Here are O’Fallon’s ideas for developing land near the new I-64 exit

A recent study by a non-profit research institute suggests a swath of land near Scott Air Force Base originally intended for an intelligence agency campus could still be developed into a diverse business park.

There are two sections of land potentially available for development — one privately owned section to the north of Interstate 64 and one owned by the county just south of the interstate by the Air Force base, both roughly 1,500 acres in size.

The study by the Urban Land Institute of St. Louis examined what types of business would be appropriate for the northern section, which would be annexed by O’Fallon. It suggests light industrial operations, geospatial technology companies, and warehousing and distribution could eventually call the northern section home. The city paid $7,500 for the study.

The state of Illinois and local governments vied to attract the National Geospatial-Intelligence Agency in 2016 to the land near Scott Air Force Base, going so far as to build a dedicated interstate interchange. The agency eventually settled for a location in North St. Louis City.

Despite losing the bid, the potential of the real estate near the base and the brand new interchange mean the land is still “one of the most valuable assets in the area,” says O’Fallon Mayor Herb Roach. Bringing in new types of industry would also diversify and strengthen the local economy, which is mainly reliant on retail, restaurants and hotels. If there’s a downturn in one market, the mayor said, the other could pick up the slack.

The Exit 21 interchange opened last fall after nearly three years of construction, opening access to 1,500 acres of land to the north, and the Air Force base and MidAmerica Airport to the south.

The city plans to annex any land purchased by a developer, said O’Fallon City Administrator Walter Denton. The city will not annex any land until a developer buys it, he added, assuring current residents in the area that they will not be kicked out of their homes by eminent domain or be annexed involuntarily.

Most of the acreage remains farmland, both an advantage and a disadvantage to development — an advantage because there’s nothing to demolish, but a disadvantage because costly infrastructure needs to be built before businesses can go in.

The city of O’Fallon has already budgeted for the first round of infrastructure work by setting aside $500,000 in the 2018 budget for sewer installation on the western-most side of the property north of I-64. Those funds will come from a tax increment financing district in the area, according to the city administrator.

The western side of the property is the easiest and cheapest place to start building infrastructure, Denton said, because it’s closest to existing sewer infrastructure. The first sewer lines could be finished in 2019, Denton said, extending services to roughly 200 acres of land.

But the eastern side, with little infrastructure and plenty of land, will be more expensive to develop. It could cost upwards of $4.5 million to install sewer infrastructure along Rieder Road from near U.S. 50, the closest sewer line, according to Denton. That’s a number that could be reduced by grants and possibly shared by St. Clair County.

In addition to a lack of sewer infrastructure, the interstate exit to the north devolves into a narrow country road, Rieder Road, leading to a low, one-lane underpass. An inactive CSX railroad passes over Rieder Road there just south of U.S. 50.

If industrial businesses settled in the area, the city would have to either rebuild the underpass or re-direct Rieder Road around it to connect with U.S. 50 to the west. The second option, the mayor says, is the cheaper option unless the railroad company decides to help pay for a reconstructed underpass. That would be unlikely unless a company needed rail transport, possibly warranting reactivating the railroad, the city administrator said.

Another hurdle to development in the area is restrictions from the Air Force base and MidAmerica Airport, the study shows. Any business built in a flight path has to follow guidelines set by the Federal Aviation Administration. Restrictions dictate what kind of business is built, whether the land can be purchased or only leased, and how many people can work in the area.

But building near the Air Force base comes with its own unique benefits, the mayor added. Retirees from the Air Force are often specialized in a range of skills, and harnessing that talent could attract business.

“We need to build on those strengths at Scott Air Force Base and capitalize on the brain power on base,” Roach said.

While the study provides suggestions for how the area could be developed, it could all change depending on what kind of businesses choose to call it home, the mayor said. It could also be some time before residents even see any development begin, the city administrator added. It could take 15 or 20 years for the land to be even close to fully developed, Denton said.

“1,500 acres is a lot of ground,” Denton said. “But we need to take the first steps.”

The mayor said those first steps include planning for the future.

“If you’re not moving forward, you’re falling back,” Roach said. “This is about smart growth, smart development.”

The Urban Land Institute of St. Louis is a district council of the Urban Land Institute, a non-profit education and research organization supported by its members. Founded in 1936, the institute has nearly 40,000 members worldwide representing land use planning and real estate development disciplines working in private enterprise and public service.

This story was originally published February 5, 2018 at 7:09 AM with the headline "Here are O’Fallon’s ideas for developing land near the new I-64 exit."