Metro St. Louis area making inroads as a logistics, warehousing hub

August 21, 2006

Metro St. Louis area making inroads as a logistics, warehousing hub

By Jeff Berman, Senior Editor
Logistics Management

MADISON COUNTY, Ill.—The area east of St. Louis, Missouri in Madison County, Illinois (near Edwardsville and Pontoon Beach) is becoming a player in the mid-west logistics market, with a fast rate of expansion going on at warehouse and distribution facilities.

The Gateway Commerce Center

One location in particular—the Gateway Commerce Center (GCC)—has steadily added warehousing space since Dial moved to the 2,300-acre facility in 1998. Dial’s building at the GCC occupies 812,000 square feet and the GCC has the potential to hold up to approximately 23- to 25-million square feet.

Other large companies that have set up shop in the GCC include:

• Proctor & Gamble, which opened up an 806,400-square-foot building in 2001,
• Hershey, which opened up a 1,000,000-square-foot building in 2004,
• and Unilever, which opened up a 1,262,648-square-foot building in 2003.
• OH Logistics, a third-party logistics (3PL) service provider has four buildings on site, accounting for 2.3 million square feet. Schneider National announced in June it will open a 25,000-square-foot repair and service center at GCC, and USF Holland opened a 102-door terminal at GCC earlier this summer.

"Gateway Commerce is booming, and it's emblematic of the region's emergence as a major distribution player," said Richard Fleming, president and CEO of the St. Louis Regional Chamber and Growth Association. "In the past, the St. Louis area couldn't compete with mid-sized cities like Indianapolis or Memphis because of a lack of sufficient spec [speculative] distribution space, and now the area has the space and can compete."

Incentives to set up shop in metro St. Louis

The spate of large companies coming to this area to set up warehousing and distribution facilities is largely driven by land availability at one-third of the price often seen in other industrial areas in neighboring St. Charles county.

Additionally, there are economic incentives, tax abatements, and tax increment financing, according to Ed Lampitt, vice president of Trammel Crow Krombach Partners, GCC’s marketing representative who sells and arranges its leasing options.

The Mississippi River ties the bi-state region together, and the area to the east is booming because a local connector highway has been built that connects interstates 44, 55, 64 and 70, which crisscross the region--another reason the metropolitan St. Louis area is attractive for shippers.

"The southwestern Illinois portion of the region east of the Mississippi contains some of the most affordable transportation and distribution sites in the nation," said Jim Alexander, vice president of economic development for the St. Louis Regional Chamber and Growth Association. "And these are sites of substantial scale. At the same time, the Missouri portion of the region continues to be a robust market for warehousing and distribution."

And Lampitt noted that the GCC offers a Flying J truck stop operation, with a shower, a restaurant, a dataport and a filling station, as well as a full-service maintenance and repair shop. He added that the GCC is directly accessible to I-270 and I-255, with full interchanges within the industrial park.

Competition

While the GCC is becoming established as a warehousing hub in Madison County, it is not without competition. Panattoni Development Co. LLC, a commercial real estate developer with offices throughout the U.S., is building out distribution center space at the Lakeview Commerce in Edwardsville, which can accommodate up to seven million square feet of warehousing space. And Overland, Missouri-based real estate, architecture and engineering, design/build and construction firm Clayco is building a DC in Dupo, south of the GCC at the Discovery Park, which has the potential for 23 million square feet on more than 4,000 acres.