TUESDAY, OCTOBER 21, 2008
Trumpeting a new industrial park
by Paula Widholm
Chicago -> Lake
The joint venture of Panattoni Development Co. and Prudential is developing a 150,000-sq-ft spec building that kicks off Phase Two of its Trumpet Corporate Park at Russell and Green Bay roads in Zion, Ill.
The venture's master plan for the 220 net acres of former farmland calls for a total of 2.2 million sq ft of industrial buildings. One building could total 1.2 million sq ft and would be served by the Union Pacific rail line. Depending on the types of buildings to come, the total investment in Trumpet Corporate Park could be $150 million to $200 million.
Throughout Phase One's past two years, Panattoni has been working with the City of Zion in a public private partnership for the land assemblage. The developer has also been installing infrastructure at the south end of the park, where Fed Ex opened its 65,000-sq-ft regional distribution center on 23 acres there late last year.
Stop the exodus
In 2008, five industrial tenants have leased spaces greater than 100,000 sq ft in Southeast Wisconsin, accounting for 1.6 million sq ft of transactions, according to Colliers Bennett & Kahnweiler's mid-year industrial report. Top transactions north of the border this year included two Pleasant Prairie, Wis., deals: Arvato Digital Services leased 534,384 sq ft, and Coleman Cable System leased 502,033 sq ft. Also this year, SC Johnson Wax chose Sturtevant, Wis., for its 432,000-sq-ft BTS lease.
The park "is the last line of defense before defection into Wisconsin," said Mike Prost, principal of Lee & Associates. He and Rick Delisle, also a principal at Lee & Associates, are the marketing agents for Trumpet Corporate Park. "We feel Trumpet gives corporations a viable option to stay in Illinois."
Jason Rosenberg, senior development manager for Panattoni, also noted that many deals went to Wisconsin because there weren't options south of the border.
"The number of larger user deals shot up in Southern Wisconsin, and Lake County missed out on some of those deals because there's not a plethora of sites to accommodate large users," Rosenberg said.
He added, "Wisconsin was able to grab Illinois business because there were not a lot of alternatives for users with heavy distribution loads. A lot of municipalities frown on heavy distribution use. This park was one of the concepts of the City of Zion to stem the exodus of companies out of Illinois."
The City of Zion and its advisors also look to the park as a way to replace jobs and real estate taxes lost with the closing of the Zion nuclear plant, Rosenberg added.
Also, to help curb the export of Illinois jobs to neighboring states, the state of Illinois, through its Economic Development for a Growing Economy (EDGE) program, provides a tax credit for job creation and/or retention projects. Tax credits can amount to as much as the income taxes paid by the newly hired and/or retained employees. These tax credits are available for up to 10 years for each project.
Historically, industrial users in the Lake County, Southeast Wisconsin submarkets have been pharmaceutical companies and some consumer product companies that look at the area as a regional hub to serve Illinois, Wisconsin and Minnesota.
"There's a good manufacturing base in the area as well," Rosenberg noted. "There is competitive product in Wisconsin, but it comes down to geographic presence, labor, incentives or a loyalty to Illinois."
Last year, Panatonni sold a large portfolio of properties including many in the I-55 Corridor, and Rosenberg said he's "much happier to be in north I-294 Corridor."
"We've got some infill projects in Des Plaines, Lincolnshire and Roselle," Rosenberg added. "We're lucky to get those sites given the state of economy. We're happy with those positions, and we look at Lake County as an infill location."
Trumpet Corporate Park
"We saw this park as having all the critical characteristics," Rosenberg said. "It has direct access to I-94 via a full four-way interchange at Russell Road; it's a land-constrained marketplace in Lake County, and it has the willingness of the local community to have industrial."
Other perks of the park include direct rail via Union Pacific, a great labor pool in Waukegan, Zion and Gurnee, and the park is also close to executive housing in Lake Forest. A mile of roadway, also under construction, will connect to Russell Road.
A green approach is being taken as well. Of the 30 acres of wetlands on site, only about half an acre is being disturbed.
The first spec building at the park, a 150,000-sq-ft flex distribution center with 30-ft clear ceilings, is slated to be complete by the first quarter of 2009. The building, which may become LEED certified, could be a three- to four-tenant building, but "the majority of users happen to be whole building users," Rosenberg said. "But it could go either way. We would be willing to sell the building as well."
Rosenberg also noted that the park is well capitalized with Prudential as an equity partner as well as JP Morgan Chase as the lender.
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