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Cottage Grove Rainbow Foods store to be sold or closed

The Cottage Grove Rainbow Foods store will close if it is not sold, the company said.

The Cottage Grove Rainbow Foods store will close if it is not sold, the company confirmed.

The Cottage Grove store is among nine in Minnesota that Rainbow Foods owner Roundy’s is trying to sell, following the sale of its other 18 supermarkets in the state. The Milwaukee-based company is exiting the Minnesota market altogether.

The Cottage Grove location will close if it is not purchased, said Jim Hyland, Roundy’s vice president of public affairs. However, Hyland said the company has not announced a “closing timeframe” if the store is not sold.

Cottage Grove Mayor Myron Bailey said Friday that talks are under way with a potential buyer.

“I don’t know if there is anyone specific that is going to buy it,” he said, “but I am aware that we are talking with someone about the location. So there is an end user interested.”

While Bailey declined to specify whether the prospective business is another grocer, he did said it was a retailer.

The city has also reached out to Des Moines, Iowa-based Hy-Vee, which announced earlier this year that it was bringing new stores to the Twin Cities.

Aside from confirming the first store’s location will be in New Hope, a Hy-Vee representative declined to say if Cottage Grove or any other east metro city was being scouted.

“The thing with Hy-Vee is they are usually a bigger store and generally do new builds,” Bailey said. “This allows them to design their own stores to fit their needs. We could possibly facilitate that.”

While discussions with Hy-Vee are in their infancy, Bailey said if the store purchases the Rainbow property and decides to build,  he said “we would be open to that.”

Rainbow is one of four large-scale grocery retailers in Cottage Grove; it competes with Cub Foods, Target and now Walmart, which opened earlier this year.

Rainbow’s leased space anchors one end of a commercial complex at 80th Street and East Point Douglas Road. At the other end of that complex sits the vacant Home Depot building.

If no buyer comes forward for the grocery store, it would leave another large retail building in the complex empty, an outcome Bailey said he has kept in mind.

“My concern is that if Rainbow isn’t sold and is left vacant that it could have an effect on the final decision as it relates to Home Depot,” he said.

Bailey said several “interested parties” have submitted bids for the Home Depot site, including L.A. Fitness.

“The project is moving forward and we do have interested parties that have various end users in mind for the property,” he said.

The recent announcement by Roundy’s officials, however, will not hinder progress at the vacant Hollywood Video site, adjacent from Home Depot. Bailey said both Noodles & Company and Chipotle have submitted letters of intent and demolition of the property is expected to begin soon.

Roundy’s announced Wednesday it had sold 18 of its 27 Minnesota stores. Ten will become Cub Foods stores, two -- including the Woodbury location -- will be Byerly’s, and six will remain as Rainbow stores but under new ownership.

“It’s disappointing,” Bailey said of the closure. “But on the other hand I am looking at this situation as a glass half full instead of empty. There could be an opportunity to truly redevelop this mall.”