Printed on: November 26, 2013

Rexburg set to retool

Ace Hardware relocating to site on long-vacant lot


REXBURG -- After seven years, there's an end in sight for the revitalization of downtown Rexburg at the corner of Main Street and First East.

Upper Valley businessman Daniel Moldenhauer, the owner of Ace Hardware in Rexburg and St. Anthony, will move his Rexburg store from Second East to a new 24,000-square-foot, two-story building under construction on the environmentally blighted lot on Main Street. It will be completed in March.

The site formerly was home to the Madison Co-op (now Valley Wide Cooperative) and is ground zero for a large underground gas plume that contaminated soil and groundwater from the property, across Main Street into the parking lot behind Porter's.

"We want to set an example for revitalizing businesses ... and strengthening the downtown area," Moldenhauer said. "We want this to look and feel like it belongs downtown."

The new store and an adjacent parking lot built by Madison County in 2011 promise to bring 18 to 20 new jobs downtown. Job creation was a requirement for a $400,000 Community Development Block grant given to Madison in 2010 by the Idaho Department of Commerce to revitalize the area.

The county applied for the grant after reaching a purchase agreement with Morgan Construction of Idaho Falls. The near-yearlong negotiations hit repeated legal and environmental snags before the sale went through in 2010.

Morgan Construction planned to build a commercial clock-tower building for retail or restaurants. Per the grant's stipulations, Morgan Construction promised to attract businesses that would provide a dozen jobs.

Grant money paid for infrastructure and the parking lot, grant manager Ted Hendricks said. Hendricks and The Development Co. manage the grant for Madison County. The parking lot was built to allow surrounding businesses to expand and provide an additional six to eight new jobs.

But after the parking lot was complete, Morgan Construction was unable to find tenants for its planned building. It sold the property to the Moldenhauer family in February, Morgan Construction representatives said. The sale included the requirement for job creation.

Moldenhauer bought the property because the location is more community-accessible. He plans to meet the job requirement by leasing top-floor office space to business tenants.

"This will make it more convenient for the community to reach us," Moldenhauer said. "We are moving ourselves closer to the main population center of Rexburg, bringing us closer to small businesses, apartment complex managers, the city and college students."

Despite the benefit, the property comes with some strings.

The Idaho Department of Environmental Quality required that a vapor extraction system be built underneath the building's foundation as a precaution against any petroleum vapors leaking up from the soil.

"We've required them to protect indoor air as a precaution," DEQ representative Rick Jarvis said. "This site still has impacted groundwater over the years, and we still are working with Valley Wide to address that over the long haul. Right now the (gas) concentration is low, but it still doesn't meet drinking water standards."

The gas plume is the result of leaky gas storage tanks that leached petroleum into the soil for many years prior to their removal in 1998. The DEQ was aware of some leakage then, but the extent of the gas plume was not realized until 2004, when contaminated groundwater was found.

Valley Wide has been remediating the property since, initially removing 100 truckloads of contaminated dirt and spending years attempting to neutralize the petroleum using chemicals delivered via underground wells.

Madison County bought the property in 2005 but had trouble selling it because of its environmental liability. The lot has been empty since 2006. Madison County considered multiple options for the site, including a park, before selling the property to Morgan Construction. As part of the sale, Madison retained some environmental liability alongside Valley Wide.

Morgan Construction was released of all liability with the sale to the Moldenhauer family.

One of the big draws of purchasing the property, Moldenhauer said, was that any future environmental problems would first be the responsibility of Valley Wide and Madison County before his business was liable.

The DEQ and Valley Wide will continue monitoring the site and working to remediate the environmental contamination, likely for many years, Jarvis said. But it shouldn't have much effect on Ace Hardware.

"Monitoring and possibly additional cleanup work may be required," Jarvis said. "But the consent order (remains) with Valley Wide, and they have been actively doing everything the agency has asked."

Reporter Nate Sunderland can be reached at 542-6763.