costco

Ukiah Will Finally Get Its Costco

I’ve been promising my children we’d do our Christmas shopping at Costco in Ukiah since about 2013, so when I tell them Costco plans to open in April, I can hardly blame them if they don’t rush to put it on their calendars. However, this time, it’s the real deal. Escrow is scheduled to close in September, and Costco plans to break ground shortly thereafter.

When a company like Costco decides to build a store in a new location, it’s generally the result of long hours of negotiation to determine who will pay for what. Costco needs infrastructure to support its new store, and local government needs to be sure the tax revenues and other benefits outweigh the costs.

Now that negotiations are done, we can expect construction to begin. While Costco works on building its store and gas station, local contractors will begin several infrastructure projects: reconstructing Airport Boulevard, adding a second left-hand turn lane from westbound Talmage Road onto Airport Boulevard, as well as creating a two-lane off-ramp from southbound Highway 101 at Talmage Road with censors connected to the traffic light at the Talmage and Airport intersection. They will also add a left-hand turn lane from Hastings Avenue on to State Street   and a traffic light at Hastings Avenue and Commerce Drive.

I don’t have a lot of details, but I am told Ghilotti Construction has been awarded a $4.6 million contract for much of the construction (not including the off ramp).

The half-cent sales tax recently approved by Ukiah voters via Measure Y will fund the rebuilding of Airport Boulevard. Additional funding will come from a gas tax and a capital improvement fund. Contributors to the capital improvement fund include businesses currently located in the Redwood Business Park (that’s the official name for the Airport Boulevard shopping area).

I know we still have people against Costco coming to town, but it’s here so let’s embrace the benefits, of which there are many. When Costco opens, it will provide a place with more goods at lower prices, and its presence will likely lead to lower prices on goods throughout our community (thanks to the laws of supply and demand). Gas prices should also drop. Lower prices make everyone’s paycheck go further. Most of the jobs at Costco will pay enough to allow their employees to afford Ukiah-area rents, and I expect many employees will be able to afford to buy homes.

People will not go to Santa Rosa to shop as often, saving gas and keeping more sales tax revenue here. Having a Costco in town will also reduce online shopping. Many locals say they would shop in Ukiah if they could find what they’re looking for. While Costco may not be a local mom-and-pop business, shopping there will certainly support the local employees who work there, and it will increase sales tax revenues to pay for things like public safety and other services many of us appreciate.

Ukiah’s 8.375 percent sales tax gets distributed to city, county and state governments. The city gets approximately 2 percent. The state gets approximately 5 percent, and the county gets the rest (including 0.125 percent for the library). Costco will also pay property taxes to the tune of about 1 percent of the finished value of the land and improvements.

Thanks to City Manager Sage Sangiacomo and City Councilmember Doug Crane for providing timely information about costs and revenue on this project. The city’s fiscal analysis for Costco conservatively estimates net annual sales tax revenue to the City of Ukiah will be about $800,000. The estimated assessed valuation for the Costco development is about $27,000,0000, so property tax revenue should be approximately $270,000 of which the city will get about $25,000. Most of the other $245,000 gets distributed to other local agencies. Overall, this is a good deal for Ukiah.

If you have questions about real estate or property management, contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you’re a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

 

 

 

 

 

What’s up with Costco Coming to Town?

Many people around town are curious about when Costco might finally receive approval to build so it can open a store in Ukiah. Regardless of whether you’re a supporter or detractor, it looks like Costco has overcome a few of the major hurdles delaying its arrival.

In the spirit of full disclosure, Realty World Selzer Realty is the co-listing agent for the property Costco will build on. That doesn’t change what I’m about to write, but it’s always important to be transparent.

Currently, the City of Ukiah is in litigation over the environmental impact report for the Costco development. The City was successful during its original trial, but the plaintiffs appealed. The plaintiffs used to be a couple individuals who were union members and worked at FoodMaxx. They have since withdrawn from the suit, but the lawyer persists, representing a client he refuses to identify.

Anyway, the environmental impact report appeal should be heard in February. Presumably, the City will prevail again, ending litigation regarding the development. While that creates a fairly clear path for Costco to come to town, it is not the last hurdle. The City must first complete infrastructure improvements to mitigate traffic issues, primarily at the intersection of Airport Boulevard and Talmage Road. The environmental impact report for the intersection has been certified, so it is beyond the reach of litigation to slow or stop development. Most of the design and engineering is complete, but a small amount remains to be negotiated with the State of California—that is, with CalTrans.

The on and off ramps need significant upgrades to handle the inevitable increase in traffic generated by Costco (and the complete build out of the Airport Business Park). It is conceivable that, given current litigation and infrastructure improvement timelines that those in favor of shopping at Costco will have an opportunity to do so for the 2016 holiday season. If you’re not planning to shop at Costco EVER, you will still have the opportunity to shop with local merchants in downtown Ukiah.

People in favor of Costco say it’ll bring new jobs that pay higher-than-average wages for our area. It will lower the cost of consumer goods and make a greater variety of goods available locally. It will help us keep retail dollars in Ukiah and the associated sales tax, too. It’ll make Ukiah a regional shopping hub, bringing shoppers from other local communities. Those visitors will purchase goods and services from others in Ukiah like restaurants or something from a local specialty store, bolstering our local economy. The additional tax revenue will strengthen government services like police and fire protection as well as road maintenance. The increased commercial activity at the Airport Boulevard Business Park will attract other commercial endeavors to the area and we’ll see a flourishing microcosm of commercial activity. People who currently drive to Santa Rosa will save the gas, thus reducing our carbon footprint.

People against Costco say it’s just another big box store that will drive out local businesses, cause traffic congestion, move retail profits out of town, create an ocean of asphalt that contributes to global warming, and add street lights that cause light pollution which will block our view of stars in the night sky. It will strain local resources (e.g., water, sewer, road maintenance) and hurt the communities from which shoppers travel to come to Costco. You can’t buy one 12-ounce can of baked beans; you have to buy a gallon, so the money you supposedly save by buying in bulk actually encourages overbuying and waste.

The real story is probably somewhere in the middle. Either way, it looks like Costco is well on its way.

If you have questions about real estate development or any other real estate or property management issues, please contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you’re a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

 

COSTCO: Blessing or a Curse?

COSTCO is coming! Before I get going, I want to disclose that Realty World Selzer Realty is the listing agent for the property COSTCO will build on. That doesn’t change what I’m about to write, but it’s always important to be up front.

Will COSTCO mean boom or bust for Ukiah? When you ask someone on the street, they say:

It’s great! It’ll bring new jobs that pay higher-than-average wages for our area. It will lower the cost of consumer goods and make a greater variety of goods available locally. It will help us keep retail dollars in Ukiah and the associated sales tax, too. It’ll make Ukiah a regional shopping hub, bringing shoppers from other local communities. Those visitors will purchase goods and services from others in Ukiah like restaurants or something from a local specialty store, bolstering our local economy. The additional tax revenue will strengthen government services like police and fire protection as well as road maintenance. The increased commercial activity at the Airport Boulevard Business Park will attract other commercial endeavors to the area and we’ll see a flourishing microcosm of commercial activity. People who currently drive to Santa Rosa will save the gas, thus reducing our carbon footprint. These benefits easily outweigh any negatives that COSTCO might bring.

The next person you ask about COSTCO will tell you it’s terrible! COSTCO’s just another big box store that will drive out local businesses, cause traffic congestion specifically at Talmage and Airport Boulevard as well as other intersections, move retail profits from local businesses to COSTCO’s corporate structure, create an ocean of asphalt that contributes to global warming, and add street lights that cause light pollution which will block our view of stars in the night sky. It will be a strain on local resources (e.g., water, sewer, road maintenance) and hurt the communities from which shoppers travel to come to COSTCO. You can’t buy one 12-ounce can of baked beans; you have to buy a gallon, so the money you supposedly save by buying in bulk actually encourages overbuying and waste. These negatives far outweigh any benefits COSTCO could bring.

And the killer is, they’re both right. Whether or not COSTCO is a net gain or loss depends in large part on your personal perspective.

However, objectively (I think), I believe that the average pay for COSTCO employees is higher than the average retail pay in Ukiah, which will bode well for the average working family as they climb the housing ladder, either in a home they wish to own or rent. Also, the commercial area around Airport Boulevard will likely see more activity, which will probably increase real estate prices in that area and bolster future development.

COSTCO is likely to promote an increase in development, which may or may not benefit you personally, but it is likely to lower the cost of shopping in Ukiah.

At the end of each column I always ask if you have a question you would like to see addressed in this article. Well, if you make a suggestion I use, you earn a $5.00 gift card at Schat’s Bakery & Cafe. So let’s hear them.

Next time I’ll write about roofing. If there’s something you would like me to write about or if you have questions about real estate or property management, feel free to contact me at rselzer@selzerrealty.com or visit our website at www.realtyworldselzer.com. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 35 years.

 

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