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The city of Columbia Heights and Alatus are partnering to purchase 4300 Central Ave. NE, where Hy-Vee planned to build a new grocery store but has since terminated the project. (Photo by Will Rottler, city of Columbia Heights)

Hy-Vee’s plans to build a new grocery store in Columbia Heights have fallen through, but a new project may be taking over the site with help from the city.

In 2016 Hy-Vee purchased the Central Valu Center, former home of Rainbow Foods at 4300 Central Ave. NE. At the time, the city of Columbia Heights approved plans for a portion of the Central Valu Center to be redeveloped into a 95,000 square-foot Hy-Vee grocery store and restaurant.

The city also approved plans for Hy-Vee’s Fast and Fresh Convenience Store and Gas Station, to be located at the northeast corner of Central and 47th Avenue.

The development company Alatus — which is partnering with the city of Columbia Heights to build the city’s new 20,000-square-foot City Hall as part of a mixed-use development at 3989 Central Ave. NE — contacted Hy-Vee in January to discuss partnering on a project at the Valu Center site. Hy-Vee declined the request.

According to Columbia Heights Community Development Director Aaron Chirpich, Hy-Vee has decided not to follow through with its plans to develop a new grocery store, due to factors unknown to the city, and is planning to sell the property.

Chirpich said Alatus informed the city in January that Hy-Vee was going to sell the property. Alatus then proposed to partner with Columbia Heights to redevelop the site, and the city agreed.

Alatus negotiated a purchase agreement with Hy-Vee for the 13-acre property and plans build a mixed-use development.

Alatus has created preliminary plans for the site. The initial proposal includes:

• Between 20,000 and 60,000 square feet of retail space anchored by a grocery store on the east side.

• 400-600 market-rate apartments on the east side above the retail space.

• A substantial city park and public open space amenity at the center of the development.

• Significant upgrades to area infrastructure for stormwater and sanitary sewer utilities.

• A low-density, single-family housing development on the west side of the property.

• Underground parking.

• Environmentally sustainable amenities, such as solar panels, rain gardens, and high efficiency heating and cooling.

Alatus invited both Hy-Vee and Ace Hardware to be folded into the project, but it’s too soon to say how those conversations will play out, according to a statement from the city.

During a closed session Feb. 1, the Columbia Heights Economic Development Authority discussed Alatus’ preliminary plans for the site and debated the acquisition strategies for the property. The EDA determined that the preferred route would be for Alatus to acquire the site rather than the EDA, Chirpich said.

The city and EDA are now looking to establish a tax increment financing district to support the project.

Under the current schedule, Alatus will close on the property in July and seek land use approvals in late 2021 or early 2022, with an expected groundbreaking in the spring of 2022 for the first phase of the project.

Since the Feb. 1 EDA meeting, city staff has worked with the EDA’s redevelopment council and Alatus to create a preliminary development agreement, which was approved by the EDA May 3. The agreement outlines the concept plan and says the EDA will explore the use of TIF bonds to support the project. It also says Alatus will reimburse the EDA for pre-development planning costs, including consultant costs for establishment of a new TIF district.

Chirpich said there will be several City Council and EDA meetings in the coming months to address various approvals that are part of the project. At the Monday, May 24, City Council meeting, city staff will present a draft loan agreement and framework for the financing requested by Alatus.

The city will seek public feedback on the project as plans move forward. The city is particularly interested in public input on the park portion of the project, which will constitute a new city park in an area that otherwise doesn’t have one.

The project has the potential to grow the city’s tax base considerably and could attract future investments from other developers, according to a statement from the city.

For updates on the project, visit columbiaheightsmn.gov/development.

Hy-Vee did not immediately respond to a request for comment on the site. 

Something I wanted to chat about on Friday, but didn’t get a chance to address the Columbia Heights topic. Hy-Vee Director of Public Relations Christina Gayman did provide a comment a couple of weeks later.

"I think it’s important to note that the city has always been supportive of a Hy-Vee grocery store at this location," she said. "The city and the developer have both approached us several times about being part of this redevelopment project. After much consideration, we felt that selling the original property was the right thing to do for the community based on the plans. We remain in conversation with the city about possible opportunities going forward."

 

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