photo by: Chad Lawhorn/Journal-World

The Dillons grocery store on West 23rd Street is pictured on May 7, 2024.

Updated at 3:04 p.m. Tuesday, May 7

Dillons plans to replace its longtime grocery store on 23rd Street with a larger store on Iowa Street that will be part of a major new commercial development on KU’s West Campus.

Dillons and KU Endowment — the owner of the West Campus property — announced the plans Tuesday morning after the Journal-World began inquiring about speculation surrounding the project.

The new store will be located near the northwest corner of Iowa Street and Clinton Parkway, or about 1 mile west of its current location on 23rd Street. (23rd Street becomes Clinton Parkway west of Iowa Street.) Specifically, the store will be located about one block north of 23rd Street/Clinton Parkway. The store will face north, and its parking lot and main entrance will be near the 21st and Iowa Street intersection, where KU and the city recently installed a traffic signal to allow motorists to turn into the developing West Campus area.

Construction on the new store is expected to begin this summer. A Dillons spokeswoman told the Journal-World that the existing store on 23rd Street would remain open until the new store on Iowa Street is completed.

photo by: Chad Lawhorn/Journal-World

Dillons plans to construct a grocery store on this site near 21st and Iowa streets on KU’s West Campus. The store would be near where the nearest soccer goals are shown in the photo, with a parking lot and potentially restaurant and other secondary buildings in the foreground. The site is pictured on May 7, 2024.

At 86,000 square feet, Dillons said, the new store will offer about 30,000 square feet of additional retail space compared with what the West 23rd Street store currently offers. Dillons expects to invest $30 million in the Lawrence project, and it also anticipates hiring an additional 150 employees to work at the larger store. A Dillons spokeswoman said the store would be similar in size and feel to the company’s grocery store at Sixth Street and Wakarusa Drive in west Lawrence.

“We’re honored to have served the community of Lawrence since 1960 and are excited to increase job opportunities and expand access to fresh and affordable food for everyone,” said Steve Dreher, president of Dillon Stores. “Most importantly, this store represents an opportunity for our customers to experience the very best Dillons has to offer with a brand-new store, a fresh look at one-stop shopping and the friendliest service.”

Dillons spokeswoman Sheila Regehr said virtually every department of the store would be larger and would carry more products.

“Enhanced product lines definitely will be a showcase for this store,” Regehr said.

She said a particular emphasis would be placed on increasing supplies of fresh fruit, produce and meat. The store also will include a significant area dedicated to pickup grocery service. That part of the store will have its own section.

Other details include:

• A drive-thru pharmacy, a feature that is not offered at the 23rd Street store currently.

• An in-store Starbucks coffee shop. The Starbucks will have a larger seating area for customers than what currently is offered at the 23rd Street store

• Murray’s Cheese Shop, which sells a variety of artisan cheeses in several Dillons locations, will have an expanded presence.

Customers also should look for a different style of store fixtures and design, although the overall design concept will be familiar to Dillons customers, Regehr said. She said the Lawrence store would be the first entirely new store that the Dillons chain has constructed in about 10 years. The company, which is owned by the grocery giant Kroger, primarily operates in Kansas.

Regehr said Dillons officials were drawn to the unique West Campus development — which is known as The Crossing@KU — as an example of a new type of lifestyle in which people want more walkable neighborhoods, offices near their homes and plenty of amenities nearby.

“The overall concept is unique and exciting for Lawrence,” Regehr said. “It is exciting to think about an area that will provide so many unique opportunities to live, work and play.”

KU Endowment will continue to own the property that the grocery store and other developments will occupy. The property, because it is affiliated with the university, largely is exempt from the normal development processes of the city. KU Endowment leaders are recruiting projects for the property and approving their designs. Unlike a traditional commercial development, the plans aren’t going to Lawrence City Hall for approval.

The city and the county, though, both have been involved in bringing the project to reality. The two governments have made various approvals related to financial incentives for the project. Those incentives include property tax rebates and also the creation of a new community improvement district that will charge a special sales tax to pay for development expenses, such as the new roads, sidewalks and traffic signals that serve the development. Products sold at the grocery store will incur a special 1.5% sales tax — $1.50 for every $100 spent — that is over and above normal sales tax rates.

photo by: Douglas County GIS/Journal-World

The blue star shows the proposed site for a new Dillons grocery store on KU’s West Campus. The red star shows the location of an existing Dillons store that will close once the new store opens.

Leaders with KU Endowment had long said they wanted a grocery store to be an anchor tenant for the new West Campus development. The development will be next to existing research labs, the KU pharmacy school and a planned national security research center that KU recently won a $22 million federal appropriation to build. The idea behind The Crossing project is to put retail, housing and additional office space next to those university research labs. KU leaders are betting such amenities will be helpful in attracting private companies to the area that want to be close to KU researchers and students.

“We are proud to welcome Dillons, a brand that has its roots in Kansas, as the first major retailer in The Crossing@KU,” said Dan Martin, president of KU Endowment. “The expanded store, as well as the new employment opportunities this project will bring, are welcome additions for the Lawrence community, and will serve as a springboard for ongoing economic development in the region. The Crossing will provide a truly unique place to live, work, and play and Dillons will serve as an anchor to the experience.”

The Dillons announcement is expected to increase the number of businesses that are interested in locating in The Crossing development, said Monte Soukup, a senior vice president for KU Endowment. Soukup, who oversees KU Endowment’s real estate holdings, said the association is in advanced discussions with a housing developer who would build more than 300 apartments in a multistory building that would include an underground parking garage.

That developer, who hasn’t yet been publicly named, would construct the project just north and west of the Dillons store, taking a spot along the newly constructed Becker Drive on West Campus.

Soukup said restaurants were another type of tenant the project would try to land. The project already has attracted one financial institution. Truity Credit Union became the first announced tenant for the project last month. As the Journal-World reported, Truity announced that it would close its branch near 23rd Street and Naismith Drive and build a new, full-service branch in The Crossing development. Truity is locating in the portion of the development that is east of Iowa Street and north of 21st Street, near the City of Lawrence’s Fire Station No. 5.

Additional commercial lots remain on the portion of land east of Iowa Street. However, some of the more dense development will occur west of Iowa Street, near the 21st Street intersection. (Once 21st Street goes west of Iowa and enters the KU campus, it is known as Becker Drive.)

Eventually leaders with KU and KU Endowment envision two to three blocks of urban-style development. In addition to the multistory apartments buildings — the type you see on New Hampshire Street in downtown Lawrence — there also would be retail and restaurant buildings on the south side of Becker Drive. On the north side of Becker Drive would be multistory buildings that would house research labs and offices for KU programs and potentially private companies that want to be close to the research work happening at KU. Those buildings, Soukup said, largely would be built by KU, but KU Endowment would partner on helping make the buildings truly mixed-use structures. For instance, the ground floor of those buildings could include retail, restaurants or other similar uses.

Soukup said those types of amenities were key to making the overall West Campus area a special type of research park that would be more likely to not only attract established companies to the area, but also keep startup companies who often have started in Lawrence only to move to bigger or more elaborate complexes outside the area.

“The thing we are trying to do with the development is set ourself apart from other research parks,” Soukup said.

Soukup said he expected more announcements of tenants in future months. A second or third phase of the project also is planned to have single-family or duplex-style homes along the western edge of the development. Some of those homes will be built in partnership with Tenants to Homeowners, which provides affordable housing.

In addition to streets and utilities, The Crossing project also has completed work on a pair of new turf soccer fields for the university community. Those fields, near Clinton Parkway and Crossgate, are replacing the two fields that long had existed at the corner of 23rd and Iowa streets. While the Dillons store won’t stretch all the way to 23rd Street, the grocery store will occupy some of the area that previously was used as an athletic field.