Longmont approves incentive, public-private partnership to lure Costco

LONGMONT — The Longmont City Council passed a series of measures Tuesday that establish a framework for economic development incentives and a public-private partnership that local leaders hope will lead to Costco Wholesale Corp. (Nasdaq: COST) building a warehouse club store in the city. 

The incentive package would provide property improvements, development costs, raw water acquisitions and community investment fee rebates worth more than $12.5 million. 

In exchange, Costco would build a 150,000-square-foot retail operation on a nearly 50-acre site near Longmont’s Harvest Junction development, city documents show.

As part of the proposed deal, city documents show that “Costco has committed $6.16 million to pay for private site development costs associated with the development of the Costco project itself. If there are private site development costs that exceed Costco’s $6.16 million budget, the city will cover up to $3 million of those costs” and Costco would shoulder the remaining overage.

Should the project move forward, the new store is expected to be open by 2023 or 2024. The land acquisition and site development approval process will likely take until summer 2021. 

“Costco is very selective about the locations of its facilities. Costco has a facility to the north located in Timnath (32 miles from downtown Longmont), one to the southeast located in Thornton (19 miles); and one to the southwest located in Superior (18 miles),” according to a city memo. “Each of these are located along a major highway, either I-25 or Highway 36. Costco is looking to reach a market that is effectively located a reasonable distance away from these other facilities while still located in or near a highly populated area.”

The site of the proposed Costco store is owned by the Golden family, which previously planned to build a gravel mining operation there. The family has deep roots in Longmont with business holdings that include Golden Concrete Co.

As part of a three-way deal between Longmont, the Goldens and Costco, the city will acquire nine acres of Golden-owned land for an affordable housing development. Nearly $3 million of the city’s overall roughly $12.5 million share of project costs is earmarked for affordable housing construction. 

Longmont estimates the new Costco will generate more than $4 million in new tax revenue during the store’s first year in operation. 

Some residents expressed concerns during Tuesday’s public hearing about lack of outreach to nearby property owners who could be negatively affected by increased traffic and construction noise and dust. 

Resident Holly Cook said she recently bought a three-acre parcel near the proposed site. “The appeal of that is it’s a quiet, country location,” she said, and that appeal could be lessened by the project.

Longmont Councilman Aren Rodriguez said the Costco project, along with any additional projects on adjacent parcels, “will go through the city process and have the time for community meetings between the developer, the community and our city staff.”

Councilwoman Marcia Martin echoed his sentiment, adding, “The same process that any other building project gets … will be applied in this case. We’re not absolving Costco of having to meet our building codes, our land use code or their obligation to conduct public hearings. All that is still in the future.”

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