Albert Lea ends up as runner-up

By Sarah Stultz and Mike Stoll

Hy-Vee Inc. confirmed Friday it is in the exploratory phase of making plans to build a new distribution center in Austin.

Hy-Vee is looking at a 150-acre site on the western edge of the community north of Interstate 90 by the Oakland Avenue exit. Hy-Vee does not own the property at this time, but anticipates construction could begin as early as 2019.

“The site in Austin is being considered for the project due to its centralized location in the company’s eight-state territory and interstate access as well as the community’s ample workforce,” said Tina Potthoff, vice president of communications for Hy-Vee Inc.

Hy-Vee has distribution centers in Cherokee, Iowa, and Chariton, Iowa. Both centers employ several hundred people.

Ryan Nolander, executive director of the Albert Lea Economic Development Agency, said his organization had been working on the project since last October when officials from the Minnesota Department of Employment and Economic Development contacted his agency with details of a company looking to locate in southern Minnesota. The company was considering land on a private farm off of Freeborn County Road 46 on the edge of Albert Lea.

“We made the cut to the final five, then the final three and unfortunately finished runner-up to Austin,” Nolander said. “Our efforts on this project, and the incentive package we prepared, were commended by Hy-Vee’s project team and Minnesota Department of Employment and Economic Development. While we are disappointed that this project is not locating in our community, we congratulate Austin for bringing this large project to our region and recognize the economic impact this will have for southern Minnesota.”

Albert Lea was one of 12 locations in Minnesota to submit a proposal for the project.

According to a statement issued by ALEDA, Albert Lea at one point in March was eliminated from the running because of the cost to grade the site being considered, but after submitting a revised proposal, the city made it back into the running and became one of the top three communities for the project. After months of deliberation, the community of Austin ultimately was chosen, and the city was notified of the decision.

According to a letter from the Minnesota Department of Employment and Economic Development Agency to Nolander and City Manager Chad Adams, Hy-Vee was impressed with Albert Lea leaders’ ability to find a solution to the site constraint and the abilities to work together to support economic growth.

“In the end, it is our understanding that the company’s decision was driven by logistics and site characteristics with the final site determined to be the best geographic location based on the company’s projected growth,” the letter stated. “What we have learned from this opportunity is that Albert Lea has a viable site that can and will be showcased to future prospects. The enthusiasm, professionalism and aggressiveness of your organizations impressed this client and us.”

Mark Heinemann, ALEDA board president, said though he is disappointed with the outcome, he hoped to learn from it for future endeavors.

“We tried our hardest,” he said. “We put together the best package we believed we could given the information we had available.

“We’re going to keep doing the best work we can to bring new opportunities into town.”

Adams said the city has great sites for distribution centers, and the city, ALEDA and other agencies will continue to provide strong proposals to attract other distribution center projects to the community.

Austin City Administrator Craig Clark said the project is expected to have a significant economic impact on the Austin community, such as out-of-town construction spending, work for local contractors, increased demand for professional and retail service providers, increased local sales tax revenue and increased real estate transactions.

“This project would be a great boost for our community that will only get better with time,” he said.

Development Corporation of Austin Executive Director John Garry said local contractors and retail stores would see a substantial increase in revenue if the distribution center is built.