HUNTSVILLE – The Huntsville City Council has approved a development agreement to bring a new grocery retailer to the Huntsville market.

Food City will invest $90 million to build six new stores and create 1,350 jobs over the next five years.

In turn, the City of Huntsville will provide cost reimbursements up to $9 million (total for all six locations opened) in sales tax to offset a portion of the company’s infrastructure costs incurred for construction of the six locations. Projected revenues calculate a two-year return on investment for the City (or Projected revenues indicate the City will recover its investment within two years).  The Company will not qualify for any cost reimbursements until all stores are completed and open to the public.

The first three locations, outlined in Phase I of the agreement, include retail sites in Hampton Cove, on North Memorial Parkway and U.S. 72 East. Locations in Phase II will be near downtown, on Alabama 53 and County Line Road. All Food City locations will offer additional retail space for lease to create new retail centers.

“Huntsville’s growth has provided new opportunities to expand our retail offerings, particularly in the grocery sector where some areas are presently underserved,” Shane Davis, Director of Urban and Economic Development said. “Food City has a strong reputation as a quality retailer and being a good community partner. They will be an excellent addition to the Huntsville market.  This partnership allows Huntsville to secure all six store locations planned to service the Huntsville-Madison County market.  This is a win-win in that we are able to provide new retail opportunities to areas that need better retail options and the new revenues can be invested back into the community for public infrastructure projects.”

Food City is owned by K-VA-T Food Stores, Inc., a privately held family and employee-owned corporation. The Virginia-based retailer has more than 140 stores in Virginia, Kentucky, Georgia, Tennessee and Alabama.

Grocery store amenities include full-service grocery options, custom prime meat and seafood departments, a Starbucks coffee shop, full-service deli and bakery, pharmacy and floral services, and a fuel center in select locations.

Construction on Phase I is expected to start in May with the first store opening this fall.