News Track: Grocery shuttles end but Cedar Rapids still looking to replace First Avenue Hy-Vee

Residents of Cedar Rapids’ Wellington Heights and Mound View neighborhoods have been left without a permanent grocer in the area since Hy-Vee closed its First Avenue NE store on June 23.

Hy-Vee’s departure at the 1556 First Ave. NE property left no grocery store within a mile and a half, creating a food desert. The store served some of Cedar Rapids’ most racially diverse neighborhoods, with more residents who are Black, Indigenous and other people of color than other areas beyond the city core.

The West Des Moines-based grocery chain said the store, which opened in 2002 after the city of Cedar Rapids dedicated a $915,000 incentive package, has not “consistently met our financial expectations and sales goals over the past several years.” The closure came despite Hy-Vee last fall extending its lease five years with property owner Agree Limited Partnership. But Hy-Vee has committed to not placing any restrictions that would block another grocer from locating on the property.

The grocer also had funded a free shuttle, offered through Horizons’ Neighborhood Transportation Service, through Sept. 1. It ran three days a week from the closed First Avenue store to the Oakland Road NE Hy-Vee, the store where pharmacy prescriptions were transferred.

With temporary measures in place to help residents access groceries, Cedar Rapids city officials began to seek a permanent grocery replacement.

A grocery market study the city of Cedar Rapids completed last year found there is high opportunity in the core of the city around the New Bohemia District, the MedQuarter and downtown for a grocery store that appeals to lower- and moderate-income residents who are price conscious when they shop.

What’s happened since?

Cedar Rapids City Manager Jeff Pomeranz said the city continues to actively recruit a grocer to the site. “We are talking to an individual who has interest in the site,” he said.

This individual is gathering information to determine whether he’s interested in making the investment. Pomeranz said this person owns a number of Midwest grocery stores, but declined to name the grocer.

In the meantime, Hy-Vee stopped its shuttle service Sept. 1, spokesperson Tina Potthoff wrote in an email.

“After evaluating usage for several weeks, we were serving approximately 12 of the same people each week,” Potthoff wrote. “Toward the end of August, we placed signs in the shuttle that said when the service would be stopping and stating if riders of the shuttle needed additional assistance getting groceries to call Hy-Vee’s Customer Care at 1-800-772-4098. We will take care of these customers directly when they call us to make sure everyone gets the groceries and service they need.”

She said efforts are underway to move remaining equipment out of the store.

Local nonprofits are filling the neighborhood’s food needs without a permanent solution in place.

The Hawkeye Community Action Program supports three main pantries in the area most affected by the store’s closure: Loaves and Fishes, 1030 Fifth Ave. SE; one inside the Wellington Heights Pantry at First Congregational United Church of Christ, 361 17th St. SE; and United We March Forward’s pantry at 214 13th St. SE.

A full list of pantries and HACAP’s mobile pantry schedule are available at hacap.org or by calling (319) 393-7811, option 2.

City officials continue to explore permanent solutions. In an Aug. 29 town hall in North Liberty with U.S. Agriculture Secretary Tom Vilsack, Mayor Tiffany O’Donnell asked about the closures of Hy-Vee stores in vulnerable neighborhoods in Cedar Rapids, Waterloo and Davenport.

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She said rural Iowa towns also have looked to find investors to create their own grocery stores after some shuttered, but some Iowans still have to drive upward of 15 miles to access food. O’Donnell asked for suggestions to solve the issue.

Vilsack first suggested applying for a slice of $60 million in grant funding available through the Healthy Food Financing Initiative, which is operated out of a not-for-profit foundation in Louisiana. He said this foundation makes subgrants to communities that are interested in developing their own grocery store, supporting a grocery store or transitioning a corner store to a store with more diverse offerings.

Applicants may seek loans ranging from $500,000 to $5 million to implement healthy food projects. Funds may be used toward predevelopment, land acquisition, renovations and equipment purchases.

He also suggested using traditional economic development tools at the local and state level that may typically be used to attract manufacturing businesses. While there may be some reluctance to use certain financial incentives to support retail, Vilsack said, advocating for flexibility may help the city fill the grocery gap.

“You're not going to be able to attract a manufacturing facility if you don’t have the basics of the community, and if you’ve got a hospital and you got a grocery store and you’ve got a school, you got the basics, right?” Vilsack said. “But if you don't have any one of those three or all of those three, then it’s pretty doggone tough to convince anybody to look out here at how great your industrial park might be.”

Vilsack said O’Donnell should use her power as mayor to convene major grocery store leaders and explore how they could fill the grocery gap in not only Cedar Rapids, but nearby small towns.

He shared a story about asking the then-chief executive officer of Whole Foods to explore how to locate stores in places that wouldn’t only serve high-income families. Starting in downtown Detroit, he said, Whole Foods staff changed the usual business plan and reworked it to a not-for-profit model. Staff surveyed the neighborhood to understand what food that residents actually wanted and hired people from the neighborhood.

Eventually, Vilsack said Whole Foods brought similar approaches to other cities including Chicago and Baltimore.

“As a mayor, you should be concerned about that small town, because as many people who live, work and raise their families in Cedar Rapids, there are a lot more that come to Cedar Rapids to work because they don't want to live in a big city,” Vilsack said. “They would prefer living in a small town, so that's a bedroom, that's your housing stock, right? So you've got a stake in making sure that small town survives and thrives … ”

Tom Barton of The Gazette contributed to this report.

Comments: marissa.payne@thegazette.com