Agreements related to a planned Costco Wholesale warehouse at the northwest corner of Interstate 35 and Lakeway Drive in Georgetown were approved by City Council at their meeting on Dec. 10. Costco is planning to open a 158,000 square-foot store at the location within five years.
The business is expected to create 235 new jobs and a have a net benefit to the City of more than $11 million over 10 years. The City’s return on investment is expected to exceed the cost of incentives within three years.
The Costco store in Georgetown is expected to increase the proportion of purchases by residents inside the city and reduce the city’s retail leakage to nearby cities. A 2016 study showed that Georgetown households spent only 32 percent of their total annual spending at local businesses. In addition, the Costco location is anticipated to attract shoppers from northern communities outside of the Austin metro region since there is currently no other Costco store between Georgetown and the Dallas metro area. Additionally, it will be the only Costco located on Interstate 35 in the region.
“This Costco store in Georgetown will provide a significant sales and property tax benefit to the City, which will help to fund City services such as public safety, the library, and parks and recreation,” Mayor Dale Ross said. “In addition, this store will increase our options and allow us to make more of our purchases here in Georgetown. Costco’s reputation as a quality employer means they will be providing good jobs for their employees, many of whom will be hired locally. This is a big economic development win for our community, and we look forward to welcoming Costco to Georgetown.”
At the meeting last night, the council approved the reimbursement of up to $2 million for two public roads for the Costco project. Funding by the Georgetown Transportation Enhancement Corporation for the roads is from a dedicated 0.5 percent sales tax in Georgetown for transportation projects for economic development. The Costco site will include a minimum of $20 million in capital costs for the project including the facility and public improvements.
A second item that was approved is a sales tax reimbursement agreement. Once the project is complete, the City will reimburse 50 percent of the sales taxes paid to Costco Wholesale annually. The reimbursements from the City’s general fund are limited to a maximum of $2 million total or 10 annual payments, whichever occurs first.
A third and fourth Costco-related item will fund natural gas infrastructure needed for the new store. A new gas line to serve the store is estimated to cost $1.2 million. A $400,000 portion of the cost of the gas line would be funded by the Georgetown Economic Development Corporation, which receives funding from a 0.125 percent sales tax revenue dedicated for economic development. The remainder of the line extension cost would be funded by Atmos Energy.
A fifth item related to Costco that was approved is the second and final reading of the proposed planned unit development zoning for the future store.