To store manager Todd Hepler, the announcement that Hy-Vee will build a 60,000 to 90,000-square-foot grocery store at Oak Park Mall — the location of Hy-Vee’s original Austin store — came at the perfect time.

“It’s homecoming week here in Austin and we’re actually coming back home,” Hepler said.

On Monday, city officials announced that the Austin Port Authority had reached a general agreement to acquire the Oak Park Mall property for $3.3 million. Around noon Tuesday, Hy-Vee announced plans to build a new store at the mall, the grocery store’s original home from 1975 to 1985.

To Hepler, it’s great news for the community.

“We’ve been a part of this community for almost 40 years, and it’s been hard to witness how Oak Park Mall has struggled,” Hepler said in a press release. “I wanted to see if there was something we could do to move the needle like never before. Luckily, Hy-Vee provides me the autonomy to impact change. I took this idea to our leadership, and now a new store will be built at the mall.”

Hy-Vee signed a letter of intent with the Austin Port Authority, and over the next 30 days the two entities will work to execute a formal developer’s agreement and purchase agreement.

“We couldn’t be happier with the agreement,” Austin Port Authority President Jerry McCarthy said in the release. “This is the type of major investment from a respected retailer that Oak Park Mall needed. We’ve worked hard over the years to spur new life in the mall. We never gave up hope that one day an opportunity would present itself, enabling the mall to live up to its full potential.”

A Hormel Foundation grant to the city will cover the city’s acquisition cost. Hormel Foundation Chairman Gary Ray called it a fantastic opportunity for future development in Austin.

“We thought that this would be a great move for the city to take care of the area out there,” he said.

Hy-Vee has not yet announced if it plans to purchase the mall from the Port Authority, nor has it released the projected cost of the its new store.

“We’re just in the very very beginning planning stages,” Hepler said.

Austin Mayor Tom Stiehm commended the Port Authority and Hy-Vee for working together to come up with a solution.

“This is a win-win for everyone, but especially for the citizens of Austin,” he said in a release. “It won’t be long now that we’ll be able to drive by the mall and look upon it with pride.”

Hepler told his Hy-Vee staff the news just before noon on Tuesday, and he said they were pleased, adding they saw it as a sign the Des Moines-based company is dedicated to the Austin community.

“They are ecstatic knowing that they are going to get a brand new facility,” Hepler said.

“We work for a company that really does care about Austin,” he added.

 

A ‘brand new facility’

As part of the arrangement, a large portion of the mall at 1301 18th Ave. NW will be demolished, and the site will undergo several major improvements, including the addition of a storm detention system, upgraded building facades and fire protection for remaining buildings, new exterior walls for Younkers and the movie theater, and a new parking lot and public restrooms.

While Hepler said the new Hy-Vee will be a “brand new facility,” it appears other parts of the mall are just set for remodels.

“The mall is not completely coming down,” Hepler said.

The new Austin Hy-Vee store will feature the amenities Hy-Vee has become known for: Market Grille, a full-service restaurant and bar concept; pharmacies with drive-up windows; in-store dietitians and a wellness department; floral design and shop; certified wine, beer and spirit specialists; specialty cheese and artisan bread; in-store chefs and cooking demonstration stations; a made-to-order sushi bar; a large HealthMarket and bulk foods section; thousands of produce and specialty items; and dry cleaning and postal services.

A $7 to $10 million remodel of the current Austin Hy-Vee site was expected to start in July, but work had been delayed. With the remodel proving costly, Hy-Vee opted to look at outside locations, according to Hepler. He also noted the six stages of construction could have been problematic for customers, as the store had been slated to stay open throughout the entire project.

Now, the current store will remain open until the mall location opens.

“There’ll be no change for our customers,” Hepler said. “They’ll still be able to get that helpful smile in every aisle all the way through.”

A timetable hasn’t been set for the project, as Hepler said the company will now begin design work for the mall location.

According to the agreement, the current Hy-Vee store at 1001 18th Ave. NW will be demolished within 90 days of its new Oak Park Mall store opening, and the location will be donated to the Port Authority. Hy-Vee has been at its location on 18th Avenue since 1985.

 

Excited for the future

The mall has been a point of discussion for several years. Ray said the mall was the most talked about city issue in Vision 2020 community surveys.

“We’d heard a number of complaints for the city about the condition of the mall and how unappealing it is,” Ray said.

Now, Hormel Foundation and community leaders are excited for the future.

“I think it could be really exciting for the future of Austin,” Ray said.

On Monday, city officials said they plan to repair the parking lot, which has long been a talking point for area residents. Hepler confirmed the lot will be replaced, but he noted details are pending.

“The entire parking lot will be replaced, by who I’m not sure,” Hepler said.

City leaders were thankful for the opportunity presented by the Hormel Foundation’s grant.

“We would like to publicly thank the Hormel Foundation for their generosity towards this project,” city officials said in a press release on Facebook Monday night.

The city’s purchase agreement includes acquisition of the entire mall facility — except Shopko — located at 1301 18th Ave. NW and an additional out lot located along 18th Avenue Northwest. That includes the mall property, Younkers and CineMagic 7. The Shopko property is owned by the retailer.

The mall had been owned by Chicago-based Martin Graff of M H Graff & Associates Inc. and Martin Goldman of M J Goldman & Co. Ltd., the businessmen behind Oak Park Mall Ltd. Partnership and Oak Park Mall Land Ltd. Partnership.

However, rumors about the property had swirled in recent years as the mall faced tax issues. In June of 2013, the mall owners paid $378,170 owed on two lots a few weeks before the property was set to forfeit.

According to officials at the Mower County Auditor-Treasurer’s office, Oak Park Mall owes $142,869.33 on the mall property. However, the sale agreement would likely address which party would be responsible for paying the due taxes. The estimated market value of the mall property is just under $2.9 million, according to the Mower County Assessor’s office.