Land of Lincoln Posted Full Tilt Growth in 2008

After shattering records in 2006-2007, the development pipeline for Southwestern Illinois continued to swell over the past year, reaching a new high of more than $9.4 billion, according to the Leadership Council Southwestern Illinois. The organization’s 2007-2008 Market Review and Investment Update shows the total value of projects announced, under construction, or completed during the reporting period ending September 30, 2008 up more than half a billion dollars over the prior year.

The record total includes some highly speculative proposals, such as the $1 billion Martin Aviation luxury office proposal for the Cahokia airport. Nonetheless, the council suggests the metro east has escaped the national economic downturn.

“In the midst of all the pessimistic news about the slow down in the economy, we’re pleased to report that developments were still moving full steam ahead in Southwestern Illinois during the past year,” said Suzanne Butler, president of the Leadership Council, the member-based, economic development corporation that compiles the economic data for Madison and St. Clair counties. “The continuing investments across so many sectors of our economy reaffirm Southwestern Illinois’ position as a prime midwestern development location.”

Among the highlights from this year’s report:

•  $2.5 billion in projects were already under construction as of the end of September 2008, and $6.1 billion in additional announced projects included the multi-billion dollar investment at ConocoPhillips, which moved forward later in the fall. In one note of caution, the reports notes that continuing to move projects through the pipeline will be dependent upon solid support from and cooperation with local, national and international funding sources.

•  At $6.46 billion, industrial investments represented the largest chunk of the development pipeline.

•  Commercial investments topped $1.3 billion for the second year in a row, with 87 different projects contributing to the total. Approximately $164 million of the total represents projects already completed, while two thirds of the total consists of projects under construction. Although the pipeline includes over a quarter billion dollars in projects announced, that number is down $60 million from the year prior, an indication that the commercial sector may be slowing a little as the nation’s economy continues to struggle. Collinsville and O’Fallon remain the two cities with the largest number of projects, 13 and 15 respectively, while the top five projects in terms of investment size can be found in Dupo, Collinsville, Belleville (2) and Shiloh.

•  Totaling $331.3 million, institutional investments posted a 63 percent increase over the prior year, the largest percentage increase among all the sectors. This sector includes hospitals, medical centers, non-profits and senior housing facilities. Over $200 million in healthcare projects alone drove the impressive increases in the institutional sector, which has seen three years of back-to-back growth.

•  Office investments totaled $217.7 million, climbing almost 23 percent over the prior year’s record total and representing the third consecutive year of investment growth. Almost $62 million in new office projects were delivered during the 12-month reporting period, a 33 percent increase in projects completed compared to the prior year. Collinsville serves as home to one-fourth of all the new office projects moving through the pipeline.

•  Topping out at $439 million, total investments in the educational sector remained steady over the past year. While the overall investment numbers remain strong in the educational arena, the total value of announced projects decreased by 33 percent compared to the prior period. $262 million of the projects on this year’s list are K-12 facilities, while $177 million represents investments in higher education projects. The three largest projects under construction, totaling $93 million, are K-12 projects.

•  Public investments (excluding transportation) soared to $648.7 million, up 56 percent from last year. This 56 percent gain was on the heels of a 45.5 percent increase the year prior, with projects again ranging from basic infrastructure improvements to recreational amenities to public safety projects. Projects at Scott Air Force Base accounted for $180 million, or more than one-quarter of the total. With over $600 million of the public projects under construction or yet to break ground, investments in this sector should continue to positively impact the local economy for years to come.

While the numbers paint a very positive picture for the region, Butler said that sustaining the high level of economic activity will require that new challenges brought on by this growth and the current financial and economic conditions of the country continue to be addressed. “The Leadership Council remains confident that individuals from business, industry, government, education and labor will collaboratively address those challenges in a way that moves our region forward,” she said.

The 2007-2008 Market Review and Investment Update is available online at http://www.siteselection-il.com

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