Iowa City banks on Lucky’s to bring good fortune

By Chase Castle

chase@corridorbusiness.com

Elected officials and neighboring businesses in Iowa City hope this week marks the beginning of a new chapter for a distressed plaza and a retail revival for the city’s northeast side.

Lucky’s Market opened July 1 at the Iowa City Marketplace, an area still recovering from the hole left by Von Maur’s relocation to Coralville in 2013, spurred by an estimated $16 million in incentives. The department store’s absence has posed concerns ever since over how best to repurpose the vacant storefront at the former Sycamore Mall, originally built in 1969.

“What we want is a vibrant commercial hub,” Iowa City Mayor Matt Hayek said in an interview. “When Coralville provided heavy subsidies to move Von Maur five miles to the west, the mall lost its anchor. And we’ve struggled for several years to pick up the pieces. It’s clear that a commercial setting like that needs an anchor, and we’re very excited to have Lucky’s.”

The roughly 37,000-square-foot store will employ more than 150 people, about 60 percent of whom will be full-time. The business will be run by store manager Troy Bond, a Cedar Falls native with over 20 years experience in the natural foods industry, most recently with Fresh Thyme Farmers Market in Indianapolis.

Mr. Bond said about 30 percent of the grocer’s produce will be USDA-certified organic, meaning it meets the agency’s standards for soil quality, use of pest and weed control, and additives. He said produce from smaller, local distributers unwilling to pay for USDA organic certification also will be sold, helping to support the chain’s philosophy of offering competitively priced organic food.

“We want to have a value proposition when people walk into the store, and [produce] is the first thing they see,” Mr. Bond said. “We don’t want to give somebody sticker shock by having a $9 pint of raspberries that were flown in from Brazil. That can be really off-putting, and we don’t want that as a barrier.”

The new store marks the 12th location nationwide for the Colorado-based chain, which started in 2003. In addition to its original store in Boulder, Colo., the chain has locations in Ann Arbor, Mich., and Columbia, Mo., and will open additional stores in Missouri, Georgia and Florida later this year.

“What they’re doing is targeting more college towns, because they find that college towns have a lot of people who are usually a little more educated about healthy eating and natural food lifestyles,” Mr. Bond said. “And they find they get a lot of business very quickly from people who are knowledgable about healthy eating.”

John Arlotti, vice president of developer and property owner CORE Realty, said he expects Lucky’s to draw 8,000-12,000 customers per week.

“There’s just a lot of good, vibrant retailers that are already there, and Lucky’s is going to help bring a lot more traffic than Von Maur had,” he said.

More than 30 businesses currently rent space at the 43-storefront marketplace, including a Sears Hometown Store, the Sycamore 12 Theatres and a Planet Fitness, although Mr. Arlotti said his company already has either formal or preliminary plans for all but two of those spaces. He said he aims to have the plaza near full occupancy by the end of next summer.

“We want all the retailers to be successful, and we want to be able to put the right mix in,” he said.

According to the development agreement with CORE Realty approved by the Iowa City council last November, the property owner will receive up to $1.75 million in tax increment financing (TIF) for the continued redevelopment of the plaza, which remits newly-generated tax revenues to the developer.

Prior to that happening, however, the agreement mandates that by the start of next year, the marketplace’s valuation increase at least 15 percent, which would raise its overall value to approximately $11.5 million. The developer also will be required to make improvements to the surrounding area, including facade renovations, parking lot and sidewalk installations, interior remodeling and the creation of new common areas. To qualify for the maximum tax rebate from the city, those improvements must total at least $4.4 million and be completed November 2017.

Mark Seabold is an architect with Shive-Hattery, which has been working with CORE Realty on the Iowa City Marketplace since Von Maur left.

“We did light remodeling on the inside of the mall, but ultimately the interior aspect of it will go away, and a lot more circulation will happen and have it go more into the neighborhood,” Mr. Seabold said.

Designers hope the move to a more “open air” layout being adopted by malls across the country will not only distinguish it from the enclosed Coral Ridge Mall in Coralville, but also make the marketplace easier to reach on foot from any adjacent business near First Avenue.

“It’s going to help the whole area,” Mr. Seabold said. “It’s not just about the marketplace.”

With Lucky’s scheduled to be open daily from 7 a.m.-11 p.m., the project’s supporters also hope the store will extend the time shoppers spend in the area beyond the operating hours maintained by most businesses.

“So it will really prolong the life of the Iowa City Marketplace, and that helps attract new users as well,” Mr. Seabold said.

With the aim of easing traffic congestion and maximizing vehicle access, the city also began construction last week on a year-long grade separation project that will elevate the Iowa Interstate Railroad tracks south of Bradford Drive above First Avenue. City staff said the construction will cost an estimated $10.6 million, and is one of several multi-million dollar projects the city has undertaken in recent years to improve traffic in the area northeast of downtown.