Big Y pulls out of Holyoke project, citing 'increasing costs' and 'unforeseen conditions'

HOLYOKEBig Y Foods Inc. will not move forward with plans for a supermarket in Holyoke.

"Economic conditions as well as increasing costs due to time and unforeseen conditions have altered the business model for their proposed location at the former Atlas-Copco site located on the northeast side of the intersection of Homestead Avenue and Lower Westfield Road," the chain wrote in an emailed news release Wednesday. "Coupled with the slow economic recovery and uncertainty in the region, the proposed site no longer fits with the company's long term objectives."

After Big Y announced its plans in 2011, mega retailer Walmart announced plans for a combination discount department store and grocery store nearby on Whiting Farms Road. That Walmart proposal remains controversial, however, and has become a political issue in Holyoke's upcoming mayoral race.

Big Y said it is not unusual for retail developments of this size and scope to take years to come to fruition in New England, and as such they are subject to this kind of reevaluation – especially as costs escalate. The cost of the project was originally estimated at $12 million.

Big Y president Charles L. D’Amour said in a prepared statement: “I want to personally thank Mayor Morse and city officials for welcoming us and working with us on a difficult site. But delays at the state level coupled with a sluggish economy have made this project untenable. We are saddened to not have the opportunity to move forward with this project in Holyoke.”

Morse said Big Y's decision was disappointing, but he understood the rationale.

"We will move forward with the traffic improvements at that intersection, as we expect a retail project to move forward on that site with or without Big Y," Morse said.

"The city recently completed the (land) takings to widen the intersection, and that will continue, both because it is needed, and because it is also an issue of site readiness. We also look forward to working on the redevelopment of the Holyoke Hotel complex in the coming months, a parcel down the street."

Claire D’Amour-Daley, vice president corporate communications for Big Y, said the decision was a result of an updated market analysis of Holyoke and how it fits in with Big Y’s ever-evolving business model.

“Walmart was a factor,” she said. “But you also have Target right up the street selling groceries. And even if Walmart doesn’t get approval for that site, you could have something else go in there.”

D’Amour-Daley said O’Connell Development Group, the people who would have developed the Big Y at Atlas-Copco, now have the opportunity to pitch that site to another supermarket chain with a different business model.

She said it takes a long time, especially in New England, to bring a supermarket proposal to completion. Big Y started working on the Holyoke proposal in 2010.

“At any given time we have about a dozen proposals going,” D’Amour-Daley said. “Maybe one of two of those turn into stores in the end.”

“Our business model is always changing, personnel costs are always changing,” she said. “We just thought it was more prudent to make that $12 million investment somewhere else.

“We are not abandoning the city,” D’Amour-Daley said.” We continue to draw heavily from the city, especially at our South Hadley store.”

Big Y recently completed renovations at their Ludlow and Southbridge locations, as well as their Tolland, Conn., market. The company has announced plans to open a World Class Market in Old Saybrook, Conn., in 2014, along with extensive remodeling efforts in several stores including locations in Pittsfield, Westfield, Southampton, Longmeadow and Newtown, Conn.

Headquartered in Springfield, Big Y is one of the largest independently owned supermarket chains in New England. The company currently operate 61 locations throughout Connecticut and Massachusetts and employs over 10,000 people.

Some Holyokers are eager to get a Big Y supermarket in the Paper City.

If you purchase a product or register for an account through a link on our site, we may receive compensation. By using this site, you consent to our User Agreement and agree that your clicks, interactions, and personal information may be collected, recorded, and/or stored by us and social media and other third-party partners in accordance with our Privacy Policy.