Being so close to Edmond I tend to believe their figures. They might be planning on stealing sales tax from Edmond chains. I'd agree with you if this was deeper in the city where there's less chance of stealing tax from other cities.

Also how much do they stimulate on their own? When I am in Costco I ALWAYS end up buying things I never planned on buying and would not have bought elsewhere. I'm sure I'm not alone in that regard.

Being so close to Edmond I tend to believe their figures. They might be planning on stealing sales tax from Edmond chains. I'd agree with you if this was deeper in the city where there's less chance of stealing tax from other cities.

Just meant they are going to present the best case scenario when they are trying to get a multi-million dollar award.

And there is no way for the city to be able to go through a similar exercise, they just merely repeated what Costco had told them.

Also how much do they stimulate on their own? When I am in Costco I ALWAYS end up buying things I never planned on buying and would not have bought elsewhere. I'm sure I'm not alone in that regard.

That's the concern I have with Costco; especially since I'm an impulse buyer. If that's a patron's cup of tea, then go for it

OKC Council approves incentive discussion with Costco

By: Brian Brus The Journal Record February 27, 2018

OKLAHOMA CITY – Oklahoma City officials will begin negotiating in earnest with Costco Wholesale Corp. representatives over $3 million in economic incentives for a new store in north Oklahoma City.

The City Council’s vote on the issue was not unanimous, however, with council members Ed Shadid and Todd Stone in opposition. Shadid raised several questions about whether millions of dollars in promised sales for tax revenue included Costco customer club fees.

Shadid also said that if Costco executives are interested enough in Oklahoma City to already choose a site at N. Western Avenue just south of the Kilpatrick Turnpike, then incentives are not necessary.

Costco, the second-largest retailer in the world, wants to build a 150,000-square-foot center at a cost of about $15 million. If the company proceeds, the center would open by the second quarter of 2019.

A company representative said 150-200 employees will be hired at the center with a typical full-time cashier earning $13.50 per hour to start. The potential economic impact could be significant: City Hall staff projections point to $80 million in annual sales, of which 40 percent will be new to the city’s tax base as Costco pulls in new customers and nearly 2,800 current club members who otherwise travel to Tulsa, Kansas and Texas for discount shopping.

In exchange, the Oklahoma City Economic Development Trust has proposed that a performance-based incentive worth up to $3 million be provided to Costco over four to five years. The 7-2 council vote taken Tuesday is merely a small step in the overall process, agreeing with the trust’s proposal to negotiate with Costco. After several weeks to sort out details, a plan will be submitted to the City Council for public discussion and final approval.

Shadid said that Costco’s low prices are largely possible only because of annual fees charged to customers who belong to the company’s shopping club. Based on an Oklahoma Tax Commission decision in 2015, he said, it doesn’t seem that those fees can be taxed in the same manner as sales. Cathy O’Connor, president of the Alliance for Economic Development, was unable to answer the question Tuesday.

“I think it’s more useful to think of Costco as a membership club than as your traditional retailer,” Shadid said.

Oklahoma is the only state where municipalities cannot use property taxes to fund day-to-day operations. As a result, Oklahoma City relies heavily on sales tax to support operations. In an effort to expand the city’s sales tax base, the City Council adopted a retail policy in 2009 to promote retail projects that are new to market, have a regional market draw or support underserved areas.

Gee, now that negotiations are 'starting' I wonder what the final terms will be??

They will also be repatriating OKC sales tax that is currently leaking to the Tulsa Costco.

They will also be repatriating OKC sales tax that is currently leaking to the Tulsa Costco.

Went to Wichita last month specifically to get something from Costco. I spent a couple thousand dollars in the store and a couple of hundred in dinners, etc. while in Wichita. I wonder how many more are like me that would have much rather spent the money here in OKC. Not hard to image the drain on taxes.

There's going to be a touch more cannibalization actually. I understand Costco recently introduced their own brand of chocolate hazelnut spread which is cheaper (objective) and better (subjective) than Nutella. Look forward to trying it to see if this is true.

Edit to add: To be clear, this was tongue in cheek (except the wanting to try their version part). People are driving to Tulsa and/or Dallas now, or as was just posted, Wichita, and spending hundreds if not thousands per trip. This is nothing to sneeze at. So there will also be a touch less cannibalization.

They will also be repatriating OKC sales tax that is currently leaking to the Tulsa Costco.

That is included in their "41% new business" number because they mean new business for the City of OKC, not new business for them.

In their pitch they also made a similar point about people who had been driving to DFW and ordering on-line over the years.

Wining and dining potential clients -- which the city also does -- is not in the same universe as giving them millions.

I was responding to your own example. Though my clients were generally in the low millions worth, COSTCO is a multi billion $ company looking to invest well in excess of $100 million. The incentives are relative and certainly worthwhile considering the potential return in a very short period of time.

clarification to my post above. The $100mm investment includes everything from planning to construction to inventory to personnel.

Forgive me if previously posted, but what is Costco's estimated cost to build a store like they're planning? What is their average employee count/store?

Forgive me if previously posted, but what is Costco's estimated cost to build a store like they're planning? What is their average employee count/store?

It was, post 665 just above.

Also, in response to Shadid's comments referenced in that post, I know his role is usually to be the controversial one, but when he says if Costco has already chosen a site then that means they don't need incentives, I could be wrong but I thought the incentives were, in part, to help prepare the site to actually be used. Is he proposing OKC do that work and take on those costs? The simple fact is they've already rejected one site, and it wasn't due to location but due to problems with that specific site. It's like the Frisco Road thing in Yukon...nobody will build there, EVER, until the site is made appropriate.

I hate that this big profitable company is getting essentially a subsidy.
That is how you attract big businesses to come into cities, especially up and coming cities like OKC. Sometimes, it is how you get them to stay as well. Nothing wrong with that as long as City Council members themselves aren't pocketing the profits.

I was fine with giving the incentives to cabelas. The incentive made sense, help kickoff Chisholm creek and build momentum for the area. Made sense.

Not sure why Costco gets one. A Costco isn’t going to lead to more, it’s just a Costco.

Also, is this a Dave & Busters situation? Where everyone talks about and wants one then 6 months after it’s open no one cares anymore?

Also, is this a Dave & Busters situation? Where everyone talks about and wants one then 6 months after it’s open no one cares anymore?

HAHAHAHAHA, good one!

It's funny about Dave & Busters because I live nearby but have never been.

But went by last weekend and it was completely packed, so someone is going.

It's funny about Dave & Busters because I live nearby but have never been.

But went by last weekend and it was completely packed, so someone is going.

I guess I misunderstood the concept, because I was hoping for a bar with a bunch of video games and adults having fun playing games. The reality, the few times I've been, is a bar with a ton of kids playing video games, which is just not fun at all.

^^^^^^^
That definitely was the original concept. I used to go to one off of North Central Expressway in Dallas when visiting there often in the late eighties and early nineties and it was 100% geared at adults. Not sure I ever saw children at all.

My main gripe with D&B was they built it small. I've been to locations in Houston, Dallas and KC and they were all substantially bigger, on both the dining and the games side. At least it certainly seemed that way.

I guess I misunderstood the concept, because I was hoping for a bar with a bunch of video games and adults having fun playing games. The reality, the few times I've been, is a bar with a ton of kids playing video games, which is just not fun at all.

Same here. The last time I went, it was like a Chuck-E-Cheese with a bar.

Good to see that it appears OKC will finally get Costco! This will keep Oklahoma dollars from going to Wichita, Lawrence, Dallas, Lubbock etc... I am hoping that people will see the huge difference between the monopolized Sam's and the new competition in town.

Good to see that it appears OKC will finally get Costco! This will keep Oklahoma dollars from going to Wichita, Lawrence, Dallas, Lubbock etc... I am hoping that people will see the huge difference between the monopolized Sam's and the new competition in town.

But do people really drive all the way to Wichita or Dallas just for Costco? That has to be a rather small demographic.

But do people really drive all the way to Wichita or Dallas just for Costco? That has to be a rather small demographic.

I doubt it's just for Costco, that would be rather silly in my opinion anyway. It's more like their going to those cities anyway and postponing any purchase they would make at Sam's Club.

Good to see that it appears OKC will finally get Costco! This will keep Oklahoma dollars from going to Wichita, Lawrence, Dallas, Lubbock etc... I am hoping that people will see the huge difference between the monopolized Sam's and the new competition in town.

I think the competition is as important, if not MORE important, than who is doing the competing. I personally love Costco based on my own personal experience with them, but even if I never set foot in it I'm glad they're here if for no other reason than Sam's needs a swift kick in the ass, as OnCue did to 7-Eleven. Comcast has won awards for being the worst company multiple times, and for good reason, but I'd still rejoice if they came to the metro area just because Cox needs that same kick. Or anyone else, for that matter. I've had personal experience with SuddenLink and while not a cakewalk by any means, they were MUCH more responsive than Cox has ever been. On the other side of the coin, I've also had experience with Time Warner and was happy to be rid of them, but I'd applaud even if it were them.

Bottom line, competition tends to result in a better experience for the consumer, even if they don't switch.

But do people really drive all the way to Wichita or Dallas just for Costco? That has to be a rather small demographic.

There are presently nearly 4000 Costco members who live in OKC.

Take IKEA as an example:

I wouldn't drive all the way down to Frisco just to head to IKEA, unless I had a specific big purchase planned. But I might decide to head down to Dallas for a couple of days during Spring Break and shop at IKEA while I'm down there. A business that is not available in OKC might not be the primary reason for a long drive somewhere, but it can be a factor that results in a decision that leads to someone spending more money out of state.

You can also belong to Costco and use their on-line service.

Just because you own a card does not mean you are driving to Tulsa or Dallas or Wichita.

But do people really drive all the way to Wichita or Dallas just for Costco? That has to be a rather small demographic.

It's not Costco, granted, but I've made trips to Dallas before specifically to go to Ikea, so.... It's not unheard of for people to drive several hours just to go to a specific store that we don't have here.

I joined Costco back in about 2011 when I was going weekly or every 2 weeks to KC to my eye doctor. I was going right by the store so it made sense to join and shop on the way home.

But do people really drive all the way to Wichita or Dallas just for Costco? That has to be a rather small demographic.
Yes they do. And to Tulsa now.

I’ve never driven to Dallas or elsewhere to go to Costco, but I have driven there over the years specifically to shop at West Elm, at The Container Store, at IKEA, and other stores. It does indeed happen.

I’ve never driven to Dallas or elsewhere to go to Costco, but I have driven there over the years specifically to shop at West Elm, at The Container Store, at IKEA, and other stores. It does indeed happen.

Curious if you would have if you didn't have to have a membership card? We have also driving to Dallas for similar stores but have never for Costco as I am not a member and didn't seem worth membership living so far away. Can't wait for the one here to open.

Not sure. Costco and Sam’s really aren’t my style of consumption. I used to go to Sam’s regularly to buy bulk goods for my businesses, but no longer do so as I have Coca Cola deliver sodas and water to one business and sold the others a while back. I’m sure I’ll get a Costco membership, but I don’t know that I personally would go out of my way to go there. I just know that many people do.

Urban, I think its all about having more choices. Its back to the old arguments about Aldi's vs Whole Foods vs Uptown etc. Everyone has their favorites. I'm just happy we are getting more shopping options. For me, I'll be in there about once or twice a month stocking up.

Urban, I think its all about having more choices. Its back to the old arguments about Aldi's vs Whole Foods vs Uptown etc. Everyone has their favorites. I'm just happy we are getting more shopping options. For me, I'll be in there about once or twice a month stocking up.
I am looking forward to trying some of their Kirkland products as I have heard very good reviews of them

Urban, I think its all about having more choices. Its back to the old arguments about Aldi's vs Whole Foods vs Uptown etc. Everyone has their favorites. I'm just happy we are getting more shopping options. For me, I'll be in there about once or twice a month stocking up.
I’m definitely not advocating against Costco; I think it’s great that we are getting one. Just answering Jeep’s question regarding my own shopping habits.

Like Kirkland better then Sam's clubs brand.

I think it's been about a month since the announcement of the City of OKC negotiating with Costco over a reported 3 million dollar tax deal.

I would have thought this would have been finished now and building plans filed, permits ordered, whatever, but not a peep since then.

I wonder if this deal is even viably working?

I've been a Costco member for about 10 years. I used to buy in DFW, Albuquerque and California but now I usually just drive to Tulsa every 4 to 6 weeks.

As exciting as the prospect of a Costco for OKC is, this would be a good opportunity for OKC to put its foot down and turn down and let them walk away if they want incentives. OKC should be a big enough city where it doesn’t need to offer incentives for warehouse stores to locate there and if they go to Edmond or Norman then let them. It won’t make or break the city. I’m not sure if cities like OKC are offering incentives for Costco or the like.

As exciting as the prospect of a Costco for OKC is, this would be a good opportunity for OKC to put its foot down and turn down and let them walk away if they want incentives. OKC should be a big enough city where it doesn’t need to offer incentives for warehouse stores to locate there and if they go to Edmond or Norman then let them. It won’t make or break the city. I’m not sure if cities like OKC are offering incentives for Costco or the like.

Costco definitely asks for incentives in cities they otherwise wouldn’t voluntarily go to. An example is El Paso. They used incentives to bring Costco and Top Golf to their city.

El Paso is a much smaller city than OKC if you exclude Juarez across the border which makes sense. What about San Antonio? I realize SA is much larger than OKC but are you aware of SA giving an incentives to Costco or similar stores?

Didn't we already have the "incentives are bad" "everyone else gets them so why not" "they shouldn't be needed, that's all I'm saying" discussion?

El Paso is a much smaller city than OKC if you exclude Juarez across the border which makes sense. What about San Antonio? I realize SA is much larger than OKC but are you aware of SA giving an incentives to Costco or similar stores?

There are three Costco’s In San Antonio and non of them were given incentives to build.

There are three Costco’s In San Antonio and non of them were given incentives to build.

I would bet that the large majority of Costco's have received zero incentives.

There were tons all over California where retail incentives are rare.

I would bet that the large majority of Costco's have received zero incentives.

There were tons all over California where retail incentives are rare.

Yeah, in Texas, the only places I see give incentives to retail or entertainment businesses are El Paso, Corpus Christi and the Rio Grande Valley.

Incentives have always been a mixed bag for me. I understand why they happen, and I wish cities wouldn't participate in the competition but as long as it happens they seem to be necessary. But I don't get why there's value in giving incentives to Bass Pro and not to local outdoor supply places like Backwoods. I guess in Costco's case, they pay better than minimum wage and offer some good benefits, so there's some benefit there, but if the market is there for them in OKC wouldn't they come regardless? I could see Moore, Edmond, or Norman needing to incentivize them but it feels like OKC has the base to get them without incentives. I think we're for the better with Costco but unlike other unique style businesses we're lacking like an Ikea or a Container Store, Costco doesn't bring in anything new or unique to the metro.

I think it's been about a month since the announcement of the City of OKC negotiating with Costco over a reported 3 million dollar tax deal.

I would have thought this would have been finished now and building plans filed, permits ordered, whatever, but not a peep since then.

I wonder if this deal is even viably working?

I've been a Costco member for about 10 years. I used to buy in DFW, Albuquerque and California but now I usually just drive to Tulsa every 4 to 6 weeks.

I wouldn’t worry about the deal. These things take time.

Tulsa’s Costco was officially announced in April 2014 but construction didn’t start until March 2015. The store didn’t open until April 2016, two full years after it was announced.

The difference seems to be the OKC Costco won’t actually materialize unless the 3 million dollar incentive gets approved. So, there’s an extra step that needs to happen before an official announcement that CostCo is opening a store can even happen.

That extra step is what I believe they’re worried about.

Tulsa provided similar incentives to Costco and the process was more or less the same.

Tulsa provided similar incentives to Costco and the process was more or less the same.

Ah. He didn’t mention incentives. So, Tulsa also provided incentives. Makes sense.

Incentives have always been a mixed bag for me. I understand why they happen, and I wish cities wouldn't participate in the competition but as long as it happens they seem to be necessary. But I don't get why there's value in giving incentives to Bass Pro and not to local outdoor supply places like Backwoods. I guess in Costco's case, they pay better than minimum wage and offer some good benefits, so there's some benefit there, but if the market is there for them in OKC wouldn't they come regardless? I could see Moore, Edmond, or Norman needing to incentivize them but it feels like OKC has the base to get them without incentives. I think we're for the better with Costco but unlike other unique style businesses we're lacking like an Ikea or a Container Store, Costco doesn't bring in anything new or unique to the metro.

They weren't necessary for San Antonio.

Yeah, in Texas, the only places I see give incentives to retail or entertainment businesses are El Paso, Corpus Christi and the Rio Grande Valley.
Sorry, this is total BS. Here is what I came up with using only minimal effort:

http://www.cityofcarrollton.com/departments/departments-a-f/economic-development/incentives/retail-redevelopment-incentives


Specialty Retail & Restaurant Incentive Policy

GENERAL PURPOSE
The City seeks to recruit new and retain existing unique, specialty retailers and restaurants that help to differentiate Carrollton from dining and entertainment venues in other communities within the Dallas Metroplex and to contribute to the City Council’s overall vision of enhancing quality of life for Carrollton’s residents. The proposed Specialty Retail & Restaurant Incentive Policy serves the community’s desires for attracting and retaining unique, quality retailers and restaurants that do not already have a strong presence in the marketplace.

http://rowlettonthemove.com/incentives-policy.php


B. Specialty Retail, Entertainment, and Restaurant
The City may consider providing incentives to “destination” retailers and restaurants that have the capability to attract customers from outside the area and fit well into the existing retail/restaurant economy to provide new and different shopping, dining, and/or entertainment experiences. Local, Regional, and National retailers or restaurants may apply if they meet the above qualifications. This incentive may also be considered for existing “destination” retailers and restaurants that are expanding or relocating if their added square footage is a minimum of 50% larger than their current space.

https://www.bizjournals.com/dallas/news/2017/03/01/furniture-giant-ikea-continues-progress-on-grand.html


Grand Prairie is working with IKEA on economic incentives for building roads and utilities on the plot of land. Roth said the company will be reimbursed based on how much it builds, but did not have a range of how much that might be.

By the way, the Frisco IKEA also was landed using incentives. Frisco is crazy with incentives of all kinds. So are tons of others. It only requires a simple Google search to know this. Not sure why people post things they either know to be untrue or at the very least know that they don't know for sure in this, the era of Google searches.

Speaking of crazy with incentives, there is also this one:

https://www.dallasnews.com/news/news/2013/03/02/the-colony-goes-all-in-on-big-retail-development


THE COLONY — In a sparse field off State Highway 121, work is beginning on what will soon be the largest furniture store in North America.

But the Nebraska Furniture Mart is notable for more than its size. In luring the chain to town, The Colony has promised one of the most generous economic development packages ever offered in North Texas and beyond. Documents show that the city of about 40,000 plans to spend up to $802 million to help build the store and its surrounding developments.

That commitment amounts to more than 15 times the city’s annual budget.

By the way, this web search was enlightening, thanks for driving me in that direction. Not retail-oriented, but turned up a few jewels regarding incentives in general that completely fly in the face of the statements regularly made on here about this topic. Here's a taste: https://www.nytimes.com/2012/12/03/us/winners-and-losers-in-texas.html?pagewanted=all


...Texas gives out more of the incentives than any other state, around $19 billion a year...

(This was in 2012)

And more: https://www.dallasnews.com/business/economy/2018/03/29/playing-incentives-game-texas-economic-development-wars-zero-sum-deal


...Across Texas, municipal economic development corporations paid out $139 million in 2015 in grants, tax rebates and rent subsidies to businesses, according to the most recent report from the Texas Comptroller of Public Accounts. That’s up 53 percent from 2007....

Again, I'm not advocating for or against incentives in making these posts; only trying to keep the conversation honest.

Urbanized. I'm curious, because you're more connected than me. On the issue of incentives, any thoughts on what makes a business more "deserving" for lack of a better word, of incentives. I imagine quality of life contributions, or something unique to the market. I just don't always understand the criteria. Or should there be in your opinion? Obviously with the qualifier that I'm not expecting you to be pro or con on incentives. Sort of a if you were pro question based on your experience.

Sorry, this is total BS. Here is what I came up with using only minimal effort:

http://www.cityofcarrollton.com/departments/departments-a-f/economic-development/incentives/retail-redevelopment-incentives



http://rowlettonthemove.com/incentives-policy.php



https://www.bizjournals.com/dallas/news/2017/03/01/furniture-giant-ikea-continues-progress-on-grand.html



By the way, the Frisco IKEA also was landed using incentives. Frisco is crazy with incentives of all kinds. So are tons of others. It only requires a simple Google search to know this. Not sure why people post things they either know to be untrue or at the very least know that they don't know for sure in this, the era of Google searches.

Speaking of crazy with incentives, there is also this one:

https://www.dallasnews.com/news/news/2013/03/02/the-colony-goes-all-in-on-big-retail-development



By the way, this web search was enlightening, thanks for driving me in that direction. Not retail-oriented, but turned up a few jewels regarding incentives in general that completely fly in the face of the statements regularly made on here about this topic. Here's a taste: https://www.nytimes.com/2012/12/03/us/winners-and-losers-in-texas.html?pagewanted=all



(This was in 2012)

And more: https://www.dallasnews.com/business/economy/2018/03/29/playing-incentives-game-texas-economic-development-wars-zero-sum-deal

I’m not sure how what I did was BS when I stated as what I’ve seen and not some overall absolute statement regarding Texas.

I didn’t google any information, those cities are cities I read about either in the news or on respective forums dedicated to those cities that posted about Costco, Top Golf and other entertainment and retail businesses that those cities used incentives for.

I never read about Carrollton or whichever other small cities in north Texas that used incentives so I didn’t list them above.

I’m not sure how what I did was BS when I stated as what I’ve seen and not some overall absolute statement regarding Texas.

I didn’t google any information, those cities are cities I read about either in the news or on respective forums dedicated to those cities that posted about Costco, Top Golf and other entertainment and retail businesses that those cities used incentives for.

I never read about Carrollton or whichever other small cities in north Texas that used incentives so I didn’t list them above.

Dude. Here is your DIRECT QUOTE (which I also quoted in that response:


Yeah, in Texas, the only places I see give incentives to retail or entertainment businesses are El Paso, Corpus Christi and the Rio Grande Valley.


And by the way, you make it sound like towns like Carrollton and Frisco are the same as Luther or Else Reno or something. OKC and Tulsa would KILL to have some of the retail and economic development happening in backwaters of the Dallas metroplex.

Should Dallas itself be doing retail incentives? Probably not. It's a top five market in the U.S., and has disproportionate concentrated disposable income. OKC ain't Dallas. Neither, by the way is Fort Worth (who DOES use retail incentives) or Austin. Or San Antonio. If you're comparing OKC to Dallas you'd might as well compare us to NYC or San Francisco.

But that is NOT what you were doing. You very clearly suggested that in Texas, retail incentives were pretty much only happening in El Paso, Corpus and the Rio Grande Valley. Which is clearly BS.

I mean, are you saying I read your comment wrong? Seems pretty straightforward to me.

By the way, just because Dallas proper may not be incentivizing retail doesn't mean they aren't doing hella corporate incentives, for instance TIF. This search really opened my eyes. Dallas is spending CRAZY MONEY on incentives.

Urbanized. I'm curious, because you're more connected than me. On the issue of incentives, any thoughts on what makes a business more "deserving" for lack of a better word, of incentives. I imagine quality of life contributions, or something unique to the market. I just don't always understand the criteria. Or should there be in your opinion? Obviously with the qualifier that I'm not expecting you to be pro or con on incentives. Sort of a if you were pro question based on your experience.
My personal opinion is that unilaterally disarming when literally nearly every major city in America is doing them currently would be terrible strategy and would only guarantee that we aren't considered. So I think they have to be a part of the overall picture, for better or worse, until things change nationally.

Regarding the other part of your question I think that the "but for" argument is the most compelling. Also I think an honest attempt must be made to determine whether the incentive will be offset by economic and tax gain. Pete has made some good points about how this is figured. You can certainly get whatever numbers you want in a projection if you are only trying to prove your case. Confirmation bias also comes into play.

That said, I don't think the process can/will ever be as transparent as some would like. Negotiations happen behind closed doors for many reasons, none of which must be nefarious. By the way, as I've pointed out before, the City and its agencies negotiate million+ dollar deals every day, on average. If there is an expectation that this would ever be done around the City Council horseshoe, that will never be the case.