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On Nov. 14, Pflugerville City Council approved an economic development agreement allowing plans for the Pflugerville Costco store to move forward.
“It’s no longer speculative—they’re coming,” Pflugerville City Manager Brandon Wade said.
The agreement states the Pflugerville Community Development Corporation, the Travis County Emergency Services District No. 2/Pflugerville Fire Department and the city will provide a maximum of $6.25 million to fund infrastructure costs for the Costco store. The agreement will last 15 years or until the maximum amount is reached, whichever happens first.
“It was a creative approach, and it required a lot of coordination to get everybody on board,” Assistant City Manager Trey Fletcher said.
The PCDC and ESD will each provide $1.5 million and the city will provide $3.25 million, all of which will come from sales tax proceeds. Each group will contribute half of the sales tax proceeds they receive from sales at the store to Costco infrastructure costs and will retain the remaining half.
“If anything, [Costco’s] presence actually has the potential of driving the tax rate down,” Wade said. “This is a remarkably good deal and we are very fortunate to get it, and the citizens of this town are going to be the primary beneficiary of it from all sorts of aspects.”
In return, the agreement requires Costco to construct the 150,000-square-foot facility, make a capital investment of $15 million, comply with the city’s unified development code and obtain a certificate of occupancy. Costco will also be required to construct a detention pond. If these requirements are not met, the incentive payments will cease.
Costco officials hope to start construction as soon as possible, likely in January 2018, and open the store at the end of July 2018, Fletcher confirmed. The economic development agreement is a big step in that direction.
“I don’t see any significant impediment to them moving forward at this point,” Wade said.
The Pflugerville location of the wholesale shopping chain will be located on 16.13 acres of land on the southeast corner of Kelly Lane and the SH 130 frontage road. A preliminary site plan includes a 150,170-square-foot warehouse, 3,912-square-foot liquor store, 630-square-foot optical exam area and 750 parking spaces. It will be the fourth Costco location in the Austin metro area.
As far as traffic concerns go, Wade acknowledged there will likely be an increase in traffic in the area but said traffic will continue to be an issue as Pflugerville grows.
“It’s not Costco itself; it’s just the growing pains that Pflugerville is going to be going through for the next 30 years,” Wade explained.
Wade also pointed out that other cities have not experienced additional traffic problems after opening Costco locations, largely because the average peak hour for Costco shoppers is at 10 a.m. on Mondays, thus not competing with rush hour.
“Where Costco may indirectly cause more traffic is by drawing more retail around it,” Wade said.
Fletcher said the store will hopefully result in some additional development in the vicinity.