Whether to give Costco $3 million to buy a site for a new store on Coit at Churchill led City Council into a robust discussion Wednesday of how to spend our economic development dollars.
Council members ultimately voted 10-5 in favor of giving Costco the funds to help pay for its first Dallas store. The money comes from a private-public partnership fund, which is funded through water bills. Washington-based Costco, whose operating budget in 2015 was $3.62 billion, indicated that it wouldn’t move onto the site without the grant.
Costco is paying $16 million for the site, which currently is owned by the Texas Department of Transportation.
Councilman Rickey Callahan said the $3 million “will actually pay for itself” because the retailer is taking a site that hasn’t been on the City of Dallas property tax rolls for 10 years. It will add to the city’s sales tax revenues; Costco has about 50,000 members in Dallas who currently drive to the suburbs to shop. And it will bring about 225 jobs; Costco’s minimum wage is $13 an hour, and employees who’ve worked there five years or more earn $50,000 a year on average.
Several council members argued that the $3 million should be spent in neighborhoods where economic incentives and grocers are needed.
City Councilman Scott Griggs, who represents Oak Cliff, voted against the grant, calling it “corporate welfare.”
Councilman Phillip Kingston of East Dallas argued that the deal didn’t meet the test for economic development funds that if a company doesn’t receive a grant, they won’t come to Dallas.
“Every real estate broker in town can confirm that Costco is committed to coming to Dallas,” Kingston said. “If we do not pass this resolution, we will still get a Costco in Dallas. If we pass a resolution banning Costco in Dallas, we will still get a Costco in Dallas.”
Councilwoman Tiffinni Young, who represents parts of South Dallas and Oak Cliff, noted that 50 percent of Costco’s sales are to small businesses.
“That’s all we have in southern Dallas,” she said. “We have small business owners, and we have cheaper real estate.”
City Councilman Mark Clayton, who represents parts of East Dallas and Lake Highlands, added a friendly amendment to the measure stating that within 90 days, city staff will develop plans to actively search for a major grocer for whom to offer a grant of no less than $3 million for a food desert in the southern sector of Dallas.