St. Louis Business Journal - December 29, 2003
IN DEPTH: ECONOMIC DEVELOPMENT: ST. LOUIS 2004

Southwestern Illinois

International cargo, business parks give economic boost, while area awaits Scott's fate

Susan Kerth

A new Mississippi River bridge. The retention of Scott Air Force Base. The development of MidAmerica Airport into an international-cargo hub. Continued development on the Gateway Commerce Center and River's Edge business parks.

These are a few of the items on the 2004 "to do" lists of economic development experts in Southwestern Illinois.

New Mississippi River bridge

The construction of a new Mississippi River bridge represents Southwestern Illinois' top regional transportation priority, according to Jim Pennekamp, executive director of the Leadership Council Southwestern Illinois. "We're the only major metropolitan area in the United States with three interstates running over one bridge," Pennekamp said.

The main goal of the new span is to relieve congestion on the heavily traveled Poplar Street bridge. This would be achieved by rerouting Interstate 70 to the new bridge at a point just north of Gateway International Raceway in Madison.

The new bridge is estimated to cost $1.6 billion and will require significant funding from both state and federal sources. "It's a critical issue," Pennekamp said. "It's also one of the state's top priorities for federal funding." That's an important consideration, Pennekamp said, because projects that lack support at the state level have a harder time moving forward in Washington, D.C.

During 2004, efforts to push the bridge project further along will remain a top priority of the Leadership Council, Pennekamp said, noting that it's a multiyear project. Sen. Kit Bond and Rep. Jerry Costello are leading the effort to secure federal funding for the new bridge.

Scott Air Force Base retention

The U.S. Department of Defense will launch another round of military base realignment and closure in 2005. Scott Air Force Base, near Mascoutah, ranks as the largest employer in downstate Illinois; it generates an annual economic impact of more than $2 billion, affecting more than 100,000 people. "Southwestern Illinois is dependent on the retention of Scott Air Force Base for economic stability," Pennekamp said.

The defense department process to determine which bases will be cut is just beginning to heat up. In response, the Leadership Council is meeting with state officials and legislators, members of the governor's staff, and with the state's congressional delegation. Pennekamp said Gov. Blagojevich understands Scott's importance to Southwestern Illinois and remains supportive.

"We're working as a team, and we are certainly looking at Scott from the point of view of the work it does and the critical role it plays in our national defense," Pennekamp said.

Two factors may help Scott's retention possibilities when the 2005 base realignment and closure gets under way. First, the completion of MidAmerica St. Louis Airport with associated improvements to Scott Air Force Base has provided vastly improved landing facilities as well as new state-of-the-art military housing, Pennekamp said. In addition, the relocation of the 126th Air Refueling Wing from Chicago's O'Hare International Airport to Scott has further enhanced its position.

MidAmerica St. Louis Airport

Tim Cantwell, director of MidAmerica St. Louis Airport in Mascoutah is bullish on MidAmerica's potential to become an international-cargo hub airport for the entire nation. During 2004, Cantwell and the St. Louis Regional Chamber and Growth Association (RCGA) will be working together to pursue cargo opportunities.

MidAmerica's designation in October as a Foreign Trade Zone and the 50,000-square-foot cargo facility under construction there represent two important steps toward that goal. "The Foreign Trade Zone designation gives you some tax duty abatement or negatement," Cantwell said. "That's a key factor for international cargo carriers that might be considering a relationship with MidAmerica."

When the cargo facility is completed next October, MidAmerica will be in a position to handle one 747-size planeload of cargo each day. "In terms of pounds," Cantwell said, "that works out to 350,000 pounds of product a day. That'll max us out in terms of the cargo facility that's being built."

Commercial developments

Southwestern Illinois is in the midst of a transition period when it comes to employment -- from manufacturing, to services that support manufacturing. Two commercial parks being developed -- the 2,300-acre Gateway Commerce Center in Madison County, and the 852-acre River's Edge at the old Charles Melvin Price Support Center in Granite City -- are evidence of this shift.Major investments continue at Gateway, which is being developed by TRiSTAR Business Communities. In May, Hershey Foods Corp. announced plans to build a $65 million, 1.1 million-square-foot distribution facility on 90 acres of land at Gateway. When completed, the new Hershey facility will employ more than 200 people. Other tenants in Gateway include UniLever, Dial Corp. and Procter & Gamble. To date, more than $125 million has been invested at Gateway; when completed, total buildout at the development is estimated to be more than 25 million square feet.

The River's Edge development is being reborn as a $52 million mixed-use business park. The site, which is being developed by the Tri-City Regional Port District, is projected to generate more than 1,000 jobs in the next 10 years. Currently, the development includes military housing, a renovated golf course and clubhouse, and almost 1 million square feet of warehouse space. The Granite City YMCA also has a new facility under construction at River's Edge.

In October, 500 acres at River's Edge and 2,250 acres at Gateway were approved as Foreign Trade Zones -- areas in which U.S. Customs import/export procedures and tax duty abatement are permitted to ease handling of shipments in the least restrictive environment.