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Railroad opportunities

Hoffman Transportation warehouse a start for economy development

COAL CITY – A transportation company’s expansion south of Coal City along the Union Pacific railroad could mean similar expansion in the area and is already attracting at least one business from the suburbs.

Hoffman Transportation entered into a redevelopment agreement with the Village of Coal City in May of 2017 to open a facility south of Coal City along Reed Road. It included a new building of 415,000 square feet, 20 new rail sidings and infrastructure improvements from the village to the site.

The project was estimated to cost more than $12 million.

“They’re building what’s called a trans-load location,” said Coal City village administrator Matt Fritz.
“It’s focused on getting goods out of the Gulf of Mexico ... They are starting a new location on the Union Pacific that is much like their current location in Channahon.”

The Channahon location for Hoffman Transportation, Fritz said, is along the BNSF railroad.

Hoffman Transportation focuses on bulk shipments of dry and wet goods, according to the company’s website, including plastic pellets, antifreeze and other automotive fluids.

In Channahon, the company has rail sidings allowing shipments to come off the mainline and next to trucks, where they can offload their cargo onto trucks to ship to other destinations.

“They suck out the contents from that train onto their trucks,” Fritz said.

At the Coal City facility, in addition to the rail sidings allowing for offloading, the warehouse where Hoffman can break down the load into smaller sizes, such as pallet-sized orders rather than truck-sized orders.

Nancy Norton, president and chief executive officer of Grundy County Economic Development, said there is the opportunity for more growth in the same area in the industrial parks.

“That Union Pacific spur is under utilized,” Norton said. “There is land in that area to accommodate economic development.”

Since Hoffman and the village made their agreement in May 2017, Hoffman has purchased additional properties
in the area with plans additional expansion. The planned unit development includes the current building at Phase 1.
Phase 2 is a nearly identical building next to it. A third building is planned, but would require an additional process because the parcel is greater than
10 acres in size.

The village held a public hearing on July 30 to discuss added properties Hoffman has acquired since May 2017 and providing them the conditional uses the original property received.

“There are specific conditional uses in the code that you don’t have by right just because you have industrial zoning,” Fritz said.

In May 2017, Hoffman had two parcels. Since then, it has acquired four more parcels and needed industrial zoning and conditional uses attached to that new property. Fritz said the crowd at the hearing was mostly asking questions about plans and whether or not the village considered specific situations.

“We actually had a resident who was adjacent ... in unincorporated Grundy County who state they were purchasing the property for a future home site, and it doesn’t seem as though a future home site is mixing with all of these uses that are coming in,” Fritz said.

About seven total neighbors showed up for the hearing, he said.

The site is attracting from business elsewhere. On July 28, the Daily Herald reported that the M. Holland Company completed relocating the its warehousing operations in Northlake to Coal City, through its partnership with Hoffman Transportation. M. Holland said it immediately expected an improvement in rail transit times.

Norton said teamwork with the railroad, county and village has helped make the area an opportunity for businesses.

A chunk of the benefits Coal City will comes from the fact that he Hoffman site is within Coal City’s tax increment finance district.

When a TIF district is formed, a fund is created by the municipality. Tax revenue from land-value increases on properties caused by development within a TIF that otherwise would have gone to school districts, county government or other local taxing bodies instead goes to the TIF fund. That money then is used to pay for incentives and infrastructure upgrades to attract businesses to a blighted area.

Fritz said the city plans to use that TIF money to road improvements and sewage and sanitation expansion.

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