Costco eyes move north out of Spokane city limits

Wholesale retailer Costco has filed preliminary plans to move the company’s store on Division Street farther north and take a lucrative sales tax generator outside city limits.

A preliminary site plan filed last month with the Spokane County Building and Planning Department calls for the construction of a 160,000-square-foot warehouse on 15 acres of land currently owned by Kaiser Aluminum. The proposed store would be built on a forested plot northwest of the old Kaiser smelting operation, between U.S. Highway 2 and the future North Spokane Corridor. Timber harvest has already been approved on the land.

Bob Wrigley, the county’s chief budget officer, said it’s uncertain how much in sales tax revenue the store could generate. But a large retailer would be highly desirable for the county, which had seen lagging sales tax receipts before a 6 percent increase in 2014.

“No doubt about it,” Wrigley said. “Anytime you get a Costco, or a Walmart, or a Lowe’s, any kind of big retail store, those are all pluses.”

Spokane City Council President Ben Stuckart said staff had worked with Costco over the past several years to try to find a new location within city limits, but were unable to do so.

“They gave us parameters, and we really tried to find some space in the city,” Stuckart said, noting there wasn’t a lot of room within city limits, north of the river, for the acreage Costco was looking for. “Obviously that didn’t come to fruition.”

A representative of Costco’s real estate acquisition team declined to comment on the company’s plans. The store at 7619 N. Division St., which opened in October 1992, has not been listed for sale and the plans filed with the county contain no timeline for building construction. Various agencies, including Spokane Fire District 9, the Washington Department of Transportation and the Spokane Regional Clean Air Agency are reviewing the preliminary plans from Costco.

The new store would be built with 819 parking stalls on a plot that was zoned for mixed-use development in 2004.

The move about 2.5 miles north up U.S. 2 would shift another location of the Issaquah-based retailer outside city limits. A former warehouse store on Third Avenue moved to Sprague Avenue, a location that was incorporated by Spokane Valley. The store on Division was originally in an unincorporated part of the county, but the city of Spokane launched a dogged annexation effort in 2006 that prompted legal threats from the county.

The city and county eventually agreed to a temporary revenue-sharing agreement to avoid a lengthy legal fight. Commissioner Todd Mielke indicated at the time of the annexation that Costco was already considering moving from its Division location.

Gavin Cooley, the city’s chief financial officer, said he couldn’t speak about sales tax receipts of individual businesses because of an agreement with the Washington Department of Revenue. The reported sales at an average Costco warehouse would put at least $1 million in annual sales tax revenue at stake.

Stuckart said if Costco moved, the loss of city sales tax revenue would be disappointing, but at least the dollars would stay local.

“As long as it’s staying in the county, that’s a good thing,” Stuckart said.

If the building plan is approved and Costco decides to move the store, it would mean more retail space for shoppers and a larger refueling area for motorists. The current warehouse store, remodeled in 2007, has about 134,000 square feet of retail space. Its gas station, which was built in 1997, is 2,400 square feet, according to Spokane County Assessor records.

The new store would expand by about 26,000 square feet, and its gas station calls for 7,500 square feet of space, according to the plans filed with the county in December.