Johnstown council approves incentives for Kroger

JOHNSTOWN — With just a single question asked, the Johnstown Town Council approved an incentive agreement with the Kroger Co. (NYSE: KR) Monday night to establish an ecommerce fulfillment center in the community.

Councilmember Vanessa Dominguez asked whether the operation might provide a larger variety of foods suitable for people with food allergy issues. The answer: yes, over time.

The issue before the council was whether to extend a personal property tax exemption and a rebate of building permit fees to Kroger if it establishes the fulfillment center by mid-year 2023 and hires at least 100 people by June 30, 2024.

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Kroger is well on the way to meeting those terms.

Chad Garcia, who represented Kroger at the meeting, said the company plans to officially open the center by Feb. 22.

The center will be located in one of the three buildings under construction at Trade@2534, which is just south of U.S. Highway 34 and east of the Scheels sporting goods store.

Garcia noted that the Johnstown center will be part of a hub and spoke design, and the facility may take the name of either NoCo Spoke or Johnstown Spoke. 

When a customer orders food via the Kroger app, it comes out of the Denver hub location — called “the shed” by Kroger. The shed contains the equivalent of 26 brick and mortar Kroger grocery stores, Garcia said. Refrigerated trucks bring the food north to the spoke location, and it is distributed to households from there.

The hub and spoke system “has been around about two years” for Kroger, he said.

The town council voted unanimously, with council member Jesse Molinar Jr. absent, to approve the incentives.

If Kroger meets the terms, it will receive a 50% reduction in personal property taxes for 10 years and a one-time 75% rebate of building permit fees paid during the construction phase, town economic development manager Sarah Crosthwaite told the council.

She also said that Larimer County has offered workforce services as part of the deal.