Montgomery annexes former Caterpillar plant site, OKs TIF district designation

It’s official, the former Caterpillar Inc., plant on Route 31 is now situated in the village of Montgomery’s corporate boundaries.

In addition, the village has designated the 360 acre plant site a tax increment financing district to help spur the property’s redevelopment.

The Village Board voted to approve the annexation agreement with project developers 325 S. Route 31 LLC and the TIF district during a meeting Monday, Jan. 10, at Village Hall. The board approved the TIF district and annexation agreements in a series of 5-0 ballots. Board member Theresa Sperling was absent from the 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. 325 S. Route 31 is a limited liability company established by Reich Brothers to manage the redevelopment of the former Caterpillar property, according to the village.

Caterpillar opened the plant on the village’s doorstep in what was previously unincorporated Oswego Township in 1957.

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

Village Board member Dan Gier thanked the developers and village staff for their work in negotiating the annexation and TIF district agreements, describing their efforts as “amazing.”

Board member Steve Jungermann agreed with Gier.

“It looks like we breezed through this with our votes [tonight] and stuff, but this has been months and months of hard work by everybody,” Jungermann said. “There has been a lot of discussion, but, more importantly, cooperation by everyone involved. It’s just fantastic.”

Bernard Citron, an attorney for the developers, thanked the board and village staff for their work on the annexation.

“We thank you and look forward to a long, continued occupancy in your town,” Citron said.

Citron noted that the annexation negotiations preceded the board’s hiring of Sonya Abt as community development director. Abt succeeded Richard Young who retired as the village’s development director last year.

Citron said Abt “ably took this over and made this happen.”

Citron also said that his clients’ effort to attract new industrial tenants to the plant are already yielding positive results with the U.S. Medical Glove Company beginning operations in a portion of the plant.

In August, USMGC announced that it had signed a 15-year lease for about 1 million square feet of the plant to serve as a nitrile glove machine fabrication and glove production factory.

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, according to the firm.

The TIF district designation means the assessed value of the plant site for property tax purposes will be frozen at a base level for up to 23 years. The developers will 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 will 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 Village President Matt Brolley early last year, Citron said his clients were seeking TIF district status for the plant site 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.

“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 wrote.

A subsequent study conducted by Teska and Associates of Plainfield, a land planning firm, determined the plant site met criteria under state law for TIF district designation.