Hy-Vee looking at old Rainbow Foods site in Cottage Grove

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The Hy-Vee grocery store chain may be close to nailing down a fifth supermarket location in the Twin Cities. The Iowa-based company is targeting Cottage Grove in the southeastern metro area, and may select a former Rainbow Foods store that’s been vacant since July, the South Washington County Bulletin reports.

City Administrator Ryan Schroeder said city officials recently began talks with a local broker hired by Hy-Vee as it expands in the Twin Cities.

Hy-Vee is beginning a major push into the Twin Cities market, and has already announced plans to open stores in New Hope, Oakdale, Lakeville and Maple Grove.

Schroeder said Cottage Grove has identified several potential locations for a Hy-Vee store, but would prefer to have the grocer take over the vacant Rainbow Foods location, which is near the interchange of Hwy. 61 and 80th Street, according to the Minneapolis-St. Paul Business Journal.

That store closed in July when Roundy's, the Milwaukee-based grocery chain, pulled out of the Twin Cities market and no buyer could be found for that location.

Cottage Grove has only three grocery outlets in town: Cub Foods, Target and a Wal-Mart, compared to eight grocers in nearby Woodbury. Schroeder said the community is an attractive candidate for a Hy-Vee because of that factor, according to the Business Journal.

The talks with Hy-Vee are still in the early stages, Schroeder said, but added that company officials are likely to visit the city again soon, although no date has been set.

Mayor Myron Bailey said if Hy-Vee decides to take over the Rainbow Foods building, it would most likely be retrofitted. He said the grocer would also be interested in purchasing the roughly 17,000-square-foot bingo hall next door to add more space, the Bulletin reports.

A Hy-Vee spokesperson declined to comment on the Cottage Grove talks.

The other end of the so-called Gateway District is anchored by another vacant building, where a Home Depot operated until it closed several years ago.

Mayor Bailey said the YMCA is interested in taking over much of the vacant building for a new fitness center, and recently submitted a letter of intent, the Bulletin reports.

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