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Jerseyville launches Midwest logistics center

By DENNIS GRUBAUGH, Illinois Business Journal

Federal and state officials are cheering plans for a Jersey County transmodal logistics facility that could employ more than 1,000 people and represent a private investment of more than $500 million.

kcstrainMid-American International Gateway Business Park is the newly unveiled formal name of what privately has been referred to as “Project Panther.” The idea has been kept tightly under wraps the last three years as Kansas City Southern railroad and city of Jerseyville leaders worked to link up with a developer to turn the project into reality.

Details were unveiled on Friday at ceremonies in Jerseyville.

The developer is Stonemont Financial Group of Atlanta, Ga., represented by CEO and Managing Principal William “Zach” Markwell III. Stonemont is a privately held firm with $2.3 billion in projects and real estate under management, Markwell said.

The “panther” in Project Panther is the mascot of Jersey Community High School, where students have been actively learning trades that would put them in a position for some of the anticipated jobs, the mayor said.

Some 1,400 acres are targeted just south of Crystal Lake Road and east of the Kansas City Southern rail line, a north-south artery that would bring goods north from Mexico. From Jersey County, those goods would then be moved to points all around the Midwest, Jerseyville Mayor William “Billy” Russell said.

“We will become the distribution center for the Midwestern United States,” the mayor said.

The site is just south of the Jerseyville city limits and is expected to be annexed. The majority of the land needed — mostly on the north end of the development — is already under option.

“(Annexation) is part of the land option,” Russell said. “The development wants to be part of it for fire protection and police protection.”

Russell says he can see the site eventually expanding all the way to Range Line Road, which is more than a mile to the east.

The implications go far beyond Jerseyville, the mayor said.

“The probabilities of what’s going to happen outside the site are astronomical to the region,” he said. “We’re already getting inquiries left and right.”

The mayor called the facility “transmodal,” meaning it will serve intermodal transport of goods by both rail and truck lines; serve related businesses; and feature light manufacturing and assembly.

A feasibility study conducted for the city by a Houston firm two years ago showed potential interest in a business park from companies in several sectors, among them auto, woods, plastics, durable goods, steel and agricultural.

The mayor said 1,000 jobs could be produced in the early stages and many more later as businesses sign on.

Markwell has told him the investment could be $500 million to $1 billion.

Federal inspection jobs could also be located in Jerseyville to inspect cargo coming out of Mexico. That’s down the road, the mayor said.

The feasibility study does not take into account construction jobs involving the actual buildings, infrastructure, roads and railroad construction, the mayor said.

Stonemont is financing the project, with Jerseyville’s expense limited to such things as paperwork and time spent pursuing the project, the mayor said. However, a tax increment financing district is to be created — the fourth in the Jersey area.

The state also recently approved a regional enterprise zone, known as the Jersey-Greene Intermodal, which covers Greene, Jersey and northern Madison County including Godfrey. The potential of the Jerseyville facility was a key element in getting the enterprise zone approved.

The land is also part of the foreign trade zone connected with America’s Central Port, based in the Granite City area.

“We incorporated this when we did our (enterprise zone) application, to regionally create jobs alone the KCS line. So, any community that had a chance at a portion of that business, or who wanted to set up along the KCS line, they could,” Russell said.

The project aligns with and may speed up the widening and relocation of U.S. 67, and U.S. Rep. Rodney Davis, R-Taylorville, has told local officials that the Jersey Bypass will likely get moved higher on the funding priority list, the mayor said.

During a recent meeting with the mayor, Davis asked Markwell what would happen to the project if the North American Free Trade Agreement is scuttled, as the Trump administration has advocated.

“The question was bluntly asked, ‘What if NAFTA goes away?’ (Markwell) said it won’t change the direction of this whatsoever because we still have business that needs done in the United States and the Midwest,” the mayor recalled.

The development would serve 43 million population within an eight-hour drive. KCS is the only Class 1 railroad, coming north-south out of Mexico.

How the project came to be

The mayor says the project was initiated by Timothy Carr, a senior sales account executive for KCS.

“Tim Carr is a unique person, an up-and-coming development person in their system. He wrote his thesis for his master’s on this site,” the mayor said.

Carr approached Jerseyville three years ago. Russell wasn’t yet mayor and had actually talked about a rail hub concept while still a City Council commissioner.

KCS wanted to know why Carr was so set on Jerseyville as a potential site. KCS, after all, had facilities in both Springfield and Jacksonville from which they could develop a hub.

According to Russell, Carr said Jersey was the best choice from a logistical standpoint – and would save KCS customers money in the long run because of the congestion around Chicago.

Carr was instrumental in getting a new enterprise zone application passed at the state level, the mayor said, and he was a crucial voice at KCS. He worked his way up through the company, starting in the rail yard.

“He convinced all the people in his network that it works logistically because of the cost savings. Getting into Chicago, it takes 38 hours to get one train across Chicago. Goods coming out of Mexico bound for Chicago have to change rail carriers. Trucking things from Rockford to Chicago is just as much as it is from Jerseyville to Chicago,” Russell said.

Jerseyville enjoys better winters than does Chicago, the mayor added, and spring here isn’t as harsh as in Houston.

The Jersey business park, however, was just a concept until supporters could find the developer. Carr introduced the mayor to Stonemont CEO Markwell at a rail convention in Kansas City in September of last year. Carr and Markwell had worked together on Stonemont’s El Campo, Texas, business park.

“We had dinner with Zach the night before (we left). You could tell he was just different from all the others we’d talked to. We had been through meetings with two or three developers. They came in with the attitude that, ‘Yeah, we’ll do this, but we’ll do it our way’.”

Upon parting, “(Markwell) reached his hand out and said, ‘Mayor, we’re going to do this.’ It’s been ongoing ever since,” Russell said.

Local officials traveled between Jerseyville and Kansas City “three to five times” to get the particulars nailed down, he said.

Russell estimated there are around 10 owners involved in the sale of property for the business park. Multiple farming families are selling property for the facility. Of those, Russell named the Dennis Moore and Beatty families in particular. They account for 900 of the 1,400 acres. Only one home is affected, owned by the Beatty family.

“Zach is from Henderson, Ky. He knows the value of these properties. He understands rural communities. That’s how he’s been able to move forward,” the mayor said.

Backers see no problem getting the necessary property, he said, and business is expected to be underway in 2018. The development, though, is more like a 10- to 15-year buildout, the mayor said.

One of the first things Markwell was going to do this month was a business roundtable to lay out his plans.

“Long term, Zach is going to be part of our community. His intention is to be here a lot. He’s going to buy a residence here,” the mayor said, a point that Markwell acknowledged.

The business park is going to be unlike any perceptions that residents might have, the mayor said.

“It’s not just a railroad switch yard,” he said, adding that Markwell is prepared to sign 50-year deals in conjunction with the businesses, a sign of how serious he is about a long-term commitment.

“My goal was to find the right person to develop this. Until Zach came along, we’d get to a point but didn’t have the person who would make the initial upfront payment, knowing darn well the environment in the state of Illinois. Zach was the guy who said, ‘Whatever investment I need to make I’m going to build this’.”

The mayor said a critical point for him was getting business to locate in town so that young people stick around. Jerseyville is mainly an agricultural and commuter community. Most of its workforce goes out of town for employment, some to St. Louis and beyond.

“Come to my town and sit at the intersection at 5 o’clock in the morning, and watch the traffic flow coming from the north, through our community, and those people going right on out and having to spend four hours of their day just to get to work and back from work,” the mayor said. “What it would mean for those families just to have a chance at jobs where three more of those hours they could spend with their families.”

He added: “You can’t just sit idle. You’ll end up like a lot of small communities. You get very few chances like this in a lifetime.”

The St. Louis Regional Freightway, which has designated the Merchants Bridge at Venice as a top priority because it is a key rail crossing on the Mississippi River, is solidly behind the Jersey project, the mayor said.

“It’s about us all, it’s not just about Jerseyville succeeding. It’s about the whole region succeeding. We’ll get support from a lot of different areas,” he said.

Discussions have begun about improving some of the main roads that would serve the project, including Crystal Lake, Range Line and others.

“That is part of the due diligence that Stonemont is doing now,” he said. An engineering firm is working with IDOT on a traffic impact study. Those engineers are Bartlett & West, which opened an office in Jerseyville about two years ago.

Bartlett has a signed contract with Markwell’s company. “They know the railroad business,” the mayor said.

The city may also have to upgrade its fire protection and those discussions are now underway.

Electric is to be provided by MJM Electric Cooperative, which recently build a new substation. Ameren will provide the natural gas.

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