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Austin Hy-Vee Distribution Center Project No Longer A Reality

March 06, 2019 07:29 PM

(ABC 6 News) -- Grocery store chain Hy-Vee's plans to build a distribution center on Austin's west side are officially off the table at this time, a company representative and city leaders confirmed Wednesday.

In a statement, Hy-Vee said the project was canceled "after evaluating recent changes in consumer shopping and lifestyle behaviors."

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"Our newer facilities that opened in Ankeny, Iowa, and Chariton, Iowa, will assist with supplying fresh items to Hy-Vee’s locations and eliminate the need for an additional distribution center at this time," the company said.

In September 2017, the company announced it was considering a 150-acre site on Oakland Avenue just north of Interstate 90 for the one-million-square-foot distribution center. Two months later, the project was delayed after Hy-Vee said it was evaluating whether the distribution center was needed.

In a news release, Mayor Tom Stiehm called the company a "great partner" on the project, which, "only make(s) the news that much harder to take."

“Austin was considered amongst several other site locations and we can stand confidently that Austin was the finalist in a highly competitive environment for the distribution center," Stiehm said. "We’ll still be ready should Hy-Vee reconsider, but we know other companies will take note and I feel strongly there will be other projects that come our way because of the solid ground we put forward as a community.  We’ve shown businesses that we’re ready to partner with them on economic development ventures.”

City Administrator Craig Clark said he had remained "stubbornly optimistic" the project would eventually come to fruition despite being put on hold.

Even though the project won't directly bring jobs and growth to the city at this point, Clark said the multi-year process taught city leaders a lot about the development process and ways the city can prepare for a proposal when competing with other municipalities.

"Business development, it seems like it will go on and they’ll be talking about it for some time but once they make the decision, they want to go quickly, so having our partners being able to make those quick decisions, having those things thought through I think will be incredibly important when we get the next project that we’ll hear about," he said.

When the project was announced, neighbors had expressed concerns about traffic and impacts on nearby property values. When delaying the project in November 2017, Hy-Vee said those concerns did not factor into the decision.

One of those concerned neighbors, Jeff Brinkman, learned of the project's demise Wednesday morning when contacted by ABC 6 News for comment. He said he then shared the news with neighbors.

"They were pretty well aware of what the environmental impact would be and then also the impacts on the values of their homes with really little or no input leading up to that project," Brinkman said. 

As Hy-Vee searched for a home for a potential site, it also considered building in Albert Lea. The company ended up choosing the Austin site despite a multimillion-dollar incentive package from Albert Lea. 

The company's full statement reads as follows:

After evaluating recent changes in consumer shopping and lifestyle behaviors, we are adjusting our growth strategy to best meet our customers’ changing wants and needs. Over the next several years, we will continue to expand our offerings across the Midwest by constructing new format stores that offer fresh items, such as Hy-Vee’s new Fast & Fresh store format. These locations are in addition to our traditional stores that we continue to build. Our newer facilities that opened in Ankeny, Iowa, and Chariton, Iowa, will assist with supplying fresh items to Hy-Vee’s locations and eliminate the need for an additional distribution center at this time.

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