Neighborhood News

Published February 6, 2020 By Justin Kerr

Demolition is imminent for the former Wrigley factory site at West 35th Street and South Ashland Avenue, clearing the way for a last-mile shipping warehouse similar to other new commercial development nearby. The South Branch Commerce Center at 3535 S. Ashland Ave., Chicago, looks to rise this summer and provide space to tenants by the fourth quarter of 2020, said John Basile, senior vice president with NAI Hiffman, the commercial real estate firm managing the property.

“We really believe this site locationally is second to none,” Basile said, listing factors that make this part of the McKinley Park neighborhood extremely attractive for last-mile shipping facilities. “There are a lot more people living downtown,” he said. “More [businesses] want to be in that last-mile market for a global city.”

From Gum to Logistics

A 3D mass rendering of the South Branch Commerce Center displays the development's prospective site profile and layout.For nearly 100 years, the sprawling factory site stretching along West 35th Street between South Ashland Avenue and South Iron Street manufactured gum and other confections for the Wm. Wrigley Jr. Company. It was shut down following the 2005 acquisition of the Wrigley Company by Mars Inc., then listed for sale in 2009. It has remained shuttered since its closing.

In 2012, Wrigley sold the property at a discounted price to a sole-purpose company managed by three businessmen based in Lombard, Illinois: James Avergis, Bradley Gdowski and Stewart Mills. They retained the entire site until they sold 13 acres of its eastern end to ComEd for a training facility, now in active use at 1415 W. 35th St. They still own a portion of the original site facing Ashland Avenue.

The current owner and developer of the South Branch Commerce Center is Karis Industrial (a division of Karis Capital, LLC) with financing from the Stonemont Financial Group. NAI Hiffman is handling property marketing and management from its offices in Oakbrook Terrace, Illinois, with construction by general contractor Development Solutions, Inc. and demolition by the American Demolition Corporation.

The finished site will offer a 260,000-square-foot warehouse with at least 60 exterior truck docks, four drive-in doors, a speed bay, a truck court and parking spots for 113 trailers and 458 cars. The site occupies a total of 16.38 acres. Basile estimated that between one and four tenants will occupy the site.

Market Forces

“I thought for sure this would have been retail,” 11th Ward Alderman Patrick D. Thompson said of the property. Although an 11th Ward-led zoning change would have allowed a retail use for this part of Planned Manufacturing District No. 8 – an area the City of Chicago has earmarked for commercial and industrial development – the market never panned out, Thompson said.

“The retail market is a little skittish,” he said. “The interest that’s been the hottest has been industrial.”

Thompson noted that the property’s use as a warehouse and shipping facility is as-of-right and required no changes to its current zoning. “It’s going to be a great improvement,” he said. “Time to take down that eyesore.”

Community Engagement

The shuttered Wrigley factory has long been the biggest source of blight in the McKinley Park neighborhood and has often been brought up as a topic at community meetings. McKinley Park Civic Association President Agnes Bednarkiewicz has frequently spoken of attempts to get information or inspire movement for the long-vacant property.

McKinley Park Development Council President John Belcik said the group was disappointed that no input or engagement was sought prior to development of the project. “Areas along major bus routes such as Ashland should be considered for mixed use and [transit-oriented development],” he said.

A site map displays the prospective layout of the last-mile shipping warehouse and surrounding grounds and parking.“This location is in the transition zone both between 11th and 12th wards and also between residential and industrial zoning,” he said. The soon-to-be-released neighborhood plan from the council and the Chicago Metropolitan Agency for Planning (CMAP) will likely suggest transit-oriented development or mixed use for this area, he said.

Traffic Effects

The impact of additional truck traffic “will depend on the end user who goes in there,” Basile said. He noted, however, that the development does not “maximize” the site plan: “We’re not putting in the biggest building possible.”

Thompson said that traffic impacts were typically lessened for existing commercial and industrial corridors that already support that type of traffic. “There’s a pretty good understanding of what the truck traffic is going to be,” he said.

Basile also noted the anticipated use of public transportation by the commerce center’s labor force as a factor that could mitigate extra traffic from commuting workers.

Workforce Advantage

In addition to its proximity to major transportation infrastructure, the area offers big workforce advantages, Basile said. “Labor is really becoming such a significant driver in site selection.”

“We have a great workforce in that neighborhood and surrounding market,” Basile said. The center’s marketing materials highlight the tens of thousands of prospective workers living within a mile of the facility.

“Access to public transportation also sets this property apart,” Basil said, noting that this in turn allows for pulling from a larger pool of labor.

Balancing Act

Thompson said that the pending last-mile warehouse will be a good use of the property. “We have a very vibrant industrial-manufacturing district,” he said. The site’s existing industrial zoning, its longtime history as an industrial area and the Interstates, rail infrastructure and major thoroughfares nearby all contribute to such use, he said.

“This is a location that’s appropriate,” Thompson said. “We balance that with new residents coming in. We can manage and have a balance between the two.”

Facilities like the new center will commonly create 100 to 200 new jobs, Thompson said, as well as generate a lot of tax revenue. No Tax-Increment Financing funds were used for the new development, he added.

“We need a mix of residential and industrial-commercial-retail,” he said. “It’s what makes Chicago one of the world’s unique cities, in that we have a unique workforce.”

A rendering of the South Branch Commerce Center development displays the property's footprint in the Planned Manufacturing District.