The 665,000-square-foot Hy-Vee distribution center in Cherokee, Iowa, is one of two in the state. The West Des Moines-based company has announced that it's planning for a third center and has identified a site in Austin.

AUSTIN — The brakes have been pulled on a proposed Hy-Vee distribution center in Austin.

"Hy-Vee is delaying its timeline on the potential construction of a new distribution center in Austin, Minnesota," Tina Pothoff, vice president of communications for Hy-Vee, said in a statement. "Preliminary plans had the project breaking ground in 2019."

Pothoff said the company will now evaluate the need for a third distribution center "within the next several years." Hy-Vee currently operates distribution centers in Cherokee, Iowa, and Chariton, Iowa

News of the delay comes after an announcement in September by Austin city officials and the Hy-Vee that the grocery chain was exploring plans to build a distribution center on a 150-acre site north of Interstate 90 on the western edge of town. The company does not own the property.

This project was praised by Austin city officials, but public reaction was mixed. Some said there was a lack of transparency in the city's dealings with Hy-Vee, while others welcomed the jobs the project could generate.

"(Hy-Vee) should consider building in a small town around Austin like Rose Creek, Dexter or Adams," said Rick Bottema, 47, of Rose Creek, an owner of two businesses in Adams. "Our school district needs something like this, and I bet people in our district will welcome this with open arms. The people complaining don't know how big this would help someone's economy."

But Kathryn Colestock, an Austin resident who lives on 6th Avenue Northwest, was put off by the announcement's timing and the lack of information.

"This is not a matter of 'not in my backyard,'" she said. "This is a matter of asking our local government to abide by the very stipulations that it set in place, and asking them to be honest and transparent about it instead of secretive and hush-hush."

Austin city officials expressed their disappointment regarding Hy-Vee's decision, but said in a prepared statement that they continue "to be excited about the possibility of a project that would provide many positive benefits to the entire community of Austin."

"We were assured that the premature concerns raised by a few individuals were not a contributing factor to their adjusted start date," the statement reads. "The City of Austin stands ready to advance the potential project as the environmental review is completed and Hy-Vee aligns their capital improvement projects."

Reasons for the delay

Pothoff said that the decision to delay the Austin project was not due to public outcry. Rather, the company is planning to launch a series of smaller-front stores called "Hy-Vee Fast & Fresh." Two such stores will soon be under construction in Altoona, Iowa, and Des Moines, Iowa.

The fast and fresh stores are around 10,000 square feet and include grocery items, freshly prepared foods and a coffee shop. Additionally, Hy-Vee plans to look into developing stores that are larger than the existing 90,000-square-foot stores to complement the smaller format locations.

"We believe our new store concepts will offer the perfect blend of ready-to-eat meals as well as expanded health food offerings for today's consumers who are looking for convenience and exceptional customer service," Pothoff said.

Pothoff said Hy-Vee already has several major construction projects underway, including:

• A 240,000-square-foot production facility in Ankeny, Iowa, which will serve as a commissary and central bakery.

• A 48,000-square-foot Short Cuts production facility, located adjacent to the distribution center in Chariton, Iowa, will produce fresh cut, retail ready fruits and vegetables.

Hy-Vee also has plans for new fulfillment centers in Kansas City, the Twin Cities and Omaha in the next few years

Pothoff emphasized that while planning for a distribution center in Austin is now delayed, it doesn't mean the Austin project is off the table.

The company also hopes to address the concerns of residents when the distribution center proposal is revisited.

"Right now it is too early in the process for us to address those topics," Pothoff said. "However, when we have more specifics on the potential project's timeline and scope, we will make sure we communicate directly with those residents."

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