Cedar City working with Associated Foods to expand Lin’s Marketplace

Cedar City Council members meet in the Council Chambers, Cedar City, Utah, circa 2015 | Photo by Carin Miller, St. George News

CEDAR CITY — The face of Cedar City’s downtown grocer, Lin’s Marketplace, will undergo a dramatic change as Associated Foods works with the Cedar City Redevelopment Agency to expand the store an additional 10,000 feet in upcoming years.

In a Wednesday night meeting of the RDA board, the discussion was opened by Cedar City Manager Rick Holman who was representing the city, which owns the property in question. The city built the building as an investment property and leased it to Associated Foods. Lin’s has occupied the site for more than two decades. The lease is up in 2017.

Discussions have been ongoing for some time now, Holman said, explaining that Associated Foods approached the city as a landlord and asked for help expanding the building.

Associated Foods has recognized that competitors in the area have larger retail spaces than they do, Holman said, and asks that the city utilize space that was set aside when the building was first erected to expand and allow them to grow.

“At the time that this building was built, there was property to the south of the Lin’s building that was set aside for possible future expansion,” Holman said.

The space Holman referred to is the driveway through-area that resides between Lin’s and the building directly to the south. This would close off the passage from the parking lot to 100 East but give the store a tremendous amount of space to work with as it continues to meet the needs of a growing community.

Although many will lose their favorite pass-through to 100 East, RDA board member and Cedar City Councilman Fred Rowley said, keeping Lin’s in that space is a wise investment for Cedar City, considering Lin’s stellar track record as a tenant.

“I think John (Black) summed it up pretty well last night when he said, ‘This has been kind of the heart of our whole downtown, the whole anchor,’” Rowley said. “If we were to lose it, it would be a serious blow to the whole downtown, because then we would have this building sitting there (empty) trying to find a tenant for it.”

The business strip to the south of Lin’s has been vacant for nearly a year in the space where Dollar Tree used to reside, Rowley said, adding that vacancies are never good to have in any downtown business district — especially one that bases a large part of its income on tourism.

Lin’s original lease was a long-term lease that spanned 25 years, according to City Council agenda information documents, and excess monies acquired by the city through the agreement have been used to provide additional infrastructure to downtown and surrounding areas.

Lin’s has been a wonderful ‘anchor tenant’ in the downtown area and has been a very responsible and reliable business,” the information documents stated.

Associated Foods proposed a new long-term lease for the period of 20 years to the RDA, the information document reported; in exchange, the RDA has offered a $1,600,000 construction allowance commitment to pay to for the work.

All costs above that number would be the responsibility of Associated Foods to pay for, Rowley said, explaining that the next step of consideration for the board is to work on where the funding will come from.

There are a couple of funding options, Rowley said, but the most likely scenario will be entering into a short-term bond agreement with a bank and using the rent money paid to the city to pay off the loan.

“It’s not like with the Heritage Center where it’s like, ‘Well, I hope we can get the business to pay for this,’” Rowley said.

The Heritage Center Theater was built on RDA property as an investment for the community, as well, he said, but it holds a long-term bond that is dependent upon the city for repayment. The agreement with Associated Foods essentially pays for itself when all is said and done, he said.

We have a contractual agreement they are going to pay a fixed rate of $325,000 a year, and we’ll just apply that straight to the bond,” Rowley said.

Every five years, the fixed rate rent of $325,000 would increase by 5 percent to account for inflation, Holman said. There would also be six five-year renewal lease options available to Associated Foods at the end of the 20-year lease, he said, possibly extending their relationship to a 50-year term.

With an additional 10,000 feet of space to enhance shoppers’ experiences, Holman noted, parking lot expansion will be important to consider. There are a variety of ways to support additional parking, he said, including changing the angled parking to straight-on parking or even eliminating an old ATM that State Bank of Southern Utah put in years ago and no longer uses.

Every five years, the fixed rate rent of $325,000 would increase by 5 percent to account for inflation, Holman said.

As the project moves forward, it will be subject to the same development process as any other large construction undertaking, Holman said, requiring plan approval and further discussions with architects, engineers and contractors.

“Any plans for the expansion will go through our typical project review process,” he said, “which is done with every other industrial, commercial or multifamily development.”

The board will levy its final decision about whether to move forward with the new agreement or not next week, Holman said; but Rowley said he believed it would be a foolish venture to consider moving forward in any other way.

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