Plans for a new Hy-Vee grocery store in Stillwater have fallen through, and the developer of the site at the southeast corner of Minnesota 36 and Manning Avenue is looking for a new grocer to take its spot.
Summit Management’s Mark Lambert said Friday that his company and Hy-Vee have agreed to part ways after seven years of negotiations at the Central Commons site.
“We basically agreed to separate, and I got my site back,” Lambert said. “I felt it was more important for us to have the momentum going forward than to be in a position where we didn’t know when – and if – they were going to build the store.”
Lambert said both parties agreed it wasn’t “the right place and the right time” for Hy-Vee to build there.
“What that means is that I now have a very nice grocer location that I am marketing to other grocery stores,” Lambert said.
Officials from Hy-Vee, based in West Des Moines, Iowa, did not immediately return a phone call seeking comment.
Mixed-use development
Plans call for Central Commons, a $50 million mixed-use development, to include 190 units of luxury apartments, retail and a convenience store, Lambert said.
Key to developing the site will be finding a grocery store to anchor the project, he said.
“We know there are several great grocers in the area,” he said. “My hope is to kind of re-grocer the site, if you will, and that we’ll find another grocer that wants that location.”
A site map showing the layout for the Central Commons development on the southeast corner of Minnesota 36 and Manning Avenue in Stillwater. (Courtesy of Summit Management)
The road leading to the development – the 58th Street extension – is scheduled to be completed next spring, “so I’m hoping by summer of 2026, we’ll have full access and a very marketable site,” he said.
The site is being developed to accommodate an up to 95,000-square-foot grocery store and 4,000-square-foot convenience store on the property, which the city of Stillwater annexed from Stillwater Township in 2020. There’s also the possibility of a hotel, more apartments and additional retail, he said.
Prime location
An aerial photograph taken Thursday, Aug. 28, 2025, shows the site of the future Central Commons development, located on the southeast corner of Minnesota 36 and Manning Avenue in Stillwater. Pictured on the left is the future home of the new Lakeview Hospital in Stillwater. (Courtesy of Summit Management)
The site is in a prime location, just south of the new $400 million Lakeview Hospital campus at the northeast corner of Minnesota 36 and Manning Avenue in Stillwater.
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“We’re still excited about (the project),” Lambert said. “I mean, it’s an amazing corner. It’s right across from the new hospital. … While we’re disappointed we weren’t able to continue our partnership with Hy-Vee, we’re excited about identifying a new partner to continue the work we’ve done the last seven years on this site.”
Stillwater Mayor Ted Kozlowski said he is confident that another grocer will decide to build at the site.
“I really think there will be something cool that lands in that spot, so I’m not too worried about the future of it,” he said. “There are a lot of really cool options. I was just at the new Kowalski’s they built over in Edina. Boy, would I love to see that in Stillwater, like, that is the sexiest grocery store I’ve ever seen in my life. It’s really, really nice. I’m ready to call the CEO.”
Kowalski’s operates a store in Oak Park Heights, just east of the Central Commons site.
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