SALEM — The proposed $25 million Lowe's development on Highland Avenue appears dead.
Mayor Kim Driscoll got the bad news yesterday during a meeting in her City Hall office with regional officials from the national home improvement chain.
"They indicated they did not expect to be moving forward with the Salem store," Driscoll said.
The news comes in the wake of Lowe's announcement this week that it is closing 20 underperforming stores nationwide, including one in Haverhill.
The company also announced Monday that it is scaling back its expansion plans and will open only 10 to 15 stores a year in North America rather than the planned 30. The Salem store appears to be part of that cutback.
However, yesterday's news still comes as a shock.
Just two weeks ago, the project won an important court victory when a judge dismissed all but one of the allegations in a lawsuit filed by the city of Lynn.
The planned development on the Salem-Lynn line had sparked concerns, largely from Lynn residents just across the border, over traffic, water runoff and other issues.
For Driscoll, the news is a major setback. The project was expected to create 125 jobs and produce annual tax revenues of $225,000 — money the city desperately needs, as Salem Harbor Station power plant, its major taxpayer, makes plans to close.
"I was extremely disappointed," the mayor said. "There aren't many new developments in Salem bringing in that kind of revenue."
Driscoll reached out to Lowe's officials this week after hearing news reports that the company was closing stores. However, she was not expecting bad news.
City officials had held an upbeat meeting with Lowe's officials recently to go over the status of the project. The company seemed eager to move ahead, having secured nearly all its local permits and done preliminary work on the project, Driscoll said. They also were talking of filing for a state environmental license this fall.
"We talked about a spring construction date," the mayor said.
Driscoll said she asked the company to "revisit their decision." The regional representatives agreed to talk with officials at Lowe's headquarters.
The mayor, however, seemed realistic about her chances.
"We've asked them to reconsider, but I'm not hopeful anything will change," she said. "This sounds like more of a national corporate decision than anything local."
In the end, it appears the economy, not the courts, killed the project.
Lowe's decision to close underperforming stores will affect about 1,950 employees, the company said.
The retail giant operates 1,725 stores in the U.S., Mexico and Canada.
Salem officials have been working on this project for several years.
To clear the way for the combined Lowe's-Walmart development, the City Council approved a zoning change and a tax break of $25,000 a year for five years.
Earlier this year, the Planning Board approved the development, imposing a number of conditions in an attempt to address neighbors' concerns.
Lowe's intended to build a new store, a garden center and a 378-space parking lot. Walmart planned to demolish its existing store and replace it with a larger one.
The project also was to include the installation of a new municipal water tank.
Driscoll said she does not know what impact this will have on Walmart, but she noted that the project was complex and intertwined, and that the companies planned to share costs.
"We're not sure what their status is," Driscoll said of Walmart. "They seem very interested. I'll have a better understanding of that after I meet with officials."
Whatever happens, Driscoll said she plans to stay focused on Highland Avenue.
"I'm hopeful we can still figure out a development plan for that site," she said.
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