Costco coming to Cape Coral
Council to consider $10 million in incentives
A prominent national retailer that specializes in bulk buying is preparing for its first location in Cape Coral.
Costco Wholesale is poised to become another major retailer among the Cape’s growing commercial landscape.
The future Costco is planned for 600 Chiquita Blvd. S. Plans include an approximately 165,000-square-foot warehouse and a fueling facility for added member convenience.
The Cape Coral City Council will consider an incentive package for the future Costco location at its Nov. 2 meeting. The package would provide up to $10 million in assistance for site development and impact fees.
City Manager Michael Ilczyszyn said Costco has been the No. 1 request from residents over the last five-plus years when it comes to an economic development opportunity in the Cape.
“We’re grateful Costco has chosen Cape Coral, and I want to thank our Economic Development staff for their work to bring this project to fruition,” Ilczyszyn said. “A Costco has been one of our residents’ most requested additions, and we’re pleased to help make it a reality. Beyond providing a shopping destination closer to home, this investment will bring much-needed jobs to our community and give residents an alternative to traveling to Fort Myers to shop at Costco.”
According to city officials, the incentive has three parts: a partial property-tax refund, impact-fee reimbursements, and delayed payment of utility impact fees.
When it comes to property taxes, city officials said Costco gets a portion back and the city retains the rest.
City officials stated that once the property is developed, Costco will pay property taxes. Under the agreement, the city will return a portion of the eligible city property-tax revenue generated by the development to help offset additional site-preparation costs. The incentive is capped at $8 million over a maximum of 25 years. Payments end when either limit is reached, whichever comes first.
Regarding impact fees and road improvements, city officials said Costco will receive reimbursements for transportation improvements. The agreement allows the city to reimburse Costco for up to $1.8 million in impact fees associated with the project. Costco will build transportation improvements, including turn lanes and a traffic signal, as part of the development. The public benefit is the completed road improvements, while the city avoids separately designing, hiring contractors for and managing that work.
“That’s part of the reason why we have the incentive package with Costco,” Ilczyszyn said. “As we worked through the site they were going to select, we also worked with them to improve Chiquita Boulevard, adding turn lanes and a traffic signal to make sure that our transportation network continues to flow as it does now with the attention that that site will get from Costco.”
When it comes to utility impact fees, city officials said Costco can pay certain fees later, and that the agreement allows Costco to delay payment of up to $200,000 in utility impact fees. It is a payment extension — not a waiver. The fees must still be paid, officials said.
To start, the Costco will create 150 to 175 new jobs, Ilczyszyn said.
As for why the incentive, Ilczyszyn said the site, which he said makes the most sense because it is centrally located and large enough to fit the retailer, is on land that was used as a borrow pit and it is currently unsuitable for construction.
“We need to come in and help them make that soil to that position of sustainability,” he said.
Ilczyszyn said pending Monday’s meeting outcome, steps that need to be taken include permitting from the South Florida Water Management District, as well as the city for the site construction and building.
“We have requested meetings with the district,” he said. “My staff has been meeting with them on the building permit and site permit. We’ve been working with them as a team, and that’s really what economic development is, it’s the city of Cape Coral partnering with private sector development to bring much needed retail and dining and medical facilities to the city of Cape Coral.”
Ilczyszyn said funding for the incentive program is two-fold.
“The first one is an enhanced value recapture, which is essentially a synthetic (tax increment financing),” he said. “So instead of having a CRA where we’re using county taxes and city taxes basically refunding the developer, or in this case the corporation, the taxes they would pay once built. A synthetic TIF (tax increment financing) is where only the city is participating. We are going to be refunding Costco a portion of their taxes in order to basically be the financial parter to recover those costs that are over and above what they normally would have been able to just go buy a site and start construction.”
Ilczyszyn said the second part is the impact fees that will be taken care of. Instead of the city collecting those fees and doing improvements itself, the city is working with Costco at the time of development to have it develop transportation needs and build the signal as part of the roadway network in the area, he said.
“It helps us not have the administrative burden of collecting and administering the fees and hiring contractors designing the work. They’re going to do it all for us,” he said. “It’s a great partnership both from turning a site that would otherwise be a dead site in Cape Coral into one that could be productive for our citizens and improve transportation at the same time.”
The store’s opening date has not yet been announced and will depend on Costco’s construction timeline.
To reach CJ HADDAD, please email cjhaddad@breezenewspapers.com