Costco Moves Forward with Plans for Second Tri-Cities Location Amid Lease Negotiations

Costco Wholesale is making significant progress towards establishing a second store in the Tri-Cities, even as ongoing negotiations for a long-term lease on a prime site in Richland’s Queensgate area continue. The proposed location, strategically situated behind the Target-anchored Vintner Square shopping complex, is currently owned by the state of Washington and managed by the Department of Natural Resources.

Negotiations and Site Selection

The negotiations for the lease have been underway for over a year, with both parties working diligently to reach a mutual agreement. Courtney James, the DNR spokeswoman, confirmed that the negotiations are currently in the final stages, with hopes of reaching a conclusion by September. In the meantime, Costco has taken proactive steps by submitting applications for grading and construction permits to the city of Richland.

Construction Plans and Building Details

The proposed store will encompass a substantial 182,644-square-foot structure, representing a nearly 20% increase in size compared to Costco's existing store in Tri-Cities. Lydig Construction has been selected to undertake the project, with John Shaw, the director of real estate development at Costco Wholesale, overseeing the operations. The estimated construction value for the new store stands at $24.6 million. If the plans proceed as anticipated, the new store will not only be larger in scale but will also feature a gas station with 16 pumps.

Future Prospects and Lease Negotiations

While Costco remains tight-lipped regarding the specifics of the second Tri-Cities location, it has reaffirmed its commitment to discussing stores that are set to open in the near future. The company's focus, as stated by a spokeswoman, is exclusively on stores slated to open in the coming months.
The ongoing lease negotiations with the Washington Department of Natural Resources are expected to yield a mutually beneficial agreement that could have far-reaching implications for both the state agency and Costco. Notably, during the initial offer, Costco proposed a 55-year deal worth $12.2 million to the state in the first 25 years, with subsequent terms subject to reevaluation and reappraisal after the initial period elapses. Additionally, Costco has expressed interest in the option to purchase the property if DNR is legally permitted to sell it in the future.

Traffic Impact and Development Costs

The development of the new Costco store in Richland is anticipated to have a significant impact on traffic patterns in the area. A study conducted in 2022 and subsequently released under the state Public Records Act estimated an additional 652 vehicle trips during peak hours as a direct result of the store's operations. In response to these projected impacts, Costco would be required to pay the city approximately $550,000 in traffic impact fees. This figure underscores the substantial financial commitment that Costco is prepared to make in order to ensure that the infrastructure can adequately support the increased traffic generated by the new store.

Catalyst for Growth

The addition of a Costco location in Richland's Queensgate area is poised to act as a catalyst for economic growth and development in the region. The proposed store's footprint and the associated investment of over $24 million in construction costs signal Costco's confidence in the potential of the Tri-Cities as a lucrative market. Moreover, the long-term lease agreement, if finalized, will not only provide a stable revenue stream for the state but also contribute to the creation of jobs and increased commercial activity in the surrounding area.

As the negotiations for the lease and the impending construction of the new Costco store progress, it is evident that the Tri-Cities are on the brink of a significant economic development milestone. The collaboration between Costco and the Washington Department of Natural Resources will pave the way for increased consumer choice, enhanced infrastructure, and a positive impact on the local economy.