Cedar Rapids continues work to find a new grocery store for former First Avenue Hy-Vee

CEDAR RAPIDS — There may be new hope that a grocery store will move into the former First Avenue Hy-Vee, but much more work still has to be done before the store becomes a reality, Bill Micheel, the city’s economic and development services director, said this week.

The store, at 1556 First Ave. NE, was closed by Hy-Vee in June last year, creating a food desert. The store served one of Cedar Rapids’ most racially diverse neighborhoods.

Cedar Rapids City Council member Ann Poe, at a council meeting Tuesday, asked Micheel whether there has been progress attracting a grocery store to the area.

Micheel said some interest has come from a grocery company in Kansas City that operates 10 stores of the type that would fit what's needed in Cedar Rapids. Crucial to the deal is obtaining a $250,000 USDA grant that would help purchase needed equipment for the First Avenue store. The city would have to apply for the grant and then funnel the money to the new store.

"They've been here and toured the store. They know what they would be getting into," Micheel told The Gazette of the business.

If a deal cannot be worked out, Micheel said he's also been talked to officials at IGA Foods and they also have expressed an interest. The Independent Grocers Alliance (IGA) was founded in 1926 to bring family owned, local grocery stores together under the IGA brand. IGA has stores in many U.S. states and foreign countries.

Hy-Vee must be involved in any agreement because it still has four years left on its lease of the property, which is owned by Agree Limited Partnership, a firm with offices in New York and Detroit, Micheel said.

The First Avenue Hy-Vee store opened in 2002 after the City of Cedar Rapids dedicated a $915,000 incentive package to replace a small, rundown Hy-Vee store nearby.

The store was deemed important because it served two of the city’s older eastern neighborhoods: the densely populated Wellington Heights and Mound View neighborhoods.

Hy-Vee said the store had been under performing in recent years, which led to the decision to close it.

The area is designated by the U.S. Department of Agriculture as low-income, meaning the poverty rate is 20 percent or higher, or the median family income is less than 80 percent of the median family income for the state or metropolitan area.

If neither deal works out, "Plan B is likely working (on a plan) with support of some kind from the city," Micheel told The Gazette.