City approves parking lot sale to Hy-Vee
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In the second special meeting in a span of four days, on a unanimous vote Thursday, August 27 the Mount Ayr city council formally approved a purchase agreement with Hy-Vee for the sale of the city-owned parking lot located adjacent to the old Shopko building.
Possession of the lot was a key to Hy-Vee moving its grocery store and pharmacy to the Shopko location.
At the prior special meeting Monday, August 24, the council had rejected Hy-Vee’s original purchase agreement due to a series of restrictions the company had placed on future usage of its current grocery location on Highway 2. At the conclusion of that meeting, the council had approved the original $35,000 purchase offer contingent on Hy-Vee eliminating certain restrictions along a sunset date on all remaining restrictions.
In response, Hy-Vee agreed to eliminate restrictions listed under Items H, I, and J (see box), but it declined to set a sunset date for any remaining restrictions.
At Thursday’s meeting, Phil Hoey, director of real estate with Hy-Vee, explained that his company is aware of the 21-year maximum on usage restrictions set by Iowa law. However, at the end of the 21-year period, companies with the perpetuity language in their official Declaration of Usage Restrictions can file for an extension of restrictions if they choose. Without the perpetuity language, companies are held to the maximum of 21 years. Hoey added Hy-Vee can waive restrictions at any time.
“The restrictions we’re placing are really limited to direct competition for what we do,” Hoey said.
Kelly Main still had reservations about the perpetuity of the restrictions.
“Perpetuity is a long time,” he said. “Ten years is a long time when you’re trying to make something happen in the community. I don’t think it’s a good move marrying into a perpetuity agreement on restrictions.”
Wiley Main asked Hoey if the restrictions would remain in effect if a second owner decided to sell to a third owner or decided to sell off a portion of the property.
Hoey said the restrictions are attached to the title of the property parcel, regardless of how many times it might change hands in future years. If Hy-Vee decides to waive certain restrictions or allow the restrictions to lapse, the restrictions would vanish from the title, and the property could be used for any purpose by future owners.
Regardless of the perpetuity language, Hoey said Hy-Vee fully intends to sell the property.
“We’re not interested in keeping property and just holding it and continue to pay taxes on it, especially if we’re not using it,” he said. “So across our whole company, if there’s a piece of property that we own that we’re not utilizing, we want to sell that. We actively sell our properties to users. We’re also bound by the city to maintain it.”
Hoey said the current Hy-Vee in Mount Ayr is one of the smallest in the company’s chain.
“We build gas stations today that are bigger than that store,” he said, adding the move into the old Shopko building would nearly triple the space available in the current store.
Doug Still remarked that a larger store could possibly add more taxable items for which the current store doesn’t have room to offer.
Dick Elliott echoed Still’s point.
“More taxable items, which you get your sales tax from, you’re going to have a higher tax base there, and they’re probably going to employ more people,” he said.
Elliott also expressed a concern if Hy-Vee could no longer use its aging current building.
“If for some reason Hy-Vee doesn’t move into this other building [Shopko]… [and] they have to move out of it [current store], then they might not build another store…,” he said, “It’s just not Mount Ayr – it’s the entire county. Some people from Missouri come up here to shop, and if we lose that, you’ve lost everything in Mount Ayr.”
Priscilla Alvik noted the importance of having a Hy-Vee in the community.
“This is a gently eldering community,” she said. “I don’t want to go to Creston for a pharmacy. A lot of elder people don’t know how to use computers. They don’t want to bother with mail-in prescriptions. They don’t want to bother going to Creston in the winter… I would move mountains to court them [Hy-Vee] because it’s going to benefit you in the long run. It’s going to benefit your residents.”
Deb Robertson agreed with Alvik’s comments.
“I think it’s a big injustice for us to walk away from this and not have maybe even the opportunity to have Hy-Vee in here,” she said. “We watched Caseys grow, we get Hy-Vee to grow, we have a better chance of our community to grow.”
Hoey referenced Hy-Vee’s connection to Mount Ayr.
“We’ve been in this town for 74 years,” he said, “one of the longest legacy communities we’ve served in our 90-year history.”
In his remarks, councilman Brad Elliott explained that, in turning down the original purchase agreement at Monday’s meeting, the council had simply wanted verbal agreements related to easing usage restrictions as well as an explanation of the perpetuity of those restrictions be put into writing.
“No one at these tables is against Hy-Vee,” said Elliott. “This wasn’t meant to be an issue to divide the community over anti-Hy-Vee rhetoric because it couldn’t be further from the truth… “
Still asked Hoey if Hy-Vee had a tentative timeline for opening in the new location, if the council were to approve the sale of the parking lot.
Hoey said he had not seen the construction plans, but since Hy-Vee has already converted 12 or 13 former Shopko locations, he estimated the new store could be open within four months. He added the pharmacy trailer is a rented unit, so its removal could come soon after the transition into the new store.
These usage restrictions were eliminated from the agreement between the City of Mount Ayr and Hy-Vee for the grocery chain’s purchase of the city-owned parking lot in front of the old Shopko store. Hy-Vee plans to move its operation from the current site on Highway 2 to the old Shopko store within four months.
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h. any lockers, lock-boxes or other type of storage system that is used to receive or store merchandise from a catalog or online retailer.
i. the fulfillment, receiving, storage or distribution of merchandise from a catalogue or online sales.
j. manufacturing use, industrial use, warehouse, wholesale or distribution facility; coin operated laundry facility; dry cleaning plant (provided, a dry cleaning drop-off only location is not prohibited hereby); pornographic or “triple-x” video or adult book store; bowling alley, billiard parlor, health club, skating rink, dance hall, movie theatre, flea market, banquet hall, funeral parlor, off-track betting establishment, tattoo parlor; craft or antique store, night club or any other business serving alcoholic beverages (except only as an incidental part of the operation of a sit-down restaurant).
