After Fight at City Hall, Dallas Will Finally Get a Costco

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The future is bright for those of us who want a better, more sustainable wholesale option in Dallas, as the Dallas City Council voted 10-5 to approve $3 million in economic incentives to bring Costco inside the Dallas city limits. As Candy explained, the money will come from a public-private partnership fund that comes from your water bill:

It’s a pool of funds earmarked for Economic Development. The funds are actually generated from fees users of Dallas Water pay. The water department is a revenue generating operation for the city — the city charges the utility a fee in lieu of taxes. This money goes into the public/private partnership fund and can be used for whatever the City Council decides, in this case economic development.

For those of us that were so hopeful about Costco moving into the decaying eyesore that is the Steakley Chevrolet lot on Northwest Highway and Abrams, only to have those dreams squashed, this is great news. According to Costco’s own numbers, members who live south of LBJ will spend $40 million in their new store at Coit and Churchill Way. Just think of all of the Sam’s Club members that will jump ship, too. I know that I’ll be shopping at the new store once it’s constructed, and I’m not even a current wholesale club member!

The former TxDOT property will cost $16.5 million to acquire and the building — on which Costco says it will spare no expense — will cost more than $30 million. When built, it will employ 225 people, with starting wages clocking in at $13 per hour with full benefits. Costco is known for taking care of its employees, and will hopefully help to set the bar for other businesses when it comes to minimum wages.

It’s important to note that, while this was a contentious issue around the horseshoe at 1500 Marilla, one member of the City Council, Mark Clayton, tried to turn perceived lemons into lemonade for southern Dallas, according to Robert Wilonsky:

Before the item was even discussed, council member Mark Clayton tacked on an amendment that instructed the Office of Economic Development to come back to council within 90 days with a concrete plan for adding a grocery store within a food desert — a part of the city lacking easy access to fresh fruits, vegetables and healthy food.  Clayton said that if the city was going to kick in money for a superstore up north, the very least it could do was promise something to those living south of the Trinity River as well.

Clayton said his amendment was “a sincere attempt to provocatively turn around parts of the city in desperate need.”

Bravo to Clayton for the effort, even though some naysayers considered it lip service. Perhaps, though, the city could make the next large economic development dispersal contingent upon relocating to southern Dallas?

 

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Joanna England

If Executive Editor Joanna England could house hunt forever, she absolutely would. Instead she covers the North Texas housing market and the economy for CandysDirt.com. While she started out with the Real Estate Center at Texas A&M University, Joanna's work has appeared in The Dallas Morning News as well as several local media outlets. When she's not knitting or hooping, or enjoying White Rock Lake, she's behind the lens of her camera. She lives in East Dallas with her husband, son, and their furry and feathered menagerie.

Reader Interactions

Comments

  1. Robert STraschewski says

    Why is the city of Dallas giving Costco a dime? Costco will come here no matter what, that money would be far better spent on improvements to DISD.

    • mmCandy Evans says

      First of all, my initial reaction was the same. Why do we pay companies to move here? It’s called Economic Incentives, and money is budgeted for it. If Costco didn’t get it, another company would. Maybe in a different part of town. This is a very good match: the land (concrete, really) has been fallow for years, and the $3 million will help offset the high price of the land. Which is owned by TxDOT.

      Why can TxDOT not lower the dang price by $3 million? Great question. Answer: state law. Must sell for appraised value.

      I think we will get a lot out of our investment. If you want to erase all economic incentives and focus only on infrastructure repairs, like city streets, then you must voice that your your council person and shut down the office and decree: no more economic incentives. Then companies like Costco will move where they get the money, or the land is cheaper, and those cities will reap the benefits.

      Right now the folks who work at Jamba Juice in Cali are getting relocation packages to help them move to Frisco.

      • Gmit says

        Moving the JambaJuice HQ is not a valid comparison, those are new jobs that did not exist before ( at least not in DFW). That is a net gain! A new Costo location is just shifting current retail, from other parts of town, other cities, and other retailers.

        The business model of Costo is different from Wal-Mart, Costo only builds new stores when there is a great deal on property, so…more than likely they would not have built a store anyway!

        However, you both have valid points. This is how business is done, and with all the competitive municipalities in such proximity the corporations can shop around. Folks can judge for themselves if this feels dirty or not, but I would at least question the location….maybe scoot that sucker a little further from the “edge” of our city limits.

        • Jon Anderson says

          It’s called haggling, something you’ll be unsuccessful attempting in a Costco. Negotiation is for them, not you.

        • mmCandy Evans says

          Yes, I realized after I hit enter that the Jamba Juice was not a great comparison. Costco will likely hire away from other stores or munis. This IS how cities do business now, you have to bribe companies to come plop in your town. Heard this morning at The ULI breakfast that Flower Mound offers no economic incentives, hence they have little retail development compared to Frisco and Plano.

    • Chris says

      My answer, is to explain how this all works.

      When a municipality gives funds (yes, taxpayer dollars) to a company like this, to build a store, it is actually a type of INVESTMENT.

      What happens is, the city gives the millions of dollars to the company, but after that the development improves the land value of the property itself, as well as the properties around it, causing property tax revenues to go up. There are a lot of other effects that happen as well, and the end result of all this, is the city makes a “profit” on their initial investment. Technically, the taxpayer makes a profit on these deals, although the city will never reduce your taxes as a result.

  2. Alex Rawlings says

    Candy, you are a hack. A big box store in north Dallas is NOT what economic development money should be used for. Save that money for turning around the southern sector.

    Of course, not much money to be made down there by you and your vulture realtor friends so screw it I guess.

  3. dormand says

    For the past twenty years the eyesore Texas Department of Transportation site has not produced one dime of revenue for the City of Dallas.

    In that same period, the well-managed City of Plano has benefited from a massive revenue stream of property and sales taxes from Costco. It wisely has used as a funding source
    to build AND MAINTAIN the quality of life infrastructure amenities that has made Plano a corporate headquarters relocation Mecca. ( A huge amount of those taxes came from Dallasites enduring the drive north as we have no Costco here.)

    These vital infrastructure resources include magnificent youth athletic facilities including soccer pitches, swimming pools, tennis courts, softball and baseball fields and other lifetime sports sites that are available to adults for sports and fitness when not being used by the youth leagues.

    These vital Costco funds have also supported Plano’s network of public libraries that are so essential for upward mobility for those in lower income families.

    In addition to the taxes pad directly by Costco to the City of Plano in its property and sales taxes, there have been massive amounts of property taxes paid by both Costco employees and the extensive network of vendors who Costco outsources essential functions to.

    Costco is successful because ti allows decentralized decision making so its local store management can stock the exact items that a critical mass of local members have shown demand for. The Plano stores are so successful that they are a nightmare to shop at due to the long lines at the gas pumps and the checkouts. Many of the patrons in Plano emulate the social graces of New Jersey snowbirds in their annual treks to Florida for the winter,

    I have found that this overcrowding can be mitigating by driving the few extra miles to go to the Rockwall Costco. There is never a line at the gas pumps, customers are more courteous and less Type A in nature and the Costco employees there are almost as helpful as those that we have become spoiled by at Nordstrom.

    Multiple studies have shown that upper middle class consumers will pay a premium for homes that have easily accessed Costco, Trader Joe’s, and Whole Foods. These are among the site selection criteria used by many corporate task forces in locating the optimal
    places to relocate headquarters and branch facilities.

    As we now have all three convenient to Lake Highlands, expect to see even more companies joining State Farm, Raytheon, Liberty Mutual, the Dallas ISD. LH is a short commute to any of these offices, a vital consideration as our freeways become gridlocked from all of the new arrivals from other states and countries coming to Dallas.

    There are very few win-win-win scenarios. Finally landing a Costco in Dallas is certainly one.
    We owe a debt of gratitude to Councilmen McGough and Kleinman for landing this key infrastructure resource.

  4. Brenda says

    Yuck. Warehouse stores are not what they are cracked up to be and I’m not a fan of Costco either. No one ever needs 5lbs of carrots.

    • mmCandy Evans says

      But it seems that with increased online shopping regular retail is dead and only discount stores & warehouses are surviving. Met a guy here in Silicon Valley who tells me inthe future we will not even have to go anywhere to buy our daily supplies: we will simply re-order directly from the product.

      • mmJon Anderson says

        If your Silicon Valley guy is correct, manufacturers and consumers will be harmed. It’s one thing to have a commodity like milk reorder itself, but how are consumers to learn about and order new products? Part of walking through a store is to see what’s new and make impulse purchases. No one can think online Yellow Pages are better then the original.

        Also, this week the Department of Commerce released the findings of a survey of 41,000 online households where 45% had refrained from an online financial transaction, online buying, posting to social networks or expressing an opinion online at least once in the past year. 30% had refrained twice. 63% were most concerned about identity theft. Growing mistrust isn’t a good thing for transitioning to online transactions in the long-term.

        • mmCandy Evans says

          Anyone in Silicon Valley is admittedly super biased towards all things digital. I still enjoy some of the shopping process, and can not buy shoes or many clothes on line: must try on. The online world simply must do more to protect the online buyer. I no longer access credit card sites or banks when traveling unless I trust the IP address and it is private, not a hotel or airport lounge. But I now buy laundry detergent (and more) from Amazon and visit the grocery store so infrequently the spouse has had to do something he has not done in 36 years: buy milk!

  5. Butch Freeland says

    No wonder my water bill is so high. All this time I thought I was just paying for water.

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