Tag: business Expansion

Existing Business Growth Outpaces New Development for the First 8 Months This Year

The City of Edwardsville received $30,935,343 in new business/commercial permits for the first 8 months of 2019. This compares to $17,307,150 in new business/commercial permits from new development and companies entering the Edwardsville market for the first time.

 

These numbers are not usual, said, Walter Williams-Economic Development Director. “Existing business growth should account for 60 to 80% of new job growth and new investment.  Edwardsville provides an ideal location for business growth with our skilled workforce, robust transportation routes, and a stable community. Supporting business growth and development is a core economic development function that helps to diversify and strengthen our local economy.”

 

Arguably the biggest existing business growth belongs to Hershey.  Hershey added nearly 300,000 square feet onto the existing warehouse distribution facility in Edwardsville.  The 292,410-square-foot expansion increases the existing plant’s size from an original 1.1 million square feet to nearly 1.3 million square feet. The cost of this project is valued at $4,535,765.

 

Stillwater Senior Living is expanding from 46 living units and 40 employees to 80 units and add 32,000-square-feet by winter 2020. This addition will be built behind the current building.  The new addition will cost $5 million and add at least 20 new employees.

 

Donco will pump $2,155,000 into the local economy by building on an addition to its existing facility. Once completed Donco will hire an additional 50 employees.

 

Amazon is spending $1,900,000 in the Lakeview Commerce Center location retrofitting this facility to handle large item distribution (pianos, televisions).

 

Target is leading the way in sustainable operations and recognizes that meeting their energy needs through solar is good for the community and environment. The Edwardsville Target is spending $705,224 in solar panel to reduce their energy costs It is anticipated that their rooftop solar project will generate enough energy to offset between 15 and 40 percent of a property’s energy needs.

 

Smaller, locally owned businesses like McDonald’s, Kettle River, Cassens, Joe Pizza, Culvers also made sizeable investments into their current business operations.

 

We recognize that business is at the heart of our success as a city.  That’s why throughout the various city departments, we make every effort to make doing business in Edwardsville as attractive and trouble-free as possible. These new investments from existing businesses bode well for the future of the city’s employment opportunities and its continuing economic strength.  The proof is in our success, said Hal Patton-Mayor City of Edwardsville.

 

Hard Hat Construction Area-Stillwater Senior Living Facility Expansion

New Addition Features:

  • 32,000 sq. ft. Expansion
  • 18 state-of-the-art memory suites with optional companion suites for couples, a secured courtyard, a sensory room, all-day dining, a private entrance, 24-hour nursing, an in-house physician, a private salon and all staff members are dementia- and Alzheimer’s-certified
  • 16 assisted living units, with studios, one- and two-bedroom units with two-bath deluxe styles. The building also has an upgraded state-of-the-art emergency response system
  • Building amenities will include a chapel, a respite room, four seasons room complete with walkout terrace, a lounge area with a fire pit, a fitness center and an upgraded therapy room.
  • The project will be completed winter of 2020.  Upon completion, this facility will have 80 units
  • Currently, Stillwater has 46 units with 40 employees
  • Anticipated hiring 30-40 new staff

Gateway Commerce Marks 20 Years, 15 Million Square Feet of Bulk Distribution Development

By Kerry Smith, Editor – St. Louis Construction News & Review Magazine

As Gateway Commerce Center celebrates the 20th anniversary of the arrival of its very first warehouse-distribution tenant, developers of the 2,300-acre bulk distribution park in Madison County, IL are reflecting back on its genesis, its progress and its unique space in the market.

April 2018 officially marks two decades from the park’s official opening.

TriStar Companies is the park’s developer and has been since day one. The idea for creating the large-scale development emerged from the mind of Rod Thomas, TriStar chairman, according to Michael Towerman, the company’s president.

“This was absolutely Rod Thomas’ vision from the beginning,” Towerman said. “We first began assembling the land in September 1996. The first transaction was signed in April1997, and that was the Dial (Corp.) lease. Dial was our first tenant at the park and opened in April 1998. Dial remains with us today.”

With regard to sheer capacity, Towerman says Gateway Commerce Center has built 15.25 million square feet of development with the capability to facilitate a build-out of approximately eight million more square feet. “Our tenant size usually ranges from 350,000 square feet on the low side to 750,000 square feet on the high side, though we have buildings as large as 1.3 million square feet,” he said. “We also have some smaller capacity available.”

Putting Gateway Commerce Center in context with the St. Louis MSA’s various offerings in terms of bulk distribution sites, Towerman says in 2017 approximately four million square feet of new bulk warehouse space was built. “If we (Gateway) got 100 percent of the market, we’d be full in two years, but that’s not going to happen. As long as we don’t get an economic downturn, our submarket will continue to attract about 500,000 square feet to 750,000 square feet per year, maybe a little bit more. Some readers may think I’m a bit pessimistic, but (former Federal Reserve Chairman) Alan Greenspan said a few years ago that we’re living in a period of ‘irrational exuberance.’ That’s kind of how I feel now about where we are. The bell doesn’t go off before a downturn. It takes eight months to develop an industrial building, and two to three years to build and lease an apartment complex. If you started (construction) when you thought the market was pretty good, it’s almost like, ‘Gee, I think I built one or two too many’ at some point. That’s the speculative nature of what we do,” he added.

Amazon’s ambitious development of fulfillment centers in Gateway Commerce Center and elsewhere is an anomaly rather than the norm, according to Towerman.

“While e-commerce has driven a lot of construction and leasing over the last four years, if you take Amazon out of the St. Louis market, you take out 1.5 million square feet to 1.9 million square feet – or about 2.75 million square feet of absorption – out of the equation,” he said. “If you subtract that number out of what has been built in St. Louis over the last couple of years, you’d see a very different picture.”

One commercial construction company that has and is building a significant amount of product in Gateway Commerce Center is Edwardsville-based Contegra Construction. The firm has built more than 4.8 million square feet in Gateway Commerce Center, and by the close of 2019, the contractor will have completed 6.8 million square feet in the park. Contegra President Eric Gowin says his company has built four bulk distribution projects in a row within Gateway Commerce Center and is the shell building contractor for two million-square-foot buildings that are currently under construction within Gateway for World Wide Technology, both of which will be completed next year.

“We’ve been building and leasing these projects one at a time for TriStar,” Gowin said. “We adjust each for the site and according to marketplace demand at the time. Each is similar in size and scope. We’ve been replicating what’s been working in meeting the demand.”

Towerman says there’s no doubt that e-commerce is the key driver. A still-expanding U.S. population of consumers buying online and expecting their goods to be delivered more quickly that ever before adds up to the certainty of a flourishing demand for warehouse space well into the future, he added.

“Another factor is aging warehousing stock,” Towerman said. “In the Northeast, there’s an old supply of warehouse space,” said Towerman. “The average age of warehouse facilities in the Northeast is much older than in the Southwest or Midwest. Thus, those older facilities don’t work as well. They don’t offer the specifications necessary for e-commerce such as 36-foot ceiling clearance heights, compared to 28-foot heights which had previously been the norm.” The older buildings in the Northeast, built in the mid-1990s, have ceiling heights ranging from as low as 15 feet to 22 feet, he said.

Towerman references a study performed in September 2016 by real estate logistics expert Prologis that reveals online retailers need approximately 1.2 million square feet of warehouse space per every one billion dollars of online sales – three times the distribution center space required for traditional brick-and-mortar retailers. According to Prologis’ research, there are four unique business characteristics of online order fulfillment that are driving this space requirement: extensive product variety, greater inventory levels, larger outbound shipping space requirements and increased reverse logistics (also known as process returns).

“We (Gateway Commerce Center) will continue to see an increase in warehouse demand until we hit a saturation point,” Towerman said. “I think as long as there are no macroeconomic eruptions – such as wars and trade wars – I think we’ll see continued expansion in industrial bulk distribution warehouse development. We’re not a port town, we’re not Atlanta or L.A., but we get our share of development. We have our place in the supply chain but we’ll never see the peaks and valleys.”

According to the State of Illinois’ Dept. of Commerce & Economic Opportunity, Gateway Commerce Center’s enterprise zone – an economic incentive sanctioned by the state, Madison County and local municipalities that offers companies to apply for property tax abatement, sales tax exemption and more as an incentive to locate, expand or retain their presence in the park – is one of the most successful enterprise zones in the state, as measured by total number of jobs created and real estate investment.

Reprinted with permission from St. Louis Construction News & Review Magazine

 

World Wide Technology to expand in Edwardsville, add up to 500 jobs

From the St. Louis Business Journal:

Jim Kavanaugh
DILIP VISHWANAT-photo

Mar 19, 2018, 7:28am CDT

World Wide Technology is planning an expansion of its Metro East industrial facilities that could bring as many as 500 new jobs to Edwardsville.

Maryland Heights-based World Wide Technology, which is one of the region’s largest private companies, currently occupies 1.6 million square feet of industrial space in two buildings in Edwardsville. The company’s lease on those facilities expires in 2020, and upon the lease’s expiration, the company plans to move into two new 1-million-square-foot buildings to be developed by TriStar.

TriStar will break ground on the new buildings in the Gateway Commerce Center, just a few miles from World Wide Technology’s current facilities, in the coming weeks.

With the move, World Wide Technology plans to increase its number of employees at the facilities from the current 1,200 to up to 1,700 over the next five years. The new jobs will focus on technical engineering and warehouse logistics.

“This investment will further expand our capacity and ability to serve our customers domestically and around the world,” CEO Jim Kavanaugh said in a statement.

The company plans to begin the first phase of moving into the new facilities in May 2019 and wrap up the move by mid-2020.

World Wide Technology reported $10.4 billion in revenue last year and employs 4,500 people, including 2,100 locally.

SIUE’s Sullivan talks of changing times in workforce, sees economic growth ahead in region

Dr. Tim Sullivan

EDWARDSVILLE – Dr. Timothy S. Sullivan, Ph.D, Southern Illinois University Edwardsville School of Business, said the economic forecast for the area is dependent on several factors, but he sees a bright future ahead this year and in coming years.

Sullivan was a key presenter at the annual Edwardsville Breakfast this past week at Wildey Theatre in Edwardsville.

He showed some various slides that showed growth of about 3.5 percent of the national economy over the last 10-15 years. That growth has slowed in recent years and since 2000 grown at an average rate of about 1.8 percent.

Sullivan’s prediction is for likely more of the same this year nationally and throughout the Madison County region, but he said that is dependent on several factors, including an Illinois State budget or not and what happens in Washington, D.C., in coming months with trade and many other changing factors. Sullivan pointed out an interesting factor that there have been 11 recessions since World War II, something that might take some by surprise.

Since 2000, Madison County and Illinois in general have grown at an average rate of 0.8 percent, he said. The St. Louis Metropolitan area has grown at 0.7 percent and the U.S. economy as stated before has grown at 1.8 percent.

The 2017 forecast by Sullivan is 2.3 percent national growth, 1.3 percent in Illinois, 1.0 in the St. Louis metropolitan area and 1.5 percent in Madison County. The Wall Street Journal predicts 2.4 percent growth, so Sullivan’s predictions mirror others nationally.

Since 2000 the workforce nationally has declined about 3 percent for men and women, he said, translating into several million lost jobs.

Sullivan told the audience that going forward, he expects businesses to find workers in a different way, not as much through conventional newspaper classified listings but postings on the Web and social media, along with contact with community organizations, placement agencies and even churches.

He stressed this is a changing time in the American workforce and employers must adapt with it to obtain the best possible workers.

If you have a news, human interest or sports idea, e-mail Danbrannan@riverbender.com or call or text 618-623-5930. Follow Dan Brannan on Facebook and on Twitter.

J.F. Electric named 2016 Business of the Year

Jonathan Fowler, of J.F. Electric Incorporated, accepted the award at Tuesday’s annual Economic Forecast Breakfast.

J.F. Electric Incorporated accepted the 2016 Business of the Year award at this morning’s Economic Forecast Breakfast at the Wildey Theatre. With numerous business owners and city staff in attendance, J.F. Electric was recognized for its efforts and successes over the past year.

Edwardsville Mayor Hal Patton presented the award and said after the business located its headquarters to Edwardsville, both the business and the city have grown exponentially.

“J.F. Electric traces its roots back to 1925. A father-owned company, a contracting firm established by James E. Fowler in St. Louis, Missouri. Under the leadership of James’ son Charles R. Fowler, the company expanded and diversified, redoubling its efforts in the southern Illinois market. In 1969, current chairman James C. Fowler, son of Charles, purchased the electric division from his father, founding J.F. incorporated with headquarters in Edwardsville, Illinois. Under James’ leadership, the company expanded dramatically to meet growing demand for commercial, industrial and utility construction. The father family tradition of strong leadership and commitment to quality will continue for generations to come,” Patton said.

“It is my pleasure to present the award for J.F. Electric for their investment in the city of Edwardsville. The city is extremely grateful for J.F. and a key business partner in our community,” he added.

Jonathan Fowler, of J.F. Electric, accepted the award on behalf of his grandfather, Jim Fowler, chairman of the J.F. Electric Incorporated Board. The company provides a variety of services, including electrical design and construction services to utility, commercial, industrial and communications customers while also offering transmission and distribution line construction, design and build, special systems installations, and more.

Fowler said after his grandfather set his sights on the Edwardsville area, the business continued to grow.

“(My grandfather) saw the potential that this city had. Great geographical location, great leadership and eagerness to grow. He thought that this would be a great place to grow as a business and he was right. Ever since then our goal has been to create connections and deliver value in all aspects of business. We seek not only to establish great relationships with our customers, but also to create interactions with the community itself. Our relationships drive our business and continue to remind us why we need business in Edwardsville,” Fowler said.

J.F. Electric has contributed to sponsoring local events, donating funds to the city and also supplying power to its customers.

Fowler said he hopes the J.F. Electric continues to prosper and wishes the best for the other surrounding local businesses as well.

“The relationships between Edwardsville and the businesses that reside here is an important one. Edwardsville is a greater place because of the businesses that are here and the businesses are greater because of the support the community provides. It’s an environment that works for the benefit of everyone that lives and works here in Edwardsville. I truly believe that there has never been a greater time to live and work here in the city. As a lifelong resident, I have seen the community grow and the opportunities flourish. We are currently working on a number of projects here in the city of Edwardsville and see many more on the horizon,” he said.

“We will continue to do our part in bringing more business and people to the city of Edwardsville…we hope others will follow,” he added.

For more information about J.F. Electric Incorporated, visit the company’s website at jfelectric.com.

Local economic forecast has potential for 2017

Edwardsville Mayor Hal Patton discusses Edwardsville’s economic successes over the past year at the annual Economic Forecast Breakfast on Tuesday.

Updated 12:09 pm, Tuesday, February 7, 2017

The Wildey Theatre had a full house this morning as city staff and local business owners attended the annual Economic Forecast Breakfast. The event was organized by Economic/Community Development Director Walt Williams and featured several key speakers, including Dr. Tim Sullivan, of SIUE, Cathy Hamilton with the BARBERMurphy Group as the moderator, Mike Hurley from Balke Brown Transwestern, and others. The focus of the breakfast discussed the predicted economic outlook for the new year.

Patton started off the discussion and said this past year was one for the record for the city of Edwardsville.

“It was a record year for total investment. We also had a record year for job creation and we had a record year for investment in our downtown. The city of Edwardsville is turning up, a city of both tradition and progress, from our infrastructure improvements to demolition of vacant, underutilized structures to construction of new state-of-the-art buildings. Business is being redefined in Edwardsville,” Patton said.

The city has seen new additions in the year 2016, including the newly-constructed headquarters of First to the Finish, the SIUE Fire Station, Prairie Farms, Madison County Mutual Auto Insurance Company in Park Plaza, and various others.

Patton said the city has also made significant progress with projects, both finished and those still in the works.

“We’ve also completed a lot of infrastructure projects ourselves. As you know, the new fire station out at SIUE, $3.5 million investment makes our campus safer, makes our community safer by getting down to the warehouse district where we have over five thousand workers on a daily basis. We also completed Leon Corlew Spray ‘n Play Park…we had over 500 visitors a day for the first two and a half weeks, so we’re proud of that,” he said.

“The result of this synergy is an existing business is growing in Edwardsville. Thirty percent of our 893 registered businesses have hired new employees for 2016. Our residents consider Edwardsville to be an excellent investment choice. In 2016, 67 permits were issued for downtown Edwardsville improvements. These permits had a value just under $4 million,” he added.

With new local businesses that have joined the Edwardsville area, including Where They Roam, the Water Sweet Soap Company, Taqueria Z, and others, Patton said with more business comes more investors.

“When current businesses and committee members continue to invest in our community, it sends a message to other investors that they need to be here as well. These numbers prove that Edwardsville is open for business. Our goal under my administration has always been and will always be to encourage bustling economic activity while maintaining and building on the character of our neighborhoods and the quality of our family life. Edwardsville is absolutely a place where you can live, learn, work and play under a great example of government that works,” he said.

Dr. Sullivan then took to the stage to give his proposed national and local economic outlook for the new year. Taking into consideration the national economic downfalls, Sullivan said there are a few uncertainties.

“Since the year 2000, we haven’t been anywhere near (a) three-and-a-half percent (increase). In fact, what we’ve averaged, annual rate, would be 1.8 percent. The slow down started quickly after 2000 but it really accelerated in the second part of that decade,” Sullivan said. “This is not just the recession. We’ve had eleven recessions since World War II…but this is the typical pattern. The economy slows, it shrinks, it starts to grow again and then it shoots up and gets us back on that three-and-a-half percent growth track within a few years. So of course this what everybody expected to be happening back in 2003, 2004, 2005.”

With the Illinois annual economic growth being less than 1 percent, 0.8 percent, Sullivan said his prediction is as follows: 2.3 percent increase for the U.S., 1.3 percent for Illinois, 1 percent for St. Louis/MSA and 1.5 for Madison County.

“In the context of the last fifteen years, these are somewhat optimistic numbers. We haven’t had these growth rates for the last fifteen years so this is optimistic,” he said. “They’re pessimistic by World War II standards, but they’re optimistic for 2000 and beyond standards.”

Sullivan said he is still keeping an eye on the economic changes that are sure to occur over the course of this year.

If there are drastic changes, Sullivan said his predictions are subject to change accordingly.

“We don’t know whether NAFTA (North American Free Trade Agreement) is going to be broken open and renegotiated, we still don’t have a budget in Springfield, then I’d probably want to slice off a tenth or two of a percentage point on the forecast. If you told me by the beginning of summer that we’ll have a budget in Springfield and some of the national things have been resolved. One way or another, regardless of how they get resolved, I’d probably want to bump up an extra tenth or two of a percentage point onto my forecast. Again it’s just the drag of the uncertainty,” he said.

Other key speakers discussed a market analysis for Class A office spaces in Edwardsville, city projects currently in the works and upcoming opportunities for local business owners as well.

For more information about local businesses or economic development, contact Walt Williams via email at wwilliams@cityofedwardsville.com or call 618-692-7533.

Enterprise Zones and their Role in the Local Economy

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Dr. John Navin
Many of us have driven I-270 west heading into north St. Louis County and noticed the large group of warehouses on our right. This area known as Gateway Commerce and Lakeview Commerce Centers hold two of the largest warehousing districts in the Metro East. The commerce centers’ history and rise coincides with the creation of an enterprise zone in Edwardsville and Madison County. The enterprise zone was created in September 1997 and has been very successful in drawing businesses, their associated spending, and new employment to our area.

What is an enterprise zone? Enterprise zones are specially created areas designated by the State of Illinois that qualify for special development incentives, such as investment tax credits, property tax abatements, and some sales tax exemptions. Enterprise zones are not Tax Increment Financing Districts (TIFS). Unlike TIFS, the enterprise zone provides property tax revenue to local taxing districts, and the amount of property tax revenue will grow over time due to the increase in the value of the improvements and the phasing out of the property tax abatements. In fact, the commerce centers provided the Edwardsville School District with over $525,000 in property tax revenue last year and will provide almost $700,000 this year.

How have the enterprise zones worked out for our local economy? Since 1997 over thirty firms have chosen to locate in Gateway and Lakeview Commerce Centers. These firms have been associated with hiring over 5,000 new employees. Both centers continue to grow – there are new buildings being constructed now with more in the planning stages. The creation of these buildings and the availability of a highly educated and well-trained workforce are helping to make this area a hub for logistics-related companies. The recent announcement that Amazon will be building/occupying two facilities and employing nearly 1,000 people speaks to the attractiveness of these centers. These developments bode well for Edwardsville, Madison County, and the surrounding area’s future economic development. According to a recent study commissioned by the East-West Gateway Council of Governments and the Missouri and Illinois Departments of Transportation, this region can expect tremendous growth in logistics over the next twenty years. Projects like the commerce centers position us well to take advantage of this growth and will provide the region with increased employment, taxes to support our schools, as well as increased demand for local goods and services.