CEDAR FALLS -- Target Corp. has announced plans to build an approximately 400,000-square-foot cold-storage perishable grocery distribution warehouse adjacent to its massive 1.4 million-square-foot Target Distribution Center in the Cedar Falls Industrial Park.

The new warehouse will cost approximately $30 million to $35 million to build. Total investment in the project, including refrigeration and other equipment, would be about $80 million to $90 million.

At that cost it would be the largest single commercial project in Cedar Falls since the current Target distribution center was built in 2001-03. Construction is anticipated to begin in late summer and the facility would be operational in August 2009.

Among local private-sector projects currently under construction in the metro area, only two would be larger -- Isle of Capri's Waterloo casino and John Deere's multi-year redevelopment of its Westfield Avenue and East Donald Street facilities, now nearing completion.

With its existing and proposed warehouses, "Target Corp. will be approaching an investment in buildings machinery and equipment of close to $200 million," said Bob Seymour, economic development manager for the city of Cedar Falls.

"This is a major, major impact. And that doesn't include the employee payroll, the spin-off activity for suppliers and trucking and drivers and all that type of thing. That's a significant investment in the Cedar Valley," he said.

The new center would employ a minimum of 100 within three years. The present Target Distribution Center employs about 600, making Minneapolis-based Target Cedar Falls' largest private employer. The existing warehouse distributes dry goods merchandise to Target retail stores. The proposed warehouse would serve the grocery portion of many of those stores.

"We looked at a wide variety of locations for a new distribution center," said Lena Michaud, a Target Corporation spokesperson. "What we looked at in Cedar Falls was a chance to create a campus atmosphere. It allows us to leverage the existing facility and investment in Cedar Falls."

Michaud said the company plans to break ground on the project this fall, with the facility expected to be operational in summer 2009.

Frozen foods, refrigerated foods and fresh produce will be warehoused at the Cedar Falls store for primary distribution to stores throughout the Midwest. It is the second such facility the company will build and the first one located adjacent to an existing Target distribution center.

The first such distribution center will be located in Lake City, Fla. That center was announced in January and is expected to be up and running in 2008.

The company has been partnering with Supervalu since 2003 in providing frozen, refrigerated and fresh produce items to Target stores.

Target officials were not available for comment this morning.

The Cedar Falls City Council, possibly at meetings in May, will be asked to approve a development agreement with Target on the project setting out a number of public incentives.

Those incentives include:

-- A donation of about 60 acres of land.

-- A five-year graduated partial property tax exemption. Seventy-five percent of the building's valuation would be exempt from taxation the first year, with that exemption decreasing by 15 percent per year until the building's full valuation is on the tax rolls. The facility will be paying full property taxes, estimated at $1.2 million annually, at the end of five years.

--Some public infrastructure improvements, done in cooperation with Cedar Falls Utilities.

Also, applications will be sought for assistance from the state Community Economic Betterment Account program, and investment tax credits under the state's high-quality job creation program. A $500,000 CEBA loan was secured for the first Target project here.

Final total figures on the incentive package have yet to be completed.

City and Greater Cedar Valley Alliance officials have been working with Target on the project for about eight months. Cedar Falls was one of a number of Midwestern communities Target looked at for the facility. Like the first project, it was a prospect passed on to Cedar Falls from the Iowa Department of Economic Development through the Alliance, both of which helped the city.

Cedar Falls had an advantage because it had previously worked with Target and had a site and utilities already available nearby. In fact, the city had just purchased an additional 96 acres of land adjacent to the existing Target center in August from the estate of Hazel Anderson. The new warehouse will sit on a portion of that property.

"This project did not appear on the radar screen until after we had made that acquisition," Seymour said. "We'd like to think we're brilliant," he joked, but it was a fortunate series of events. The city had been in a dialogue with Anderson and her attorney prior to her death earlier in 2006.

Cedar Falls Utilities' recent construction of a new substation on West Ridgeway Avenue across from Country Terrace mobile home park also provided the area a vital second power source, supplementing another substation at Iowa Highway 58 and Greenhill Road near the El Dorado Heights residential area.

"This will be a major, major electrical user, and that was one of the key factors in their location decision process, was having dual power feeds," Seymour said. "We were able to double-feed this facility to ensure power reliability.

"This has been a true team effort of a lot of different folks in the Cedar Valley," Seymour said. "Every city department has played some role," as well as Cedar Falls Utilities. "The Greater Cedar Valley Alliance has been a major player with us."

A recently updated GCVA "laborshed" survey of local employers was "very, very important" in securing the project, Seymour said. "Labor was a huge factor in here." Seymour indicated Target has been pleased with its local work force, and the study indicated, among other things, that Target could expect to attract sufficient additional quality employees to staff a second warehouse.

Courier Staff Writer Jon Ericson contributed to this report.

Contact Pat Kinney at (319) 291-1484 or Pat.Kinney@wcfcourier.com