Here’s how Cedar Rapids is working to address Hy-Vee’s closure of First Avenue store

CEDAR RAPIDS — Faced with the abrupt closure of Hy-Vee’s First Avenue NE location, Cedar Rapids City Manager Jeff Pomeranz said Tuesday that city officials and local stakeholders are studying all options to fill the grocery store and pharmacy gap Hy-Vee will leave when it shutters the store in June.

City officials are looking to potentially recruit another grocer or create nonprofit partnerships to ensure residents in the densely populated Wellington Heights and Mound View neighborhoods — older neighborhoods east of the Cedar River near the city center — continue to have access to food and medicine when Hy-Vee closes at 1556 First Ave. NE on June 23.

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.

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Six months ago, C.R. was told Hy-Vee extended its First Avenue store lease 5 years

“At this point, we are still talking with Hy-Vee, but we also want to be as proactive as possible,” Pomeranz told the city council Tuesday. “ … What can we do to help the neighborhood? What can we do to keep this store open? What can we do to look at other opportunities as well?”

After Hy-Vee alerted city officials last May that it was considering closing the store when its lease expired, Pomeranz said the city met with representatives of the property owner to explore options to keep Hy-Vee there. He said Hy-Vee asked if city officials could help attain favorable terms to cut the company’s costs.

The city wasn’t directly involved with Hy-Vee on the lease negotiation, as the lease is between Hy-Vee and the property owner. But representatives of the owner at the time assured city officials in November that Hy-Vee signed a five-year lease extension.

The closure would be a “significant negative blow to the community and in our minds, closure of the store would be unacceptable,” Pomeranz said.

While she was surprised May 9 when Hy-Vee informed her of the closure, Mayor Tiffany O’Donnell vowed the city will find a solution. For instance, she said Matthew 25 officials proposed forming a nonprofit consortium to provide the needed services in Hy-Vee’s absence.

“What upset me specifically about this was the lack of consideration in letting us mitigate the challenges that were going to be dealt us,” O’Donnell said. “And in no uncertain terms, I said, ‘Your challenges became our challenges in a 45-minute time period.’ … I think our community deserves more.”

City looks to recruit grocer

Community Development Director Jennifer Pratt said the city completed a grocery market study in September 2023 focused on the core area of the community. This study “becomes a tool when we go out to promote and attract that type of retail to our community,” Pratt said.

City officials plan to promote the study with local and regional grocery chains as well as national grocers at the International Council of Shopping Centers Conference this month in Las Vegas. Pomeranz said Cedar Rapids officials have at least one meeting set up with a grocery store there.

The city also is about to launch its process to draft a First Avenue East micro plan at Wednesday afternoon’s Development Committee meeting. The first stakeholder meeting was held Tuesday. That included but was not limited to:

From the city, Pomeranz and O’Donnell are involved as well as council members Dale Todd, Scott Overland and Ashley Vanorny. O’Donnell said the city will take ideas from these discussions to Hy-Vee to ask the company to help the city mitigate the impact of the store’s closure.

Pomeranz declined to specify possibilities, but said options may include how Hy-Vee could offer transportation or other support to ensure the neighborhoods can access groceries.

“That’s owed to the residents that have supported this store,” Pomeranz said.

Read more about the timeline of city negotiations to keep the First Avenue Hy-Vee store here.

Comments: (319) 398-8494; marissa.payne@thegazette.com