Interstate 39 stretches over 300 miles, from Normal, Illinois to just outside Wausau in Wisconsin, skirting along the western edge of the Chicago metropolitan area. Depending on where you travel, the interstate has a variety of characteristics. And at the intersection of I-39 and I-80, a unique climate exists, ripe for new development.
One defining feature for this part of I-39, in what is called the North Central Illinois region, is the multi-modal logistical access via rail, interstate, river and airports. For commercial real estate development, this variety of transportation proves vital.
“The more varied, multi-modal opportunities you have available, it just opens doors for more projects,” said Ivan Baker, president and CEO of North Central Illinois Economic Development Corporation. “You’re able to meet the demands of more companies.”
The region comprises portions of La Salle, Bureau and Putnam Counties. Ottawa is the largest municipality in the area with a little over 18,000 residents, but the whole micropolitan statistical area—a concept that the U.S. Census developed in 2003 to highlight these unique labor markets—numbers more than 150,000. In fact, the North Central Illinois region is the fourth largest micropolitan statistical area in the country.
Around 7,000 companies currently call the area home and more have shown interest lately, attracted in part by the multi-modal options. “The vast majority of companies that are looking at the area and the companies that are already here take advantage of our great highways, our quick access to Chicago and our great railroads,” Baker said. “It’s the combination that makes the difference.”
The region has its own labor market and is a connection to others, notably Chicago and its submarkets. The CenterPoint Intermodal Center in Joliet—the largest master-planned inland port in North America—is a few miles east on I-80 and additional intermodal facilities in Rochelle are a few miles north on I-39.
The myriad transportation options and proximity to the huge Chicago market make logistics an important part of the economic viability of the North Central Illinois region. “We are proud of being close to Chicago and we want to promote that in every way possible,” Baker said. “There is a lot of connection with labor, with transportation, with logistics—the entire real estate market is really beneficial because we are connected.”
But the region has a certain level of autonomy, despite the gigantic market next door. “Chicago is the capital of the Midwest. It is a huge market and we want to have that connection,” Baker said. “We certainly have some inter-dependence and inter-relationship [with Chicago], which is important, but there is also a sustainability in North Central Illinois that gives us more strength because we’re certainly an economy that does stand on its own.”
While e-commerce drives warehouse development elsewhere, here the sectors are more varied, with agribusiness, food processing and manufacturing driving much of the local economy. The large number of mid-sized firms, employing between 100 and 500 workers, also help to stabilize the labor market.
“We don’t have one or two companies that are our overriding large employers,” said Baker. “We don’t have a dependence on any one particular sector or industry and that diversity gives us strength.”
According to Mark Janko, CCIM, SIOR broker and owner, Janko Realty & Development, transactions and new development crawled to a halt in 2008. But lately, there have been more signs of activity.
“We’ve had some small public warehouses and other buildings listed for quite a few years,” said Janko. “We don’t have a whole lot of inventory here to begin with, but in the last year we’re seeing the small warehouses picking up and seeing some industrial picking up.”
A residential and commercial firm based in Peru, Illinois, Janko Realty has around 1,000 acres of land under contract in the area, mostly in nearby Oglesby. According to Janko, he recently received his first build-to-suit inquiry since the recession. “We don’t know who will be in the second bidding, but it’s nice to have something like that happen,” he said.
There are a number of features that make North Central Illinois attractive to companies. “It’s a very business-friendly environment. With the junior college down there they have the ability to train if we find a manufacturer or someone that needs highly skilled workers,” said Adam Haefner, director of brokerage services at Elmhurst, Illinois-based Darwin Realty.
Other economic development trends include lower taxes, more stable government and clear incentive policies from communities that aggressively vie for corporate relocations and expansions with tools such as tax increment financing districts. “They also have their own power company, which potentially can make them more competitive than buying power from ComEd or one of the larger providers,” Haefner said.
Janko Realty and Darwin Realty have partnered on a site in Peru that is ideal for an industrial development and representative of the opportunities present in the region. The 98-acre site, on Plank Road just north of I-80, features nearly three-quarters of a mile of frontage on the BNSF Railway, as well as outstanding interstate proximity. The site’s location keeps it clear of congested areas to the east while providing interstate access across the U.S.
“What’s nice working with Adam is we’re the local guys, we know all the local politics and we know everybody in town and Adam has the nationwide experience,” Janko said. “I think it’s a good partnership.”
For North Central Illinois, the dynamic communities and multimodal logistics make the region an attractive destination for new development.
“We’re not unrealistic. We know where we are,” Baker said. “But, we know the opportunities are here and we’re willing to make up for that. As long as we keep having great transportation and great opportunities for logistics and manufacturing, we know that we can make the numbers work and provide an opportunity for lower taxes, a great available workforce and an attractive cost of living. If we can make those number work, we know that we can compete.”