An industrial development underway in Country Club Hills intended to satisfy the needs of e-commerce companies will also put an emphasis on hiring minority and women owned firms to help build it, according to the developer.
At a bit more than 1 million square feet, the project by CRG will add to an already hefty amount of warehouse development in Country Club Hills.
“It’s going to create about 250 to 300 jobs” once finished, Mayor James Ford said Tuesday. “It’s going to bring people into the area which will allow them to patronize other local businesses, such as gas stations and restaurants.”
Called the Cubes at Country Club Hills, the 70-acre development will include 128 exterior docks, which could be expanded to 235, and 239 trailer parking stalls, according to the company. CRG said it expects the building to be ready for tenants sometime during the first quarter of next year.
The building is going up north of 183rd Street, just east of Interstate 57 and a few blocks west of Cicero Avenue. Some of the property had been farmland, but CRG also purchased a 32-acre camp that had been operated by the Girl Scouts of Greater Chicago and Northwest Indiana, according to Ford.
Friendship Center was put on the market at the end of the 2019 following the Scouts’ review of assets and the costs for improving them.
The nonprofit said at the time the property was underused or had “significant deferred maintenance issues.”
A spokeswoman for CRG said the transaction prohibited the developer from identifying any of the sellers or sale price. The company declined to say what the dollar investment in the Cubes project will be.
The company said it set a goal to have at least 26% of companies working on the project be minority owned and another 6% to be women-owned enterprises.
Privately held, CRG is the real estate development and investment arm of Chicago-based Clayco, an architectural, engineering and construction design-build firm that posted revenues last year of $3.8 billion.
The multifaceted company, which also develops residential properties, has overseen the design and construction of Amazon facilities in Channahon, Monee and University Park.
CRG said the Country Club Hills development is its first industrial development in the Chicago market.
CRG’s project is just southwest of Logistics Property Co.’s development, LogiPark 57-80, which includes 1.4 million square feet of warehouse space. It is going up on land that had once been eyed as the site of an outlet mall.
Logistics Property is also looking to develop a 44-acre site just to the west, in Oak Forest, bounded by 167th Street on the north, Interstate 57 on the east and south, and Cicero Avenue on the west.
At the end of July, CRG said it had launched a new fund to attract investment for e-commerce and logistics projects, with a goal of 10% of investments coming from diverse investors, including women and persons of color, according to the company.
Clayco announced last December an initiative, Clayco Rising, to increase diversity including employee recruitment and expansion of its partnerships with minority and women-owned subcontractors and suppliers.
More Top Picks Best Kindles
“The Cubes at Country Club Hills is a model for us going forward, to expand access across the entire life cycle of our projects so that underrepresented groups can truly participate at every stage,” Shawn Clark, CRG’s president, said in a news release. “This is a step toward greater inclusion for our industry and, we hope, greater equity as well.”
Ford said he hoped that the construction and finished product will create jobs for the region.
The property is in a tax increment financing district, with incremental increases in property tax revenue created by the development being available to reimburse a developer for certain costs, including land acquisition, demolition of existing buildings and public improvements such as utilities.
Other taxing bodies, such as school districts, don’t realize the full benefits, through higher property tax revenue, until after the TIF expires. The maximum life span of a TIF in Illinois is 23 years, although it can end sooner.
Country Club Hills has also endorsed a resolution that Cook County needs to approve that will reduce the property tax classification for the property.
Typically, such developments are taxed at 25% of fair market value, but the Class 8 resolution would reduce that to 10%, or the same amount applied to homes. The lower rate eventually goes away, but can be renewed.
Ford said that because the CRG development is in Cook County, such incentives are needed.
“It is very difficult to get developments like this to locate in south Cook because of the high property taxes,” he said.
Ford said Country Club Hills officials had been working with CRG on the project for about two years.
The company said that the pandemic brought an increase in online shopping and is fueling demand for new industrial space.
According to the U.S. Department of Commerce, e-commerce sales last year grew by 32%, or nearly $600 billion, compared with the prior year.
Real estate services company CBRE estimates that for each $1 billion in additional e-commerce sales, another 1.25 million square feet of distribution space is needed to meet supply chain requirements, according to CRG.
According to Cushman & Wakefield, which will market the Country Club Hills development to potential users, developers such as CRG can’t get new product in the pipeline fast enough to satisfy demand.
Through the first half of this year, industrial leasing in the Chicago area jumped nearly 14% compared with the first half of 2020, with more than 26 million square feet gobbled up, the largest absorption on record, according to the firm.
Getting distribution sites closer to heavily populated urban areas has resulted in projects such as Amazon’s fulfillment centers locating in Markham and Matteson, both in Cook County, and Cushman & Wakefield said it expected the Country Club Hills project to attract considerable interest from potential tenants.