A Cedar Rapids developer wants to bring a new grocer to Maquoketa.

BR2 Development LLC of Cedar Rapids plans to invest about $5 million to construct a new building and “entice Hy-Vee to establish a Dollar Fresh store” to locate in Maquoketa, according to a press release from David Heiar, senior adviser for the Jackson County Economic Alliance. 

If approved, the proposed 27,000-square-foot building would be built on about 4 acres of land just north of Kwik Star on South Main Street. It would be one of the first newly constructed buildings designed specifically for Dollar Fresh, according to the press release. 

Construction could be completed by September 2021.

Designed for smaller communities, the Dollar Fresh stores offer an assortment of fresh and new products, according to the Hy-Vee website. That includes a full selection of groceries, fresh-baked items, a dollar section, a wall of value, ready-to-eat meal options, and other services.

The proposed Dollar Fresh store could bring 10 to 40 new part-time and full-time jobs to Maquoketa.

Before the project can happen, however, the Maquoketa City Council must agree to amend its Unified Urban Renewal Plan and sign a development agreement with BR2 Development. 

The public can comment on both subjects during two public hearings at 6 p.m. Monday, Oct. 19. The hearings will begin at the start of the regular city council meeting, which will be held in person in the Maquoketa City Hall Council Chamber and via online meeting platform Zoom to allow for social distancing. Masks will be required in City Hall. Comments may also be submitted via mail or phone to Maquoketa City Hall.

The developer plans to use tax rebate incentives provided by the proposed development agreement with the city to bring the project to fruition.

As part of the agreement, BR2 Development is asking the city for a 90% rebate of the incremental property taxes — up to $1.3 million over 15 years — through 2038. The developer still would pay mandatory property taxes such as debt service to the city, physical plant and equipment dollars to the school district, etc., Heiar explained to the city council earlier this month.

Any time the city wants to add a project to its Unified Urban Renewal Plan, it must amend that plan. Because tax dollars are involved, affected taxing authorities must be consulted. Maquoketa City Manager Gerald Smith met with the county supervisors during a work session Sept. 29 as part of a mandatory consultation process regarding the issue. The Maquoketa Community School District was invited but did not attend the virtual meeting.

Adding the project to the urban renewal plan allows the city to offer tax-increment financing (TIF) as an incentive tool to entice businesses to the area. However, unless the project is listed in the city’s urban renewal plan, the city cannot use TIF as a tool for development, Heiar said.

Towns must first establish TIF districts based on the need for economic renewal. Once established, the assessed value of taxable property within the designated area becomes the base value. Then, if assessed property values in that area increase, the difference (the increment) between the base and the increase is diverted for projects or activities within the district, according to Phuong Nguyen-Hoang, associate professor at the University of Iowa School of Urban and Regional Planning and Public Policy Center. 

The city can use those dollars to reimburse itself for money it spends on qualifying projects such as street repairs, design plans, and promoting economic development, provided those activities are within the urban renewal district. In this case, the TIF dollars would revert to BR2 Development.

The Maquoketa City Council will hear public comments on the issue next Monday, then is expected to take action on both the agreement and the plan amendment that evening.

Hy-Vee, Inc. is an employee-owned corporation operating more than 275 retail stores across eight Midwestern states with sales of $11 billion annually. At least six Dollar Fresh locations were scheduled to open this year in Iowa.