GARY — The man helping lead the city's economic development efforts said it has to overcome decades of neglect to bring business into the area around Gary/Chicago International Airport.
Increased focus has been put on land due north of the airport since a proposed immigrant detention center was soundly rejected by the Gary City Council in May on ethical and other grounds.
Despite the promise of more than 200 jobs, many people did not like the idea of such an operation and said it might deter other potential businesses from locating around the airport.
The city's economic development efforts are focused on bringing more heavy industry into the Buffington Harbor area north of the airport, while seeing the land directly across from the airport as appealing more to logistics operations, such as trucking or distribution businesses, according to Bo Kemp, executive director of Gary's Economic Development Corp.
Attracting businesses to the land along Airport Road faces challenges because of wetland and brownfield issues along with the need for some infrastructure improvements, some of which are in the works.
Geo Group Inc., for instance, the company that wanted to place the immigrant detention center there, estimated it would cost $3 million to remediate the land it was expected to use.
Much of the vacant land along Airport Road between Cline Avenue and Clark Road, north of the airport, however, may never be developed — at least not in the near future, Kemp said.
For some 40 years, the city hasn't really invested in its infrastructure and in a way the city is starting from scratch as it gets land ready for companies to come in, Kemp said.
"One of the things that is under-appreciated is how much pre-development has to go into it," he said.
Developing fresh ideas for the land
There are some opportunities, however, to develop at least some of the remaining land there. Kemp suggested speculative buildings could be built there for distribution centers or other logistics operations, which could include trucking firms like existing tenant Swift Transportation. The area also could be used to create access roads into an 84-acre industrial park being developed around Buffington Harbor.
A year ago, the city announced it had formed a partnership with Garmong Construction Services, of Terre Haute, for the industrial park development. Carmeuse Lime and Stone transferred the site to the city two years ago. Garmong specializes in building industrial shells and marketing them to companies.
Kemp said the city is still working with Garmong, but is more interested in attracting heavy industry to the site and while it may still have a spec building there, indicated it is focusing on other areas in the city to build them.
He said the city is expected to have an announcement within 18 months on spec buildings being constructed in Gary.
Kemp said the advantage of heavy industry, such as Carmeuse, over light industry, such as technology companies, is that heavy industry offers more jobs and seeks employees with a broader spectrum of skills. Technology companies, he noted, may be seeking a more limited group of employees with specific skill sets.
Spec buildings, land planning needed
Chris Gary, senior vice president specializing in industrial real estate for NAI Hiffman, believes the airport area is attractive to companies, but a deterrent is a lack of speculative buildings for companies to use.
The area is "potentially an attractive area" for distribution and light manufacturing companies, Gary said. It is close to Chicago, and Cline Avenue is "like an interstate" with no stoplights, limited access, and off-ramps that make it easier for trucks to get to and from the area, he said.
Gary, noting the area's proximity to the airport, rail, highway and water, said if the land were near O'Hare International Airport, "there would be 1,000 buildings there."
Kemp agreed with NAI Hiffman's Gary that the area is unique in its proximity to rail, highways, ports and the airport.
The biggest issue, however, is a lack of buildings for distribution companies and others to use, according to Gary. He said distribution companies like being able to rent a building for three to five years to have flexibility in case their business shrinks or expands. Gary said developers "so far, have not been willing to put a speculative building there."
Gary said warehouse developers also like to have shovel-ready sites and large sites of 50 acres or more for economy of scale. For that same reason, the buildings erected are usually 100,000 square feet or larger.
Development plans underway
Some companies already scheduled to open along Airport Road include Vexor Technology, a waste-to-energy firm expected to open late this year or early next year.
The company turns material that can't otherwise be recycled into a fuel that will be used by Carmeuse as a coal alternative to heat limestone in its kilns.
Kemp said one of the city's challenges is that it has several hundreds of acres, but for the most part they don't have contiguous pieces of land that span 15 acres or more.
He said for that reason, the city would have to work with private owners to put together such a large plot, unless a private company comes in and buys the needed land on its own, as Geo Group did.
The Airport Facilities Co. Inc. of Dulles, Virginia, which is in the second year of a contract with the airport to attract development to the area, has been involved in the ongoing analysis of the land that could be used for development, according to Kemp.
Airport Executive Director Dan Vicari noted a significant amount of infrastructure work is taking place in the area, including the planned improvement of Airport Road between Cline Avenue and Clark Road starting later this year. Kemp said this project will cost about $20 million and could take two years to complete.
It will involve replacing the road with one that has gutters and includes landscaping, bike trails, and other infrastructure improvements, such as storm sewers, to make the area more attractive.
The city is also involved in a $14 million project at Buffington Harbor that will improve road access for some current and future businesses that may go into the industrial park area. The airport is looking at securing a customs office that will make the area even more attractive for businesses.
Vicari said each property has different challenges. In some cases, it may be environmental remediation or wetland mitigation; in others it may be concerns involving utilities or access that have to be addressed.
Contamination remains an issue
The city is making efforts on different fronts to make the land around the airport more available for development, including lobbying for help in dealing with wetland issues, seeking grant money, and doing an ongoing analysis of the area's land.
In addition, officials have been looking into whether there might be some insurance money available for cleanup at some of the brownfield sites by investigating what companies might have caused the contamination.
Kemp said another waste-to-energy business was considering locating a plant in that area, but plans for the estimated $30 million project were scuttled when it was determined wetlands remediation on the site would be too expensive.
Mayor Karen Freeman-Wilson last month traveled to Washington, D.C., partly to determine the best approach to deal with such wetland issues.