Spokane County settles $5 million debt to Costco

In 2017, Spokane County promised to pay Costco about $5 million if it built one of its wholesale retail stores in its jurisdiction.

Now it’s time to pay up.

County CEO Scott Simmons said the agreement helped persuade Costco to build its 166,000-square-foot facility outside of city limits and into the county’s taxable area.

“The commissioners had already put $5 million aside. We always knew that reimbursement was going to come,” Simmons said.

“But Costco finally said, ‘Hey, we forgot about this. Can we finally get our money?’ ”

The deal stipulated that the Issaquah, Washington-based company is responsible for improvements to the site at 12020 N. Newport Highway, including the construction of a roundabout on the highway, stormwater systems, an access road and sidewalks. In return, the county would give it about $5 million.

The development of the area was completed in 2018. County officials determined they liked the final product, but the issue wasn’t resolved until Tuesday when county commissioners unanimously agreed to pay back Costco.

According to Simmons, the deal turned out to be a sound investment by the county. Not only does he anticipate that Costco spent more than $5 million developing the site, but the county also gained a new source of income.

“If not for the development,” Simmons said of Costco, “the county would not have been able to enjoy the sales tax revenues.”

Simmons could not be specific, but industry experts estimated Costco should generate about $1 million is tax revenue annually, according to previous Spokesman-Review reports.

The agreement is not unique, though, according to Simmons.

The county has similar arrangements for projects such as the $1.1 billion River District outside of Liberty Lake, the $40 million Vistas at Beacon Hill and efforts to improve roadways on the West Plains.

Costco’s relative location to the Newport Highway and North Spokane Corridor gives it ample opportunity to attract shoppers. In addition, the planned Mead Works Development should bring about 1,400 homes immediately adjacent to the store.

“They are very particular about doing their research,” Simmons said of Costco. “They’re very sophisticated, and they knew that that’s a growing area.”