Due to the growing demand for e-commerce needs of retailers and shippers, Glenwood is moving forward with plans to build 500,000 square feet of warehouse space. This will be the single largest commercial development in the 150-year history of the village of Glenwood.
An article in The Chicago Tribune states that M1 Properties is proposing to build a massive warehouse project on 38 acres on the west side of Illinois 394 and south of Glenwood-Dyer Road.
The project will be called Glenwood Park 394 and construction is scheduled to start next summer. Plans call for the following:
- 141 loading docks
- Adjacent parking for trucks and other vehicles
A redevelopment agreement with M1 and Glenwood Commerce, calls for the project to be completed by the end of 2024.
The agreement was recently approved by the Village Board and calls for a tax increment financing district which is the next step in the process.
When a Tax Increment Financing district is created, the equalized assessed valuation of property inside it is established as a base which is also sometimes referred to as "frozen".
The property taxes on this base amount continue to flow to other taxing bodies such as school districts but they don't realize any incremental increase in taxes until the TIF has expired. Other taxing bodies also have to agree to establishing it.
The life span of the TIF district is usually around 23 years, although TIF's can be ended sooner than that and the duration of a TIF can also be lengthened another 13 years under certain conditions.
Incremental increases in the property tax revenue due to new construction of redevelopment are put in a separate fund while the TIF is in place. This can be used to reimburse a developer for certain expenses such as land acquisition and public improvements such as utilities.
The Cook County Board was also asked by the Village Board to approve a tax reclassification for the property. This was also another requirement of the redevelopment agreement.
The short-term property tax reduction would not take effect until the project is finished. Industrial property is usually taxed at 25% of market value, the reclassification would reduced it to 10%, the same level as assessments for homes.
The 10% rate lasts for 10 years and then the property is assessed at 15% of value in the 11th year, 20% in the 12th year and 25% after that.
Over the past years, a lot of the regional warehouse projects have been located in lower tax sites in Will County. Things are changing even though Cook County municipalities have had to induce that development to overcome their property tax disadvantage.
Large projects are tied to demand for warehouse distribution space that is driven by e-commerce growth. These have been in the south and southwest suburbs and also included Country Club Hills, Tinley Park and Oak Forest.
Right now demand for such space is incredibly strong throughout the south suburbs. There isn't enough available space to keep up with the demand and there is no sign of this slowing down.
CBRE estimates that for each $1 billion in additional e-commerce sales, another 1.25 million square feet of distribution space is need to keep up with the supply chain requirements.
Cushman & Wakefield stated that through the first half of this year, industrial leasing in the Chicago area jumped almost 14% compared with the first half of 2020.
Manufacturers, retailers and distributors don't see this trend lessening.
Glenwood officials said that while Amazon has developed large fulfillment centers in the south suburbs to help get goods to customers, other shippers want distribution sites closer to customers to shorten delivery times, especially in heavily populated areas.
This project will be a speculative property and no firms are lined up at this time.