Seattle Sun Newspaper - Vol. 8, Issue 6, June 2004

Copyright 2004 Seattle Sun. Please feel free to use the article below in your research. Be sure to cite the Seattle Sun as your source.

Why Costco scrapped plans for new store

By CLAYTON PARK

The chairman of Costco Wholesale Corp. recently said in an interview that his company decided to scrap its plans to build a new store in North Seattle because of economics, not because of opposition by neighbors of the proposed site.

Jeff Brotman, the co-founder of Issaquah-based Costco, said his company got cold feet about building a warehouse club store on the Lincoln Towing site near the intersection of North 125th Street and Aurora Avenue North after feasibility studies found that the steep slope would be more costly to build on than originally anticipated.

"(The projected cost of building the store) got more and more expensive as we did engineering and design work" on the site, Brotman said. "It required all kinds of work we hadn't anticipate."

Brotman added that the neighbors, despite the concerns expressed by some about increased parking and traffic congestion that would be generated by the proposed Costco store, "didn't have anything to do with it," referring to his company's decision. "It's a huge, sloping piece of property out there so we bagged it."

The Costco chairman said his company wanted to build a store in North Seattle, along Aurora Avenue between North 100th and North 130th streets, because its Shoreline store is one of the chain's top performing Puget Sound area locations.

Brotman isn't completely ruling out the possibility of someday adding a North Seattle location, but said for now "it's out unless we find another site that works."

That might be a difficult task, considering that Costco typically prefers 14-acre sites that are fairly flat and rectangular in shape in order to accommodate a store of about 148,000 square feet and with parking for 700 cars. Many of the stores Costco now builds also include a gas station. Costco stores on average employ 325 workers and generate about $105 million in sales each year.

For now, Costco will focus on building a new store in Woodinville, which is expected to open next February, and a new 156,000-square-foot store in the SoDo area, just south of Safeco Field, which will replace its original, much smaller store there. Costco is also planning new stores in Lacey, Marysville and Gig Harbor.

Costco also is experimenting with some new concepts, including Costco Home, a warehouse-style store that specializes in furniture and home furnishings, the first of which is located in Kirkland, and Costco stores that are located in shopping malls, as opposed to its usual free-standing locations.

When asked if Costco could someday have a mall store in the Puget Sound region, Brotman said "Northgate Mall is probably the only mall (here) that's in an area we haven't penetrated." He quickly added, however, that his company has not had any talks with Northgate Mall's owners, Indianapolis-based Simon Property Group, nor does it have any plans to do so at this time.