COVER STORY, FEBRUARY 2011

I-39 CORRIDOR: THE MIDWEST’S HIDDEN GEM
The I-39 Corridor continues to shine as a beacon for national transportation opportunities.
Amy Bigley

Stretching north and south from Madison, Wisconsin, to Bloomington Normal, Illinois, and east to west from Sycamore, Illinois, to Rock Falls, Illinois, the I-39 Corridor in Illinois and Wisconsin is a hub of transamerican logistic services and transportation.

Organized in 2004, the I-39 Logistics Corridor Association is a collaboration between private and public companies, cities and developers for the purpose of promoting and marketing the Interstate 39 Corridor as a logistics development region.

“The association is primarily a marketing tool for the local EDCs, cities, businesses and developers,” explains Janyce Fadden, executive director of I-39 Logistics Corridor Association. “By showing the larger asset as the strength of the corridor, the association has been able to accelerate the attention site selectors give to projects that could benefit from locating near Interstate 39.”

Despite the economic downturn, the I-39 Corridor is still a viable region for development and company expansions and relocations. The cities and submarkets that create the corridor are largely pro-business, especially pro-industrial business development. The combination of prime employment zones and supporting residential zones, makes the corridor a successful location for companies that are dependent on cross-country transportation access.

The corridor runs north-south from the Interstate 90 and Interstate 94 interchange to the I-39, Interstate 74 and Interstate 55 interchange. The I-39 corridor also includes the Interstate 80 interchange, the Interstate 88 interchange, the Interstate 90 interchange and the Interstate 43 interchange.

Regardless of the slow economy, development has continued in the I-39 Corridor, albeit at a slower pace. Lincolnshire, Illinois-based Venture One Real Estate is currently under way with a 450,000-square-foot expansion for 3M Corporation at the company’s Park 88 in DeKalb.

“I think [the 3M expansion] is the largest project going on in the corridor,” says Mark Goode, principle of Venture One Real Estate. “This is our fourth project with 3M and their fourth expansion in DeKalb. The obvious benefit from our perspective is seeing 3M expand again in Park 88 and its commitment to the region.”

Many developers have seen the advantage of the I-39 Corridor and the region is now scattered with industrial, office and mixed-use business parks. MLG Commercial has a 750-acre mixed-use project in Beloit, Wisconsin. Andy Bruce, executive vice president and principle with MLG Commercial, explains that although the company does not have speculative development under way, Gateway Business Park has the needed infrastructure in place and offers sites from 2 to 200 acres. Companies continue to break into the market, including Italvibras and Empire Acoustical Systems Inc., which recently entered the Princeton, Illinois, market. Additionally, Spring Valley, Illinois, welcomed a new Keystone metal distribution warehouse, just off Interstate 80.

Additional projects in the area include a 60,000-square-foot solar panel facility in Rockford, Illinois, and Nippon Shayro’s $40 million rail plant in Rochelle, Illinois, which will employ 300 residents. Also, Chrysler has announced a $600 million, 500,000-square-foot expansion at its plant in Belvidere, Illinois.

The continued development of the I-39 Corridor would not be possible without support from local cities and economic regions. The area’s overall pro-business and pro-industrial business mindset has propelled the region forward with little challenges beyond economic shifts in the market.

Large companies want the communities they enter to want their business, explains Goode. “All along the I-30 Corridor cities are pro-development. They’re looking forward to the jobs,” he notes.

The area’s employment base, which is skilled for industry, and its history with industrial development and growth, is a proven combination to attract businesses and development.

“Princeton is fielding an increase in inquiries for existing buildings and green sites,” says Pete Nelson, planning and zoning administrator with the City of Princeton. “The location of Princeton and Bureau County, Illinois, is deep in the national transportation corridor. It is likely that as the economy thaws, this area will be on many radar screens for development.”

The future of the I-39 Corridor is bright and will continue to shine in the Midwest. As the market and commercial real estate picks up, local investors expect to see an uptick in interest and development in the area.

“We think in 2011 corporations are going to make an investment on the capital side and do build-to-suits on a fairly national basis,” says Goode. “I think a lot of major corporations are sitting on a lot of capital.”

For development to occur, especially build-to-suits, companies have to make a long-term commitment to spend capital for the improvement of its logistics, construction, development or manufacturing capabilities, and with the lack of confidence in the market, companies have been shying away from such commitments in the recent years.

However, confidence in the I-39 Corridor is up and continues to rise throughout the recession and recovery. With the association’s work to promote and market the region, the I-39 Corridor is an established player in the commercial real estate market, especially for investors, companies and developers interested in national transportation capabilities. The area expects development to continue as companies seek the most cost-effective, efficient way to reach their customers, notes Fadden.

Additionally, the I-39 Corridor has room to grow. Located on the western edge of the I-39 Corridor, Princeton is in prime position for the corridor’s westward expansion.

“The sizes of buildings and parks may vary, but the tools for development and demand for efficiency, with good return-on-investment, all can be found in this unique and vast embryonic territory,” notes Nelson. “Our success will depend on our individual skills to find the needs and meet them completely.”

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