Developer plans $68.5 million revamp of Union Tank Car site

2014-04-01T19:19:00Z 2014-04-02T19:08:22Z Developer plans $68.5 million revamp of Union Tank Car siteJoseph S. Pete joseph.pete@nwi.com, (219) 933-3316 nwitimes.com

EAST CHICAGO | A massive $68.5 million project will transform the vacant, debris-littered Union Tank Car Co. site in East Chicago into a major business park with more than 1 million square feet of space.

Developer MZG & Associates, which is owned by south suburban steel executive Michael Goich, is planning a redevelopment project that eventually could bring as many as 800 factory and warehouse jobs to East Chicago, city officials said. An abandoned 50-acre site at 300 W. 151st St., where Union Tank Car used to make railroad cars, will be built up into an industrial campus called Suppliers Park.

"There's going to be some significant job creation for East Chicago residents," City Corporation Counsel Joseph Allegretti said.

Goich, who owns the Harvey-based strip mill plate processor LB Steel, wants to move his business across the state line because of a better business climate and tax rate, Allegretti said.

"He has a big operation in nearby nearby Cook County, plans to build four or five buildings, significant structures with a lot of equipment and overhead cranes," he said. "He's a successful businessman and entrepreneur. He wants to leave the state of Illinois and set up operations in Indiana." 

His company would employ 400 to 450 workers, including at least 200 East Chicago residents, Allegretti said. The goal is to bring several more manufacturers and distribution companies to the industrial park.

East Chicago Mayor Anthony Copeland is asking the City Council to create a tax increment financing district that would capture 75 percent of the new property tax revenue generated by the redevelopment and use it to pay off debt on the project. Under the proposal, about 20 percent of the additional property tax income still would pass through to the city and other local governments, while 5 percent would be set aside for job training programs for city residents.

The company would have to employ at least 200 East Chicago residents to claim the full financial benefit of the incentive, and it would get less if it employed fewer city residents than promised, Copeland said. The business will partner with Ivy Tech Community College to design a training program of four months or less that will prepare East Chicago residents for the work, which will require skills such as welding.

"Are these the types of jobs that fit our community, that are well-paying jobs that support a family? Yes," Copeland said. "Are they mentally based on two-year degrees or less? Yes. I think it's a win-win situation for the city of East Chicago."

MZG & Associates already has purchased the weed-strewn property at 151st Street and Railroad Avenue, north of the East Chicago Industrial Center and near several other factories and steel service centers. Union Tank Car once employed more than 600 workers there, until it closed its factory and left town in 2008. The plant where workers built more than 75,000 railroad cars over a span of decades since has been demolished.

At least $2 million in environmental cleanup work is still needed at the site, Allegretti said.

MZG & Associates plans to build three to six new buildings, which will range in size from 100,000 square feet to 500,000 square feet. The developer estimates that between 300 and 800 workers ultimately will be employed at Suppliers Park, once it is fully built.

Construction on the initial phase could begin in six to eight months.

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