OKC officials eye $3 million incentive for Costco store

The Oklahoma City Economic Development Trust is scheduled to consider a $3 million incentive for the development of a Costco Wholesale store in northwest Oklahoma City.

“We’re excited to finally bring Costco to Oklahoma City,” Oklahoma City Economic Development Project Manager Brent Bryant said. “We’ve been working with them between three and five years off and on. With the amount of sales Costco will have, we believe it will positively impact city coffers.”

The proposed location is near the intersection of N Western and the Kilpatrick Turnpike.

Recommended financial support is the first item listed for individual consideration on the trust’s agenda at its meeting Tuesday. The incentive is performancebased and to be provided over the course of a fourto five-year period.

Costco plans to invest about $15 million or more for the construction of approximately 150,000 square feet of commercial space, according to a memo attached to the meeting agenda. The business expects to employ 150 part-time and full-time employees and expects to open by April 2019.

Costco is known for its warehouse-style bulk shopping experience. It originated in San Diego in 1976 and currently has 500 stores in the United States. The closest current stores to Oklahoma City are in Tulsa and Lenexa, Kansas.

Oklahoma City staff project Costco will generate about $600,000 to $1.1 million annually in new City General Fund sales tax in its first six years of operation. The city’s general fund budget for FY 2018 is $404 million.

It is also expected to generate $270,000 to $500,000 in new Better Streets, Safer City sales tax, $200,000 to $375,000 in new Public Safety sales tax and $35,000 to $60,000 in Zoo sales tax.

The amount of $3 million was determined after negotiations between Costco and Oklahoma City officials.

“Costco looked at their extraordinary costs to develop at that site,” Bryant said. “They presented that number to us and after negotiations that’s the number reached.”

The money won’t be paid up front, and if the business doesn’t perform, it won’t be paid, Bryant said. The funds are effectively a reimbursement of a percentage of the new taxes generated by Costco.

The agenda item, if approved by the trust, will be passed to the Oklahoma City Council, Oklahoma City Manager James Couch said.