Austin, we have a deal — almost.

The Austin Port Authority unanimously approved a roughly $2.9 million deal Monday morning to acquire Oak Park Mall and pass it on to Hy-Vee to build new 60,000- to 90,000-square-foot grocery store in place of the mall.

“It was a long time coming,” Austin Port Authority Board Member Jerry McCarthy said. “I think we accomplished something good here this morning.”

The port authority’s approval brings the mall redevelopment deal to the cusp of being finalized after a tumultuous year that saw the project on the rocks after talks stalled early this year.

All of the several businesses involved, including Hy-Vee, Younkers, Cinemagic 7, Anytime Fitness and neighboring businesses like Wendy’s and Arby’s, have approved the deal. Next up, the Austin City Council is set to vote on parts of the project, including tax increment financing for development costs, at its 5:30 p.m. Monday meeting.

Mayor Tom Stiehm told the port authority board that the mall’s condition, along with its parking lot, has been the public’s top complaint for as long as he’s been in office.

“This is by far the number one complaint, and it’s fantastic that the board is addressing it,” Stiehm said.

Craig Byram, the port authority’s attorney, later added that it’s been a concern for the community since he came to town in 1994.

“The condition of Oak Park Mall, the condition of that part of town was not adding to the economic vitality of Austin; in fact, it was slowing us down,” he said. “So the idea that this entire part of town will now be revitalized with a brand new, expanded Hy-Vee store, nicer property, great parking lot will not only impact those properties, but it’s my opinion that it will impact all the properties along 18th Avenue.”

“Overall it’s just very good for the community,” Byram added.

The agreement

Under the proposed agreement, the port authority would acquire the property and almost immediately pass it over to Hy-Vee with the help of a roughly $3.5 million grant from the Hormel Foundation.

The overall structure of the deal is similar to the original deal that fell through. However, that initial deal called for the port authority to oversee the demolition of the current mall property. Now, the port authority will only own the mall deal for a matter of minutes, if not seconds, before it passes it over to Hy-Vee, which will now oversee that process.

Hy-Vee will acquire the main parcel of the mall, and the port authority will keep the lot known as the Farmer’s Market lot for future development.

Hy-Vee’s new store is expected to be constructed between the theater and Younkers. Once the new Hy-Vee is completed, the existing grocery store at 1001 18th Ave. NW will be demolished and turned over to the port authority for future redevelopment.

As part of the closing, the port authority will pay all delinquent taxes and assessments — which total about $446,387, according to county records — and it will pay $92,000 owed to Austin Utilities for unpaid utility bills. The port authority will also pay all existing 2015 taxes.

When the existing Hy-Vee is torn down, the grocery store will pay all the real estate taxes.

The mall’s former tax valuation suit against Mower County will also be dropped, which is expected to save taxpayers $50,000 to $100,000 of time and attorney fees.

The businesses at the mall site will not be connected. Younkers will have its own stand-alone store, and CineMagic Theater all the way up to Shopko will be its own separate building.

The agreement also states that development on the Farmer’s Market lot through March 19, of 2019, will not include anything that would directly compete with Shopko. And the deal states the new buildings can be no closer to 18th Ave. than the current Shopko store, as the current mall building extend to the north and obstruct views of Shopko from the west.

Hy-Vee will provide Shopko with $100,000 for parking lot improvements. Hy-Vee will also give Younkers $220,000 to remodel as part of a renters rebate.

“The more people shop there, the better off everybody is,” Finance Director Tom Dankert said.

Currently, Younkers is laid out with its focus to the east as a way to direct traffic flow in and out of the mall. But that will soon become a wall. That means that Younkers will need to be shifted around for the focus to be the north end of the store.

Parking lot improvements are also planned for Hy-Vee.

Hy-Vee will retain the existing leases for Odyssey Entertainment Inc. (the theater), Younkers, the Wells Fargo ATM, and Anytime Fitness. The port authority will also hold an additional $75,000 to reimburse Hy-Vee should any of the leaseholders decide to seek litigation for Hy-Vee’s development efforts.

The deal is scheduled to close sometime the week of Nov. 9-12, and work is expected to begin almost immediately after.

The port authority will establish an escrow of $1.625 million for expenses that are eligible for the tax increment financing (TIF) proceeds, and those costs will be paid back to the port authority with future tax revenue over a twenty six year period. That will cover TIF eligible costs like demolition and asbestos abatement.

Leaders also expect an additional $375,000 from a state grant for the project. To date, the port authority and city each contributed $750,000 to the project and the Austin HRA contributed $50,000 for a total of about $1.5 of the needed $1.625 million, and Dankert is expected to request additional funds from the Austin City Council at Monday’s meeting.

Dankert is requesting the remaining $75,000 be transferred from the city’s building fund. The additional $125,000 — $50,000 from the HRA and $75,000 from the city — is only needed because the state grant came in at $375,000 instead of the $500,000 city officials requested.

‘A long time coming’

After all the work that’s gone into it, city and port authority officials were pleased and emotional to see the deal moving forward. Dankert presented the details of the deal to the port authority board on the deal, and he thanked several groups, including Hy-Vee for sticking with the project.

“They very easily could have walked away from the project and just remodeled their existing store,” he said. “It probably would have been easier for them, but they stuck with this project.”

Dankert also thanked the Hormel Foundation for kicking in about $3.5 million to acquire the mall.

“Without them, this project doesn’t even happen,” Dankert said.

Dankert briefly choked up when thanking Byram and city staffers Ann Kasel and Jon Erichson for their work with the project.

“Without them, we wouldn’t be here, guys,” Dankert said.

McCarthy stepped in to thank Dankert for his “dogged determination” for getting the mall deal done when negotiations stalled several months ago.

“It was a long time coming,” McCarthy said. “I think we accomplished something good here this morning.”