Costco is scheduled to open in Cedar Park by the end of 2014 because of a $6 million development agreement approved Sept. 6 by City Council.
The warehouse membership club chain, Cedar Park Town Center LP and city officials collectively agreed to split sales tax and property tax collections up to the next 15 years—or $6 million, whichever occurs first—in exchange for Costco building a new store at the northwest corner of Toll 183A and FM 1431.
“This is the best retail tract in the city, and to me it’s only fitting we bring one of our great retail establishments to that site,” Cedar Park Mayor Matt Powell said before the council unanimously approved the development agreement.
The new 153,700-square-foot store will occupy 16 acres in the Cedar Park Town Center and accumulate approximately $18 million in value, according to the development agreement approved informally late last week, said Phil Brewer, Cedar Park Economic Development director.
Costco will also anchor and help develop the remaining 33 acres left in the town center. On top of that, an additional 200,000 square feet—or $20 million worth—of retail, restaurant and office space is planned in the area, bringing the total project to more than 350,000 square feet and $38 million in commercial value.
In exchange, the developer must invest $1.33 million in infrastructure improvements, which includes building a new bridge over the Cedar Park Town Center pond, making greenbelt improvements, creating basic utilities and access to all new developments, and adding deceleration lanes along Toll 183A and FM 1431, Brewer said.
And in return, Costco and Cedar Park Town Center LP will receive 25 percent of all sales tax made from the project—excluding the 1 cent sales tax that goes toward the 4A and 4B economic development corporations—and 20 percent of all property taxes collected on the site for the next 15 years, or until $6 million is redeemed.
The performance-based contract stipulates that Costco must make a minimum capital investment, develop a certain number of square feet and open the big-box warehouse by December 2014.
A Costco representative at the Sept. 6 meeting could not speak on the project. In December, when the city passed a zoning ordinance in support of the retailer coming to Cedar Park, Dave Messner, Costco vice president of real estate, said the big-box store will employ 350–400 part- and full-time employees.
Costco was always the preferred anchor for this site, said Michael Ainbinder, Ainbender Company CEO and Cedar Park Town Center LP principal, and the incentives ensured the Issaquah, Wash.-based retailer came to Cedar Park.
“Costco is one of the biggest generators of any retailer,” Ainbender said, explaining how the city will earn $18 million in sales and property taxes by the time Costco earns its $6 million agreed-upon return.
Ainbender did not reveal what potential new restaurants and retail shops could surround Costco, although his group is in talks with several sit-down restaurants and one fast-food store—none of which have previous Cedar Park locations—and one that has no previous reach in Texas.
There is no set completion date for the side retail projects, Ainbender said, but he intends on the first phase being complete by fall 2013 and full buildout by 2015.