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$18M warehouse planned for Tinley Park

A developer plans to build a 300,000-square-foot warehouse/distribution building on this land in Tinley Park immediately south of Interstate 80 and directly west of Ridgeland Avenue. (Mike Nolan/Daily Southtown) (Mike Nolan / Daily Southtown)

officials have agreed to support a tax break for construction of a 300,000-square-foot warehouse/distribution building planned for a site directly south of Interstate 80 and north of the Hollywood Casino Amphitheatre.

The Village Board is supporting a Class 8 incentive for Hillwood Properties, which would reduce the property tax assessment level on the project.

At Tuesday’s meeting, trustees also approved a resolution that would renew a Class 8 tax cut for another Hillwood-owned building that helped keep a major employer from bolting Tinley Park.

That building, 18801 S. Oak Park Ave., is more than 900,000 square feet in size and is immediately west of where Hillwood’s new building would be located.

The existing building is leased to M. Block and Sons Inc., a Bedford Park-based logistics company that supplies retail outlets with products including Keurig coffees and coffee makers.

Hillwood was in the process of renewing M. Block’s lease and the distribution firm was considering relocating to Pennsylvania, according to Patrick Hoban, Tinley Park’s economic development manager. Having the tax break renewed benefits M. Block as far as its lease costs and aided in Hillwood renegotiating a lease with the company, Hoban said Thursday. M. Block employs about 275 people at that distribution location, he said.

Knowing it was keeping a tenant in the larger building also convinced Hillwood to move ahead with plans for the 300,000-square-foot speculative building, Hoban said. Typically, developers will proceed with a large warehouse/distribution project only if they have a tenant lined up to occupy it. Committing to a speculative building reflects Hillwood’s confidence in the demand for logistics space, Hoban said.

The new building will be on a nearly 22-acre site, directly west of Ridgeland Avenue.

Hillwood plans to invest about $18.1 million in the speculative building, which could house one or more tenants, according to the village.

The company anticipates the development would create as many as 100 construction jobs and 340 permanent jobs tied to the ultimate users of the building.

The Class 8 incentive reduces the Cook County tax assessment rate from 25 percent, which is the rate applied to industrial and commercial property, to 10 percent, which is what homes are assessed at, for a period of 10 years. The incentive is renewable. According to the company, the reduced assessment rate would not take effect until after the building is completed.

Hillwood expects construction to begin sometime this summer and be completed in about a year.

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