Roots of Warehouse Mania

This week a special treat: guest blogger Mac McIntyre, editor of DeKalb County Online magazine. This is the first of two articles of his that will appear here. Mr. McIntyre represents the DeKalb County Building & Development Association and has followed local growth issues for years. During an e-mail discussion of the push to build warehouses on spec to market to prospective tenants, he had this to say about where we got the idea that we should pursue logistics:

Short history story: Shortly after the DCEDC (Roger Hopkin’s group) was formed the DeKalb County Board and NIU paid a national research firm, PHH Farnus, to do an assessment to determine what kind of industrial/commercial development was needed and could be supported in the county. In September of 1989 the results of that study was released to the public. It identified warehousing/logistics as the target industry for DeKalb County on the following basis: 1) DeKalb County has a low unemployment rate, historically, because such a high percentage of our residents are employed by the government. That puts the county at a disadvantage in attracting other types of industries who would need large numbers of employees. 2) Warehousing/logistics jobs generally pay better than food processing and retail jobs so the influx of logistics jobs would create opportunity for increased wages for some of our low-middle income residents without creating a strain on the workforce required by our existing employers. 3) Large warehouses cost a lot of money to build thereby creating a large property tax base to help the schools without creating a burden of too many additional students. And 4) logistics does not use a lot of water or sewer.

The county government, along with DeKalb and Sycamore, invested (courtesy of taxpayers) heavily into infrastructure (like Peace Road) and an attraction program designed to put DeKalb County at the head of the crowd of communities trying to lure logistics to their community. They also tried to recruit local investors into getting the private sector to buy into the program. They were told by PHH Farnus that they (public and private) were making a long term investment that would take 20 years to pay-off.

I’ll also note that the PHH Farnus study also said that DeKalb and Sycamore needed “new construction of single family and condominium homes in the $80,000-$120,000 range to keep our high school graduates in town and to facilitate the sale of greater numbers of existing housing units in the price range just below the cost of new housing.” At that time the DeKalb School District was facing declining enrollment and revenues and were mothballing and selling school buildings. The school district was on the verge of bankruptcy and the State of Illinois was ready to step in. (That’s how we ended up with the Jack Deere fiasco.)

Here we are 17 years later. It shouldn’t be a surprise that Roger Hopkins is a cheerleader for logistics. He knows that the taxpayers and local private investors who invested back then are now at the point in time where their investments are either profitable or for losses. That’s why he jumped on the I-39 Logistics Corridor organization, to protect the investment DeKalb County has made from the regional communities who are trying to capitalize on this county’s investment. I understand why he wants spec buildings because in these times of JIT (just in time) commercial construction schedules having immediate inventory is an advantage. However, a spec logistics building requires an investment of in the tens of millions of dollars and there are so many of them, especially east of here, that somebody is going to really get hurt.

4 thoughts on “Roots of Warehouse Mania”

  1. Thanks, Mac for this bit of history. I had no idea that this idea went so far back. The growth summit talked about balanced growth and a diversity of industry. The tricky part is knowing when there starting to be too much of
    one type of industry. From my reasearch , warehousing seems to take on
    a life of its own and can easily get out of control.

    DeKalb (city) has no good plan to get trucks leaving from the main area
    along Peace Road out and around the city if they are heading west and not
    wanting to use 88. Bethany Road extension is slated to be a truck route
    from the northern end of Peace. How about the south end? Harvestor Dr won’t cut it. Guler Rd has old/new housing developement and a school.
    Maybe they should think about getting the routes.. before getting the trucks.

  2. Thanks, Charm…

    I wonder if we might be facing one of those, “be careful what you ask for cuz you just might get it,” scenarios with the truck by-pass route issue in DeKalb. It seems to me that the best truck route we have is I-88. If we make Fairview or Gurler too attractive to the truckers they just might think it more feasible to get off 88 at Peace to save some toll money. If they get off at Peace to do business that’s one thing, but I don’t think we want them to exit the tollway to save money. I am 100% with you that Harvestore is not a feasible route. Trucks going though downtown DeKalb don’t bother me near as much as waiting for trains.

    The Sycamore truck route issue is interesting. The original plan for Peace Road was that the entire road would be built for truck traffic. Each community (DeKalb and Sycamore) was supposed to pay its share of the construction of Peace Road, along with the County and I’m sure TEA-21 money (or equivalent) was involved.

    When Peace Road reached 23 at Farm & Fleet, the City of Sycamore balked at paying their share of the costs to extend Peace to Plank north of 23. They wanted Peace to end at Farm & Fleet so the northbound traffic would have to travel through downtown Sycamore. That, in my opinion, is the reason Peace Road is not built for truck traffic north of DeKalb Avenue. Its also might be the reason Sycamore has difficulty in getting curb cuts on Peace Road. I think the County remembers… :-)

  3. That is a good point. We don’t want extra trucks getting off 88 just to
    use a free route.

    A good protected left turn for the 23/38 would probably be very
    helpful. Especially after a train where traffic is backed up. I don’t
    really think that the trucks impact business downtown all that much.

  4. If we’re serious about making I-88 attractive to truckers, the tolls must be reduced. Better yet, I-88 becomes a freeway going west from DeKalb to such-and-such a point. What if all the municipalities (plus trucking companies? Teamsters?) that would be affected positively by such a change were to lobby for one of those outcomes in a concerted way. What does Pritchard have to say on this?

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