Costco impact on Pflugerville expected to be huge

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Pflugerville City Manager Brandon Wade’s smile was followed by news many area residents anticipated: “Costco really is coming here,” Wade said April 19.

The membership-only warehouse club will provide the city with destination retail when it opens in 2018. The timeline, Wade said, could include construction starting by the end of the year with a mid-2018 opening.

Situated on about 16 acres near thesoutheast corner of SH 130 and SH 45 N, the Costco property will include a fuel station and a liquor store along with several other businesses.

“We’ve been visiting with them for a couple of years now, and we are very excited about this opportunity,” Wade said. “It’s extraordinarily positive for Pflugerville. To have a major tenant on that side of town and the hospital going in will be a major development for us.”

The Costco effect on sales tax revenue for the city, he said, is similar to that of the entire Stone Hill Town Center development, which includes a Target, Ross, Dick’s Sporting Goods, Best Buy, The Home Depot, Cinemark, and more than a dozen other stores and restaurants.

“It’s a good amount of sales tax,” Wade said.

Wade said Costco spent much time in due diligence with the property, taking a similar approach before building the Cedar Park store.

“They are very thorough, and that makes this very satisfying,” Wade said. “They wanted to make sure it worked.”

Costco to open Pflugerville store at SH 130 and SH 45 N

What is Costco?

Costco sells food, appliances, electronics, mattresses, tires, floral products, patio furniture, lawn and garden items, office products, clothing, luggage, health and beauty items, sports gear, and household and pet products. There are business, optical and pharmacy departments, among others. There is a yearly fee for membership, and the store is for members only.

The company’s first location opened in 1976 in San Diego. During fiscal year 2015-16, total annual sales for Costco was $116 billion worldwide. The Pflugerville location will be the company’s fourth in the Austin area.

Prime location

A preliminary site plan for the Pflugerville site includes 16.13 acres for the store site area and 4.08 acres for an outlot on the south side of the store. Building square footage calls for a warehouse of 150,170 square feet, an optical exam area of 630 square feet and a 3,912-square-foot liquor store.

The site plan calls for 750 parking spaces and a fueling station on the east side of the property near Colorado Sand Drive.

On April 20, a day after the Costco announcement, Wade said feedback from the community was mostly positive, with some concerns about traffic expressed to him.

The Costco effect

Amy Madison, Pflugerville Community Development Corp. executive director, said the announcement will likely bring more business to the city. She said although her group is working with the city on the project, Costco, as with other retail developments, is not eligible for incentive packages offered to several businesses that have come to Pflugerville. However, the location, according to Madison, will be good for Costco and good for the city.

“You always want to see destination retail,” Madison said. “It enhances all the other retail in the area, and this is real exciting. Our residents have really wanted a Costco, and the city focused its energies on making sure one came here.”

Madison said the economic impact of Costco will allow the city to develop and attract other businesses in the community.

“The fact they chose this location speaks to the growth of Pflugerville and the significance of having SH 130 and [Toll] 45 here,” Madison said. “We have the volume, density, household income and all the factors it takes to support destination retail. There’s a lot going on in Pflugerville, and we’re really glad Costco is a part of that.”

Costco to open Pflugerville store at SH 130 and SH 45 N

Economic boost

Officials in Cedar Park understand what a Costco does in a community. Located at Toll 183A and FM 1431 north of SH 45 N, Costco has boosted sales tax revenue in Cedar Park since it opened in November 2013. Other businesses followed Costco to the area, a common occurrence, according to Wade.

Wade expects vacant property around Costco, approximately 60 acres, will soon have development inquiries.

In a meeting April 19, Pflugerville Assistant City Manager Trey Fletcher summed up the economic impact of Costco on a city in one word:
“staggering.”

Phil Brewer, Cedar Park economic development director, said the tax numbers were hard to quantify, but Costco became part of a major development of businesses and restaurants.

“Financially, I can tell you it provides a very healthy tax revenue monthly,” Brewer said of the impact on his city. “It’s a destination-type project, serving your citizens and those in the surrounding communities.”

Many memberships are from as far away as Killeen and Temple, Brewer said.

“They come here to go to Costco, eat, shop at other stores,” he said.

Wade said Pflugerville was in discussion with Costco representatives for the past two years, and Brewer said the Cedar Park store was in the works for nearly six years.

“They were concerned about [taking revenue]from the store at 183 and Braker [in Austin],” Brewer said. That’s always a concern. But it did not. The Austin store was one of the highest-grossing stores, and now our store is, too. We had the best opening weekend of any [Costco] store in the
country.”

Brewer said the development brought more traffic to the area, a concern of some Pflugerville residents in the nearby Falcon Pointe neighborhood who have shared their displeasure regarding the new Costco through social media. Hendrickson High School, Murchison Elementary School and Kelly Lane Middle School are all within a mile of the new Costco.

Just south of Costco, at East Pflugerville Parkway and the SH 130 frontage road, the Baylor Scott & White Medical Center-Pflugerville facility will take shape soon. The hospital is scheduled to open about the same time as Costco next year.

Brewer said the customer traffic is steady, not all at one time.

“There is a lot of volume, and it can be a little crazy,” Brewer said. “Crazy in a good way.”

Wade and Madison both said they believe Costco will coexist with businesses—present and future—offering a different shopping experience than is available now.

“As destination shopping, it brings people to our area who will visit our businesses beyond Costco,” Madison said. “This is a win-win.”

Brewer described the short time Costco has been open in Cedar Park in much the same way as Madison.

“We have not had negative feedback,” Brewer said. “They come in, and they are good neighbors. They are involved in the community, and it has been all positive for us.”

Costco to open Pflugerville store at SH 130 and SH 45 N

The side view rendering shows the tire store bays. (via Courtesy city of Pflugerville)

What’s next

Costco’s next step, Fletcher said, will be to formally submit site plans and go through the permitting process as the city does “minor extensions and improvements to infrastructure.”

The property is zoned for the project, and the city, the PCDC and the Pflugerville Fire Department are working out details for infrastructure improvements to accommodate the project.

Representatives from Costco did not return calls seeking comment.

Costco to open Pflugerville store at SH 130 and SH 45 N

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COMMENT
  1. That is an absolutely awful location. It already takes multiple cycles of the lights to get out of the Kelly Lane subdivisions in the morning, why on earth would you allow a Costco there as well?

    You get what you vote for, I guess.

  2. This new store, if it actually does materialize, is going to do some serious damage to Sam’s in Round Rock. Oh well. That’s the nature of American competition. The new gas station should also do well, because sometime I can’t even find an empty fuel pump in the morning at the next door Shell station. It would be nice if the sales tax helped reduce local homeowner’s taxes, I do however wish they would address the local traffic situation BEFORE the city hands out another major building permit. A pedestrian bridge by the fire station across Kelly Lane might help speed up traffic before and after school.

  3. Better think about traffic flow through that intersection. It is already terrible!

  4. I’ve lived in my Blackhawk home for 21 years this year and have been part of PISD since 1989. When construction began for the Costco we officially decided to leave the city of pflugerville. Kudos to the leaders of this town. Sarcasm intended.

Joe Warner
Joe Warner is managing editor of the nine Austin-Central Texas editions of Community Impact Newspaper. He previously served as senior editor of the flagship Round Rock, Pflugerville and Hutto newspaper. He came to Central Texas from Metro Detroit, where he was editor and general manager of several daily and weekly publications. He is the former president of the Michigan Press Association and was on the MPA board of directors for nine years.
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