Potential development for the O’Fallon area around Interstate 64’s Exit 21, Rieder Road, has taken a big leap forward with a proposal for large warehouse and office buildings for industrial, logistics and light manufacturing uses.
TriStar Properties, which developed the distribution park Gateway Commerce Center in Pontoon Beach and Edwardsville, is interested in more than 200 acres north of the interstate, on the northwest corner of Exit 21.
Mayor Herb Roach said early conceptual plans call for more than 1.5 million square feet of construction in Phase 1.
“It has the possibility of creating additional development in the area’s remaining 1,300 acres,” Roach said.
This area in the city limits is proposed as Mid America Commerce Center, is east of Illinois 158 and adjacent to the Rieder Road interchange. It is across from Scott Air Force Base and MidAmerica St. Louis Airport.
During the past few months, city staff and officials have been working with land owners, other taxing bodies and a developer to clear all hurdles so that development and economic incentives could happen.
The next steps would include construction of the sewer system to service the area, which the city will do, said Grant Litteken, assistant city administrator.
“We will be working closely with the developer to design a master plan for the area, and next, a site plan and construction approval,” Litteken said.
The mayor said running the sewer line down Rieder Road will immediately open up 1,500 acres for development.
If everything goes to plan, the first construction could take place sometime this year, Roach said.
“We believe that the time to capitalize is now,” Roach said. “The development of this began in earnest after we received a very positive recommendation from the (Urban) Land Institute when they did their study of the area for us a little over a year ago.”
The study looked at what types of businesses would be ideal for the available land and how the city could market the land to developers.
“This type of development can positively alter the future of the O’Fallon community, like other major projects like St. Elizabeth’s Hospital, Scott Air Force Base, and construction of the interstate,” he said.
Creating jobs so O’Fallon residents wouldn’t have to travel elsewhere is another consideration.
“In addition to the large amount of jobs and economic impact that this development could create, it has the potential to generate a large amount of property tax for our school districts. It would also diversify O’Fallon’s economy, which will help make the community stable even through the toughest of economic times,” Roach said.
Known as a model of success for industrial development, Madison County’s Gateway Commerce Center includes such major employers as Amazon, Proctor and Gamble, Walgreens, Hershey’s, Unilever, Dial, Save-A-Lot and World-Wide Technologies. Started in 1998, nearly 6,000 people work there.
It generates $6 million in property tax for schools and other taxing bodies, and it has an economic impact of more than $1.3 billion. In addition, it generates approximately $6 million in property tax for the area’s school districts and other taxing bodies.
Preliminary scenarios calculate TriStar’s phase one development could generate more than $5 million in property tax for O’Fallon’s school districts over a 20-year period, Roach said.
This type of property tax generation could help the O’Fallon taxing bodies be less reliant on residential property tax, Roach added.
“If there is industrial or commercial development that is generating millions of dollars per year in property tax, that’s millions of dollars that the residential taxpayers of O’Fallon don’t have to pay,” Roach explained.
The project would not only benefit O’Fallon but other taxing bodies as well.
Recently, the O’Fallon school districts, city, St. Clair County and O’Fallon Township formed a partnership to help make this area competitive on a national scale, creating a property tax incentive program that will help attract long-term investment and job creation to the area.
The council recently approved an amendment to the Mid-America Enterprise Zone allowing for a 10-year property tax abatement within the boundaries of the zone that includes portions of O’Fallon, Shiloh, Lebanon, Mascoutah, and unincorporated St. Clair County.
The tax abatement is voluntary for taxing districts to approve for their specific tax levies, so each taxing district must approve this abatement separately. School District 90 approved it March 19 and School District 203 approved it March 21.
An Enterprise Zone is a state program that provides incentives to commercial and industrial users for job creation and investment.
The incentives would allow the Mid America Commerce Center to be competitive with other developments in the St. Louis region and surrounding trade areas, including Chicago, Kansas City, Nashville and Indianapolis.
At Monday’s City Council meeting, aldermen were expected to authorize the mayor to sign an intergovernmental agreement with School Districts 90 and 203 for the Mid-America Enterprise Zone.
Tax abatements will be in areas not previously in the city limits, so the abatements will be minimal to the city property tax revenues. In the long term, new developments will significantly increase EAV (estimated assessed valuation) and property tax revenues.
Roach said he is appreciative they share O’Fallon’s vision.
Leveraging on the growth of Interstate 64 and the HSHS-St. Elizabeth’s Medical Campus, along with the continual growth of Scott Air Force Base, has galvanized O’Fallon’s future for the good, he said.
“O’Fallon has been fortunate with many opportunities. Good location, great schools, and a trained workforce, to name a few. By leveraging the opportunities given, O’Fallon has become a story of success,” he said.
While the city has worked diligently on preparation the past year, really, the plans were in the works long before that, starting with the Illinois Department of Transportation building the Rieder Road interchange, which was completed in 2017.
Previously, there was a bridge there, but did not have a highway entry or exit. Construction began in 2014 for the new interchange, which now provides access to U.S. 50 and east O’Fallon as an alternative to Air Mobility Drive and North Green Mount Road. It opened access to I-64 for residents of the rural areas around Rieder Road and provided another route to MidAmerica St. Louis Airpor and the DISA Global Operations Command Center.
The exit is 21 miles from downtown St. Louis.