign trade zone of the Tri-City Regional Port District in November 2003. The attainment of this status had been sought since October 2002, when Gateway developer TRiSTAR Business Communities had formed a joint venture for that purpose with New York-based Rockefeller Group Development Corp. (RGDC).         The newest facility on the Gateway property is a $65-million distribution center for Hershey Foods, expected to be complete in spring 2004, that brings the park's total developed space to some 5.8 million sq. ft. (538,820 sq. m.). Hershey joins corporate tenants like Dial Corp., Ford Motor Co. and Procter & Gamble.         "We are very impressed with the growth Gateway has achieved in a short period of time and the quality of the companies choosing to locate there," says Eugene Preston, vice president of development and marketing for RGDC. "It is clearly one of the premier distribution parks in the entire U.S."

        In nearby Romeoville, also in Will County, ORIX Real Estate Equities and REIT RREEF are constructing the Windgate Distribution Center, on 33 acres (13.4 hectares) at the Windham Lakes Business Park.
        Perhaps it comes as no surprise that property tax revenues in Will County, which assessed more than 10,000 new parcels in 2001, went up by more than $5 million, or nearly 8 percent, between 2002 and 2003. The companies keep right on coming, welcomed by open arms and open land.
        In Geneva, Power Packaging, a division of Chicago-based The Power Group, added a new rail depot and distribution section in the 73,000-sq.-ft. (6,782-sq.-m.) expansion of their food packaging plant. The division operates three of its eight plants in Illinois. The work performed by McShane Construction Corp. included the installation of six insulated silos for consumable products directly connected to the rail depot, which supports up to 12 cars on two new rail spurs.
        Traveling further around the Chicago circle brings the corporate site seeker to Huntley, near I-90 and state highway 47, where Palatine-based Weber-Stephens Products Co., maker of Weber grills, is adding 173,000 sq. ft. (16,072 sq. m.) to its distribution center, bringing its total footprint to some 626,360 sq. ft. (58,189 sq. m.) on the 33-acre (13.4-hectare) site. The expansion, being performed by Cord Construction, is the company's second in five years, having added 147,000 sq. ft. (13,656 sq. m.) in 1999.
        Besides Centerpoint, Island City industrial park, outside Wilmington, offers 1,100 acres (445 hectares) of its own, and is being targeted for manufacturing activity that would complement the already unfolding distribution activity nearby. And The Alter Group is investing $100 million to develop a 200-acre (81-hectare) distribution park in Rochelle, 80 miles (129 km.) west of Chicago and immediately north of the 1,200-acre (486-hectare), $181-million Union Pacific Global 3 Intermodal Terminal & Reload Center.