Montgomery Village Board moving ahead with annexation of former Caterpillar plant

Village of Montgomery staff and the owners of the former Caterpillar, Inc. plant at 325 S. Route 31 have completed negotiation on an agreement to annex the approximate 360 acre plant site to the village.

In a unanimous ballot Monday evening, Dec. 13, the village board voted to accept a recommendation in support of the annexation from the village’s planning and zoning commission.

Village President Matt Brolley said the board will consider a series of ordinances annexing and zoning the property to the village at a future meeting.

Reich Brothers Inc., a White Plains, New York-based firm that specializes in redeveloping industrial properties, purchased the 4 million-square-foot plant from the heavy equipment manufacturer for $68.5 million in March 2020. The plant, which Caterpillar opened in 1957, is currently situated in unincorporated Oswego Township but is contiguous to village limits.

Reich Brothers has renamed the property “The Grid” and is marketing it as an industrial park to new industrial tenants.

In addition, Reich Brothers has asked the village to designate the plant site as a Tax Increment Financing (TIF) district as part of its effort to attract new industrial tenants to the plant.

In a memo to the board, Sonya Abt, the village’s community development director, said the annexation agreement, which was negotiated over the past year, includes the following provisions:

•Roads on the site will remain private. However, the village shall have the right to request the dedication of Caterpillar Drive in the future.

•Granting of a bike path easement along Caterpillar Drive.

•Water supply will remain private. However, the owner may request and the village may permit the connection of the property to the village’s water supply and distribution system and supply water. The cost of the connection will be the owner’s.

•Zoning: M-2 zoning under terms of a planned unit development (agreement), grandfathering existing uses without additional special use hearings; outdoor storage; and flexible B-2 zoning for certain areas.

•Transition of permits/permitting from Kendall County to the village.

•Allowing existing nonconforming structures to remain.

•Allowance for the extension of Galena Road to serve the property at a connection point along the west property line.

•Waiver of annexation and final plat fees.

•Village to conduct a TIF Study and adopt TIF if it meets criteria.

•Disconnection: Allows the owner to petition to disconnect any or all of the subject property if the village fails to enact a TIF within 18 months after annexation of the property.

If the plant is annexed to the village and designated a TIF district as now planned, its assessed value would be frozen at a base level for up to 23 years. Reich Brothers would continue to pay property taxes to local taxing districts at that base assessment level. However, any assessment increases on the property beyond the base level during that same period of up to 23 years would be placed in a TIF fund that would be administered by the village and used to pay for improvements to the plant site.

In a letter to Brolley earlier this year, Bernard Citron, an attorney for the property owners, said his clients are seeking TIF district status for the plant in order to rehab and reposition the 60-year-old facility “into a modern industrial development” that will house multiple tenants involved in industrial manufacturing and distribution.

Citron said his clients estimate the potential TIF-eligible expenses on the plant site at about $50 million.

“Due to the Illinois property tax structure, there is a need for TIF incentives to balance the cost of improvements and the rental structure available on the campus [plant site],” Citron said.

Medical glove manufacturer among plant’s new tenants

In August, U.S. Medical Glove Company LLC announced that it had signed a 15-year lease for about 1 million square feet of the plant located at Route 31 and Caterpillar Drive in Oswego Township to serve as a nitrile glove machine fabrication and glove production factory.

The firm is the only manufacturer of American-made nitrile glove machines

By making the machines in the same building as the gloves are made, USMGC can ensure the most stable and reliable supply of Nitrile gloves in the world, the firm said in a statement.

“American customer service, reliability and quality control can only be delivered by eliminating dependence on foreign-made machines, not just foreign-made gloves,” U.S. Medical Glove CEO Dylan Ratigan said in the statement.

The new USMGC factory will house up to 80 American-made nitrile glove machines, capable of supplying 8.1 billion gloves annually. In addition, the factory will house 12 chemotherapy specialty nitrile glove lines, producing 1 billion chemotherapy rated nitrile gloves each year.

“The strategic vision of four major integrated machine making and glove making hubs will provide more than 3,000 direct jobs and 10,000 indirect jobs to be created in the U.S.,” the statement said.