Illinois town planning for $500M rail-served logistics center

Dive Brief:

The Jerseyville (Illinois) Economic Development Council announced on Friday that construction of a $500 million logistics center, which would be served by a rail line, could begin this summer, according to The Telegraph.
The 1,400-acre Mid-American International Gateway Business Park, which will have access to the Kansas City Southern Railroad (KCS), has been in the planning stages for four years and, in addition to its logistics capacity for offloading cargo to semi-trucks along the rail line, will include assembly and manufacturing businesses, according to the St. Louis Post-Dispatch. Atlanta-based Stonemont Financial Group, a partner in the development along with the council and KCS, is currently underway with environmental work on the proposed site and should complete it in May.
The completed park, which is on the edge of the St. Louis metro area, could generate up to 1,000 jobs and is expected to be a boon to the Midwest economy. Developers are applying for foreign trade zone status, which would allow foreign goods to be processed in and out of the facility without being subject to import duties while within the zone.

Dive Insight:

According to the Federal Railroad Administration, the U.S. freight rail industry is a $60 billion business and consists of 140,000 miles. Railroads like CSX and Union Pacific are integral in building rail-served industrial parks, offering guidance on site selection and the construction process, but land with access to these lines is, of course, finite.

John Porter, CEO of Capital Development Partners told The Atlanta Journal-Constitution that the opening of the larger lane through the Panama Canal was driving industrial park development near ports. This requires developers of projects like the one the company is planning near the Port of Savannah to dig deep into the local market in an effort to secure enough rail-adjacent property. Capital Development is planning a $125 million logistics center near Savannah, Georgia, with 2.3 million square feet of warehouse space.

Hunt Southwest Real Estate development is also planning to build a 300,000-square-foot cold storage facility with rail access in South Fort Worth, Texas, according to Bisnow. Once Hunt receives the building permit, construction of the food distribution center should take about nine months.

Construction of these facilities is just one aspect of the process, though. Oftentimes, developers must build a rail spur to the site, which, according to Union Pacific, can take 16 months or more depending on permitting time and whether the line will involve road crossings or the relocation of utilities.