In a special joint meeting between the Tomball City Council and the Tomball Economic Development Corp. on Nov. 7, the City Council unanimously approved, on first reading, $6 million in economic incentives for Costco, which is set to build a location near the intersection of Business 249 and Holderreith Road.
The Chapter 380 economic development agreement stipulates Costco build a facility of at least 150,000 square feet, make a capital investment of at least $10 million and create 125 jobs, among other things.
The agreement is named after Chapter 380 of the Texas Local Government Code, which allows cities to give out grants of public funds to promote local economic development and stimulate business and commercial activity.
The approved economic incentives will help offset infrastructure costs associated with the construction of the site, which Costco projects will be over $20 million, according to the Nov. 7 agenda packet.
According to permits filed in late September, Costco will build a 161,131-square-foot store alongside a 10,000-square-foot fuel station.
Once Costco is built and opened, the city and the TEDC will reimburse the retailer the $6 million in payments over 20 years or until it is fully reimbursed—whichever comes first, according to the agreement.
The payments would be made up of 50% of the city’s sales tax revenue and 100% of the TEDC’s sale tax revenue received from Costco, according to the agreement.
City officials expect the $6 million in incentives to be fully paid to Costco in six years based on sales projections provided by the retailer, according to the agenda packet.