Streets of Caledonia

Payne Family Homes plans a $400 million commercial development along Highway 40 in O'Fallon, Mo. (Site plan via engineering firm Cochran)

For residential developer Payne Family Homes, the project marks its first foray into commercial development. The company is launching a commercial real estate division to lead the project.

“Payne has built beautiful neighborhoods for 10 years now, full of people who want convenient access to work, grocery, shopping, and other amenities,” Ken Kruse, Payne’s president, said in a statement. “Bringing commercial into our portfolio makes sense as commercial and homes go hand-in-hand.”

The $400 million development, tentatively branded as “the Streets of Caledonia,” calls for 25 acres of retail development and 80 acres of office, medical and hospitality space, as well as senior housing. Planned is an anchor grocery store, retail centers, a convenience store, a pharmacy, an urgent care center, an independent living facility and high-end multifamily housing.

The project would be just east of O’Fallon’s planned 55-acre O’Day Park, which the city expects to begin construction on next month. Plans for the park include trails, a ropes course and a bird-watcher’s garden.

Payne plans to break ground next year on the commercial development and build it out over about five years.

The property slated for development is largely owned by THF 40 DD Development LLC, an entity affiliated with developers Stan Kroenke and Michael Staenberg, whose long business relationship developing suburban shopping centers dissolved amid disagreements and lawsuits.

Kroenke is the owner of the Los Angeles Rams.

Payne is listing 25 acres of retail space with commercial real estate broker NAI DESCO, and 60 acres of mixed use space along the highway is listed with Gershman Commercial.