CHARLESTOWN, Ind. (WDRB) -- A new multimillion-dollar wastewater treatment facility will impact thousands of people and contribute to the ongoing growth of one southern Indiana city.

The sewer system in Charlestown, Indiana, hasn't been updated in 80 years, since the area housed an ammunition plant. Now, leaders are working to catch systems up in a city that's growing by the day.

Crews held a groundbreaking Tuesday afternoon on the $40 million wastewater treatment plant, located on Charlestown Landing Road next to the current facility. It's the latest in infrastructure improvements for the city.

"That boost in the arm, that shot in the arm, is really ... it's the help they needed to keep wastewater affordable both for industry, commercial, retail and for the resident," said Joshua Hillman, with Dan Cristiani Excavating.

Hillman said the new treatment facility will have a huge impact on any new development in the city, including the 600-acre Shadow Lake project off Highway 62 that's under construction.

"We've got 330 acres here in Shadow Lake Park," Hillman said. "Everybody has reached out, they all want to be a part. 'Hey, do you have 100 acres of land, hey do you have 50 acres? Can we be there? When is the land going to be ready?'"

Next door to the facility is the massive River Ridge Commerce Center, the source of much of the area's population boom, now at 8,900 residents.

"From a resident perspective, we'll be looking at over 10,000 in the next five years," Charlestown Mayor Treva Hodges said.

The facility will treat 4 million gallons a day, twice as much as the current one, but it will be constructed to eventually facilitate 8 million. Leaders said the "modular layout" of the new plant will allow it to be expanded if needed. 

The city's utilities director said in a news release Tuesday that the old plant will remain in operation until the new facility is complete, and that the "tie-ins" from the old plant to the new one will be done without services being interrupted. When the new plant is complete, city leaders said "most" of the old plant will be demolished, while some areas will be transformed. 

"To say we expected it, River Ridge has been going for quite some time, but everything is finally reaching the Charlestown end and it is just crazy, the speed at which it is happening," said Hillman.

A state READI Grant will cover $9 million, and River Ridge has gifted $12.5 million for the project. The city will also use $1.5 million in funding from the American Rescue Plan Act. The rest of the funding will come from other grants and from a city reserve, all to ensure rates will not increase.

"It's great to have that support from the state, it's great to have that support from the region, and it is great to have that support from our partners at River Ridge as well," said Hodges.

There are also plans for a brand new interchange over the railroad track off of State Road 62. Now that the treatment facility project is underway, developers will be able to invest even more to the area.

"When you meet with residents, whether it's Jeffersonville, Charlestown, other places, they are all going to tell you 'Hey, we want that sit-down restaurant, hey, we want that shopping center.' But it takes the jobs, it takes the homes and then those things happen," Hillman said.

The $40 million project is expected to take about two years to complete. City leaders said their goal is to have it up and running during the later part of 2025. The long-term private investment from the project is expected to be $1.4 billion.

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