Posted Online: Jan. 22, 2013, 5:57 pm

Bakery's lease complicates RI Walmart plan

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By Eric Timmons, etimmons@qconline.com

The city of Rock Island has yet to agree on a relocation assistance package with the owners of Hill & Valley Bakery, a key property the city needs to clear the way for a new Walmart at Watch Tower Plaza.

The owners of the bakery have an option to renew their lease for five years and could choose not to move, which would complicate the arrival of Walmart to the shopping center site on 11th Street.

"We'd like to move, but there's a cost to move that's pretty significant," said Hill & Valley president Doug Davidson.

City officials are keen to keep the bakery and its 200 employees in Rock Island, butMr. Davidson said moving the bakery will be complicated and expensive.

George and Nancy Coin sold the former Nancy's Pies business to New York-based equity investment firm Circle Peak Capital in 2005 but still own the building that houses the bakery at 3915 9th St.

The Coins lease the building to Hill & Valley, and, under terms of the lease,Hill & Valley could decide to stay put for another five years, according to Mr. Davidson.

The Rock Island City Council approved a proposed $1.5 million agreement to buy the building from the Coins in December.

Jeff Eder, Rock Island's economic development director, expressed confidence that a relocation package would be agreed on soon.

The city is attempting to buy all the lots at Watch Tower to make way for development of a Walmart Supercenter.

The city also is working on relocation assistance packages with several other businesses that lease spots at Watch Tower.Hill & Valley is the largest business at the site, and the most complicated to move.

Mr. Eder said the city had to convince the board of Circle Peak Capital to move Hill & Valley.But if they decide against moving, it might be possible to redesign the Walmart site to leave the bakery in place.

"We'd have a lot of work to do to redesign the shopping center," he said. "It's a possibility, but it wouldn't lay out things ideally."

The city also could use eminent domain - a legal process governments can use to force an owner to sell a property - to take ownership of the bakery.

"It is an option," Mr. Eder said. "We don't want to use it."

To date, the city has agreed to spend more than $6 million to buy properties at Watch Tower. Still to come is the cost of demolishing buildings and the cost of relocation packages for some of the businesses that will move from the shopping center.