Friday, March 31, 2023
March 31, 2023

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Ridgefield cutting Costco a break of up to $2.5 million

City says financial benefits of warehouse store are likely to outweigh waiver of fees

By , Columbian staff writer

Costco is getting a multimillion-dollar break from the city of Ridgefield to build its proposed 160,000-square-foot warehouse store.

On Thursday, the city council unanimously approved adding the retail giant to its economic catalyst program, which will allow the city to waive land-use planning, building permit, civil engineering and traffic impact fees.

The council approved waiving up to $2.5 million in fees under the program.

Costco announced in July that it planned to build a warehouse store in Ridgefield near the Interstate 5 junction, just north of Pioneer Street. It will be the third Costco Warehouse in Clark County; the two other stores are on Northeast 84th Street in Vancouver and on Southeast First Street in Camas.

The economic program is “an ordinance to encourage development of employment and commercial uses that create an economic uplift that have a catalytic effect in the area,” City Manager Steve Stuart told the council.

The fees to be waived include $5,800 in land-use planning permit fees, $50,000 in building permit fees, $17,000 in civil engineering fees and $2.3 million in traffic impact fees, which is based on an estimated 4,792 daily trips.

The financial benefit to the city from the new development could substantially outweigh the fees waived, according to the city. A February 2022 analysis said the Costco development will result in $134,000 a year in property taxes for all taxing districts and $5.6 million in sales tax revenue, of which Ridgefield will receive $687,000.

Over 20 years, the net present value of revenues to the city is estimated at $10.37 million, a staff report states.

Construction of the new store is expected to create 167 jobs with an annual payroll of $9.3 million. Ongoing annual operations are expected to create 320 jobs with $13.7 million in annual payroll, the report states.

There is also the one-time sales tax revenue from construction of the building estimated at $1.24 million, of which Ridgefield will receive $150,000.

Stuart said Costco has already submitted a land-use application and has been working with the city on the building design to fit Ridgefield’s specific design standards. He said that once the building is complete, it will set the bar for other development in the area.

“Due to the nature of the project, the location of the project and its ‘first in’ status at the junction, it has an opportunity to create an iconic design that is Ridgefield-specific and that can create better benefit to the buildings around it,” Stuart said.

Although it was created in 2018, the first use of the economic catalyst program by the city came in 2019 when Rosauers Supermarkets was looking to build a new store in the city’s Discovery Ridge area. Stuart said the city’s $1 million investment in that project was offset by more than the $100,000 in annual sales tax revenue from Rosauers.

“We received that, but the return on investment that was shown with Rosauers isn’t just about Rosauers. It’s the additional revenue from other businesses that have come in,” Stuart told the council.

With the fee waiver now in place, the city will continue to work with Costco to finalize development plans.