* From the BND this week…
“There’s a lot of opportunity in . . . turning East St. Louis into a logistics and transportation hub, but we’ve got to make the right kind infrastructure investments to make that happen,” Pritzker said.
* If he’s talking about emulating Will County’s Intermodal, maybe he should read this New Republic story first…
In a few short years after the Intermodal opened, Elwood became the largest inland port in North America. Billions of dollars in goods flowed through the area annually. The world’s most profitable retailers flocked to this stretch of barren country, while the headline unemployment rate plunged. Wal-Mart set up three warehouses in Will County alone, including its two largest national facilities, both located in Elwood. Samsung, Target, Home Depot, IKEA, and others all moved in. Will County is now home to some 300 warehouses. A region once known for its soybeans and cornfields was boxed up with gray facilities, some as large as a million square feet, like some enormous, horizontal equivalent of a game of Tetris. […]
According to the Will County Center for Economic Development, at least 25,000 tractor trailers a day come through the Intermodals. That amounts to three million containers annually, carrying $65 billion worth of goods. A staggering $623 billion worth of freight traversed Will County infrastructure in 2015 alone, roughly equivalent to 3.5 percent of the U.S.’s total GDP.
Sounds great, right?
* Not so much…
But this corporate valhalla turned out to be hell for the community, which suffered a concentrated dose of the indignities and disappointments of late capitalism in the 21st century. Instead of abundant full-time work, a regime of partial, precarious employment set in. Temp agencies flourished, but no restaurants, hotels, or grocery stores ever came, save for the recent addition of a dollar store. Tens of thousands of semis rumbled through Will County every day, wreaking havoc on the infrastructure. And as the town of Elwood scrambled to pave its potholes, its inability to collect taxes from the facilities plunged it into more than $30 million in debt.
* The locals made some huge mistakes…
An opportunity as great as the Intermodal came with a cost. First, to help seal the deal, the town had to offer the developer, CenterPoint, a sweetener: total tax abatement for two decades, until 2022.
* The traffic is a nightmare…
The turmoil has only been exacerbated by changes in the trucking industry, which has pivoted to an owner-operator model, relying on independent contractors over full-time employees. Oftentimes, truckers are paid per load—$50 to $70 to pick up a container from the Intermodal and drop it off at a warehouse. For independent contractors, responsible for their own gas and operating costs, speed is tantamount to profitability. A traffic jam can turn the trip from profit to loss. So truckers often take shortcuts down small residential roads, unequipped for weight and traffic, to shave valuable minutes off their commute. Sometimes they’ll get stuck in narrow intersections. “No Trucks” signs are ubiquitous, but they’ve been of little use as deterrents.
* And the jobs? Lots of temp workers…
The only thing more common in Will County than the “No Trucks” signs are the hiring notices from temp agencies. The county is home to 99 in all—one of the highest concentrations of staffing agencies in the country. They share lofty, aspirational monikers, like Paramount, Accurate, and Elite. Amazon has its own preferred staffing agency: Integrity. […]
While “temp-to-hire” may sound promising, the latter stage of that progression can prove elusive. A full 63 percent of the warehouse workforce in Will County is temp labor or provided by staffing agencies. At a recent hearing in Joliet to deliberate the establishment of two new companies, one group claimed that only 23 of their 147 workers had been placed in permanent full-time jobs. “And that’s their own data!” said Roberto Clack, associate director of Warehouse Workers for Justice, a Chicagoland advocacy group. “I’m not sure we believe it’s even that high.”
* And future prospects for jobs? Not looking good for warehouses…
But when it comes to the long-term prospects for the region, optimism is scarce. Paul Buss’s son, who works as a building inspector in Joliet, told his dad there’s concern “these companies are gonna come in, they’re gonna build these buildings, and they’re gonna use them for however long they can get a tax break on them, and then they’ll move someplace else.” The threat of empty warehouses looms large.
So, too, does the threat of automation. In 2017, it was estimated that 20 percent of the work in any given Amazon warehouse is automated, a figure that is expected to rise. This fall, IKEA opened up a new warehouse, 1.5 million square feet in total. “Fully automated,” John Greuling told me, it will have about 200 employees. Incredulous, I counted all the spots in the parking lot: 226.
It’s not that Pritzker shouldn’t try to do this, it’s that he needs to make sure workers and communities are protected from the mayhem and refrain from being too generous with subsidies.
There’s so much more to the TNR story so go read the whole thing.
- Anonymous - Thursday, Jan 17, 19 @ 2:34 pm:
Rich, the same thing happened and is happening with the Gateway Commerce center in Madison County.
- Dave W - Thursday, Jan 17, 19 @ 2:40 pm:
Maybe the governor is unaware of the massive warehouse farm about 15 miles north of East St Louis at the 270 & 255 interchange on the western edge of Edwardsville. Massive million+ square foot warehouses galore, with more under construction right now. Full of tax abatements and subsidies, low wage jobs with high turnover, staffed by temp agencies.
- Blue Dog Dem - Thursday, Jan 17, 19 @ 2:46 pm:
All jobs in these districts should be subject to prevailing wage laws. Certified payrolls should be mandatory. This should be a no brainer for JB going forward.
- JS Mill - Thursday, Jan 17, 19 @ 2:51 pm:
=total tax abatement for two decades, until 2022.=
It is not like this is a new thing. when will these small towns learn?
- Anonymous - Thursday, Jan 17, 19 @ 2:54 pm:
Dave W. Not to mention my neighbors have found trash in their yards, our townships gravel roads tore to shreds by loaded semis(none of the repairs reimbursed, of course) and their homes getting flooded out due to the displaced water.
This reporting is spot on and thank you for helping to highlight this issue.
- Anyone Remember - Thursday, Jan 17, 19 @ 2:55 pm:
How much did IDOT spend for the elongated exit ramps on I-55 at Exit 244?
- Will - Thursday, Jan 17, 19 @ 2:56 pm:
They need to build the bridge there that has been discussed for years. Get those trucks funneled onto a bridge to the warehouses and off the local roads.
- TheInvisibleMan - Thursday, Jan 17, 19 @ 2:59 pm:
===when will these small towns learn?===
Not only are they not learning, one of them specifically is making even worse deals.
Back in November, the village of plainfield convinced the plainfield school district to make payments totalling $6M directly to the village - to help in the development of a warehouse project.
As bad as things are in Elwood, at least they didn’t use their school district as a slush fund.
When the fall happens, and it will, it’s going to be brutal for some much more than others.
For those who don’t know - at one point, Calumet City was one of the wealthiest parts of Illinois.
- Honeybear - Thursday, Jan 17, 19 @ 3:03 pm:
One reason for the East St. Louis is the high high percentage of Temp Agencies already here. I wouldn’t doubt it if the warehouses moved 15 miles over to ESL so that they can pick up on more EDGE, EZ Zone, and have an unending pool of Temp workers
That
don’t
have
to
take
busses
to Glen Carbon/Edwardsville.
No, I’m as serious as sepsis.
I’m the one who processes food stamps for those workers. Those warehouses chew through those poor folks like a John Deere mower.
Temp work is guaranteed instability
- Skeptic - Thursday, Jan 17, 19 @ 3:04 pm:
And the tree hugger in me points out the loss of precious farmland. They aren’t making any more of that either.
- Homer Simpson's Brain - Thursday, Jan 17, 19 @ 3:05 pm:
This subsidy scam for businesses to relocate or set up shop has to stop. Illinois has other urgent needs it can spend that money on like schools and roads. If we learn anything from that movie War Games it’s that the best move is not to play at all. Please let’s not play this subsidy game because we all know the taxpayers will get screwed again (e.g. Foxconn conned billions from Wisconsin taxpayers).
- Brendan - Thursday, Jan 17, 19 @ 3:05 pm:
Learning alot with this one. Thank you for posting this. JB needs to be very very careful how he proceeds. It’s almost as if every part of any employment opportunity bills need to be planned out to the smallest detail to prevent big companies from taking advantage of local leadership who may not be educated enough to move forward with such a big plan. This is insanity. We need to figure out a way to protect communities and people from big corporations who use everyone as pawns.
- Name/Nickname/Anon - Thursday, Jan 17, 19 @ 3:07 pm:
So as the future of employment. Unstable. Independent. Struggling to outpace automation.
- Lester Holt’s Mustache - Thursday, Jan 17, 19 @ 3:19 pm:
Someone like Pritzker should know better, but unfortunately we won’t be able to tell if he’s a complete dolt or not until he proves he can send the glad-handing corporate types packing when they come around with these scams. We got ripped off on the lottery deal, we got ripped off on the gambling machine deal, Chicago is getting ripped off by the parking meter deal and these smaller towns are getting ripped off on these warehouse park deals. This is almost as big a grift as taxpayer funded stadiums, and I for one have no idea if JB is smart enough to reject the slick sales pitches or demand clauses that hold companies accountable when the big promises don’t pan out. Probably not, but who knows maybe we’ll get lucky for once
- Brendan - Thursday, Jan 17, 19 @ 3:19 pm:
When I look at other states for a possible solution, I look at Washington State, their top employers, Amazon.com, Starbucks, Costco Wholesale, Boeing, Microsoft, Providence Health & Services, Barrett Business Services, Nordstrom, T-Mobile, Fortive all seem to be large companies who’s HQ’s are spread out throughout the state. With everything centralized in Chicago Metro, I’m not sure the southern part of the state will get anything but large warehouses. Maybe find a way to give incentive for companies to HQ downstate? How? That’s the question and where my limited expertise on the topic ends.
- OneMan - Thursday, Jan 17, 19 @ 3:31 pm:
Isn’t the logical end state for this primarily highly automated warehouses and driverless trucks.
Not sure how that is a big job creator.
- Dead Head - Thursday, Jan 17, 19 @ 3:47 pm:
What isn’t mentioned, is what impact this change on the environment. All of the vehicle traffic and the covering of thousands of acres with concrete, must have had an impact on air quality as well as temperature rise.
- CapnCrunch - Thursday, Jan 17, 19 @ 4:00 pm:
The folks in Elwood may not have it so good but the rest of Will county is doing fine. Data from the 2010 US Census and the 2012-2016 American Community Survey show that median household income in Will County is the 5th highest in the State at $77,500. (The State median is $59,200). Only Lake, DuPage and Kendall counties have a higher percentage of households with incomes over $100,000.
- DuPage Bard - Thursday, Jan 17, 19 @ 4:07 pm:
Huge subsidies with no guarantees?
Foolish, hopefully East St. Louis won’t make the same mistake.
- Leigh John-Ella - Thursday, Jan 17, 19 @ 4:15 pm:
When you are desperate for development at any cost that’s what you tend to get.
It’s not like corporate America has a conscience.
- Six Degrees of Separation - Thursday, Jan 17, 19 @ 4:43 pm:
There are a lot of things in play that made Will County what it is today. I think one of the biggest factors is that Chicago is the rail hub of the US, the largest area of vacant land near where the rail lines converge is Will County, and much of our manufactured goods now come from the Far East, where they are offloaded at the west coast and sent most efficiently by rail to where the stuff can be further distributed to where it needs to go, and there come the trucks and warehouse workers. Add the online shopping boom, where all this stuff has to be delivered, and you get what you got. Southeast Memphis, another perfect convergence of factors, is in a similar shape.
- Jake From Elwood - Thursday, Jan 17, 19 @ 4:57 pm:
The roads have been destroyed. Truckers violate all kinds of traffic laws and weight limits.
Hazardous materials have been found in some of the loads. Snarled traffic and pollution.
More Vendetta than Valhalla.
- Six Degrees of Separation - Thursday, Jan 17, 19 @ 5:08 pm:
===Isn’t the logical end state for this primarily highly automated warehouses and driverless trucks.===
Lots of jobs will shift in the next 20 years, not just in the logistics industry. Just about everything that can be done with manual labor could theoretically be done by a machine, and a lot of “smart people jobs”, too. But someone will need to keep these machines running and program and re-program them for the task at hand, so there’s that.
- Soccermom - Thursday, Jan 17, 19 @ 5:38 pm:
That article was so well done.
- Brendan - Thursday, Jan 17, 19 @ 6:25 pm:
I shared this one on my Facebook.
More small town politicians need to see this and be aware of the dangers
- RNUG - Thursday, Jan 17, 19 @ 7:01 pm:
I guess Springfield was lucky they didn’t go all in on Kayport Package Express and that it quickly folded … /s?
- Blue Dog Dem - Thursday, Jan 17, 19 @ 9:41 pm:
Just a couple ideas for JB to consider. If ya can’t get yourself to go with prevailing wage, how bouts your $15/ hr in all future TIFs, enterprise zones, EDGE eligible. But I would just as soon tell you to stay with governments core responsibilities.
- the Patriot - Friday, Jan 18, 19 @ 8:40 am:
Try Cairo first Governor. Rail, interstate, and 2 Rivers. You also have a fraction of the existing population to deal with and land is a fraction of the cost.
No other industrialized nation in the world has the confluence of its two most major rivers basically a useless wasteland. it is the biggest wasted natural resource in the State, perhaps the nation.