The rumor mill has been hinting at Costco coming into Bonney Lake for years, but now is it looking like a certainty.
At the City Council meeting on Sept. 6, Visconsi Companies – partial owners of the WSU Forest in Bonney Lake – presented a preliminary plan for Costco to open in what is to be the commercial area of the area, once the forest is cleared.
In order to do so, the council must approve an amendment to the 2009 WSU Development Agreement and enter in a new development agreement between Visconsi and Costco.
The plan presented during the meeting is pretty much what the city expects to see once a final proposal is made, City Administrator Don Morrison wrote in an email interview.
“There is an agreement in principle between the administration, the developer, and Costco,” he wrote. “We just need to work out a few remaining details.”
Peter Kahn, the assistant vice president of real estate development at Costco, said at the meeting they’re planning to build a state-of-the-art Costco building, roughly 150,000 square feet in size (slightly larger than the one built in Puyallup) and complete with 30 pump fueling stations.
The building would be located off state Route 410, east of 204th Avenue East and north of Eli Hill South Prairie Road East.
Morrison said that other developers have attempted to lobby the council to lure Costco to their sites, but it wasn’t feasible for the company.
“Costco has told us that the only location that they would currently consider in Bonney Lake is the one that have chosen. The other potential sites in Eastown have too many unknowns and infrastructure needs,” Morrison wrote. “One or two council members may prefer to have them locate in Eastown, but that is not a viable option. Costco is very picky.”
According to Visconsi, the estimated $30 million project should bring in roughly $250,000 in construction sales tax to the city, as well as more than $142,000 in building permit fees, more than $10,000 in sewer fees, $146,000 in water fees, $113,000 in stormwater fees and over a million in traffic impact fees, bringing in an rounded total of $2.2 million in various fees to the city — and this is all before sales tax revenue and property tax revenue.
Visconsi estimated Costco will help bring in anywhere between $300,000 to $500,000 in annual sales tax revenue, plus an additional $400,000 to $500,000 in property tax revenue for the city — certainly more than just a drop in the budget bucket, since the low end of the estimated sales tax revenue is seven percent of the city’s 2015 revenue stream, and the estimated property tax 14 percent of the city’s 2015 levels.
“The numbers are significant, otherwise the city wouldn’t be considering funding the SR 410 improvements,” Morrison wrote. “The property tax received will covered the basic police and other services provided to the development. We are doing an additional cost/benefit analysis which we’ll present to council at or prior to the public hearing.”
Revised development agreements
Before Costco can even start thinking about moving into Bonney Lake, the City Council needs to consider amending its current development agreement with Visconsi and create a whole new development agreement between the developer and Costco.
“Visconsi builds and pays for the new 204th road, but gets some traffic impact fee (TIF) credit for building it. Visconsi is also responsible for paying for the design of the SR 410 improvements up to and including a WSDOT approved bid package,” Morrison wrote. “The city is then responsible for paying for the construction of the SR 410 improvements, which would include a ‘smart system’ that would synchronize all of the traffic lights between 192nd and 214th to improve traffic flow throughout the corridor. We would be willing to do that because of the tax and other economic benefits Costco would bring to town.”
According to Morrison, a public hearing needs to be scheduled on these development agreements, which — timing permitted — could be as early as October.
“After the hearing the Council will discuss it at their next Workshop, and then if so inclined pass an agreement at the next meeting thereafter,” Morrison wrote. “That is the soonest it could occur.
New Public Works Building
The Bonney Lake City Council has taken the first steps toward building a new Public Works building by authorizing the sale of $16 million in water and sewer revenue bonds during its last meeting.
Ordinance D16-100 was approved by council members on Sept. 6. double check
Currently, the Public Works building is planned to be built on a city-owned parcel at 225th Avenue Court East in Eastown, Morrison wrote in an email interview.
The main building plans to include an 11,580 square-foot administration section, 24,724 square feet of heated shops, and 9,000 square feet of heated garage space.
This will replace the defunct Public Works building on Bonney Lake Boulevard.
“The current city shops, located behind the old city hall, are largely a collection of old metal buildings and sheds. They are among the worst commercial structures in all of Bonney Lake,” Morrison said. “They were constructed when the City had fewer than 30 employees and 3,000 residents. Now we have 132 employees and 20,000 residents city-wide.”
The city’s Public Services Department is going to use the building, said Morrison. This new department consists of the Public Works Department and the Community Development Department – both departments were combined when former Public Works Director Dan Grigsby retired June 30 of this year.
The bonds will also help pay for the development of a storage yard on 96th Street, a few blocks east of the Home Depot in town, because it is nearly impossible to get all of the city’s equipment into the current yard, Morrison said.
Morrison noted it is possible main Public Works Building will be built at the 96th street site, which was the city’s original plan.
The entire Public Works building project is estimated to cost upwards of $23.9 million.
For what the bonds won’t cover, the city has set aside $4 million in its capital budget, which will be rolling over into the city’s 2017-2018 budget. Existing revenue and reserves generated over the next two to three years will also cover some of the cost.
Morrison said the city is planning to have the final designs and estimated completed at the end of 2017, construction to begin in 2018 and the building complete in 2019.