The city of Kenai has received word that Lowe’s Home Improvement Warehouse will not be building a retail and garden center across Marathon Road from the proposed Wal-Mart Super Center, at least not this year.
Lowe’s had planned to build a 139,000 square-foot store and 32,000 square-foot garden center on 15 acres of city land.
In January 2006, the firm applied to lease the land from the city. Then, after about one year, Lowe’s instead proposed purchasing the city property. The sale contract was never signed.
“Lowe’s is not going to move forward with construction this year,” City Manager Rick Koch said Wednesday.
“They want to keep their options open for the 2008 (construction) season ... while they determine the financial feasibility of the project,” he said.
The parcel borders the Homer Electric Association access road on the north, three privately owned vacant lots on Airport Way to the west and nine smaller vacant lots to the south. Lowe’s would have needed to purchase one of the smaller lots in order to build an access road to Airport Way.
Originally, Lowe’s indicated construction would begin in April 2007, and hoped to be open for business by Thanksgiving Day this year.
The estimated value of the improvement was approximately $15 million, and estimated tax revenue to the city would be about half that estimated for the proposed Wal-Mart, which was put at $1 million annually.
The Lowe’s center was expected to employ about 100 people.
Lowe’s earlier expressed concerns over soils in the area where it plans to build its retail store along Marathon Road. Koch said then, the issue involved uncompacted sandy soil beneath the ground.
Vehicle access to the store would be from Airport Way as well as two driveways off Marathon Road. Additional access would be from the HEA access road.
The city manager has signed a purchase agreement for the sale of nearby city land to Wal-Mart for a combination grocery and retail store to be built behind the Kenai Chrysler Center. The giant retailer has applied for a U.S. Army corps of Engineers wetlands mitigation permit required for about 1 1/2 acres of the property, which has been designated wetlands.
Wal-Mart already agreed to the purchase of 38 acres for $3,580,000. The contract has been sent to Wal-Mart for signature.
Under terms of the contract, Wal-Mart agrees to build a store of not less than 170,000 square feet within four years of the close of the sale.
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