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BLOOMINGTON — A Chicago real estate developer wants houses — instead of warehouses — at the former Chicago & Alton Railroad shops complex on Bloomington’s west side.

Joe Segobiano, a Bloomington native, said he has always wanted to see the 50-acre site roughly bounded by Morris Avenue, Seminary Street and the Union Pacific Railroad tracks redeveloped into houses. 

“From a neighborhood stand-point, I don’t see a lot of truck traffic through there and industrial uses would push the neighbors out,” said Segobiano, managing partner of the Chicago-based Hudson Burnham real estate developers.

The price of the land has to be reasonable so the price of houses can be in the range of $130,000 or lower, Segobiano added.

The shops complex — a busy center of local industry for nearly 100 years — has been vacant since the 1970s when the last tenant, an asbestos plant operated by UNARCO, closed.

St. Louis-based developer Jerry Leigh acquired the land through a legal battle in the 1990s. Leigh’s plan was to turn the site into the Railroad Commerce Center, a $50 million development of warehouses and office space. But those plans stalled and recently the city of Bloomington has been looking at attracting development to the site.

The extent of, if any, environmental issues is unclear issue among the owners, local engineers and the city.

Leigh said he has been told housing is not possible at the site. “I have had opportunities to put student housing duplexes there which would have certainly upgraded the neighborhood and supplied housing for married students but the site was not suitable for that use,” Leigh said.

Bob Kohlhase of Bloomington-based Farnsworth Group, who has worked on the site, said much of the clean-up was taken care of years ago by the railroad. An area where diesel fuel and oils were found in the soil is now part of AgRail, which built grain silos on the south end of the property in 1999.

Areas still need to be checked, but Kohlhase said no new problems have come up.

Meanwhile, City Manager David Hales said the city is still waiting to learn whether it will get $150,000 federal money for a $300,000 redevelopment study. Lobbying for the money was part of a Economic Development Council of Bloomington-Normal trip to Washington, D.C.

The study would look at use and rezoning. Environmental studies would be limited, Hales said.

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