Tom's #Mailbag, June 21, 2019

 

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CHAMPAIGN — Nobody has to sell Clarissa Nickerson Fourman on Costco.

This Champaign City Council member and busy mother of six said she's already an online Costco shopper, and she was excited to learn this warehouse-club retailer plans to build a new 150,000-square-foot store in Champaign.

"It really thrilled me," she said.

Fourman and other council members will be asked to weigh in next week on a development agreement proposal that would allow Costco to keep some of the sales-tax money its planned Champaign store at Market Place Mall would produce.

Given the jobs the store would create and the lure it's projected to be for both local and out-of-town shoppers, several council members already view the coming of Costco to Champaign as a big score.

Fourman said the north side of Champaign needs this kind of development with jobs paying what Costco does — $14 an hour for starting cashiers and $22.50 an hour on average — plus benefits available even to part-timers.

Not only that, Champaign needs those jobs close to where many people likely to apply live, she said.

Fourman, one of about 2,500 current Costco members living within an hour of the future Champaign store, said she sees the retailer as good not only for people like her buying for big families, because it has products "at good price points" that even somebody shopping for a household of one would buy.

"They're also going to bring different brands that we don't have in our market," she said.

Fellow council member Tom Bruno said Costco's choice to develop here affirms the strength of the local economy and the future of Champaign.

"This is going to be, economically, so meaningful for our community," he said.

Malls throughout the country are struggling in general, Bruno said, but the plan to demolish the former Bergner's store here and build a separate stand-alone Costco is likely going to drive more traffic to the mall.

And given that the nearest Costco is in East Peoria, he said, it's also likely to generate more business for other stores and restaurants in the area from visitors making the trip to Champaign to shop.

"We become more and more of a regional retail hub, and not only does a rising tide lift all boats, but a big attraction like this is good for the retailers that, at first glace, you'd think they were competing with," he said.

Bruno said he also views Costco as a bit more upscale, more likely to serve in-store samples of salmon than macaroni and cheese.

"I'm not a member," he said. "But I will be."

Sales-tax revenue split

Costco is generally recognized to be a good employer, according to Laura Weis, president and CEO of the Champaign County Chamber of Commerce.

"Additionally, companies like Costco, they do their homework, so they have a very complex process they go through when they select sites," she said. "So for a company like Costco to know they can put a store here and be successful speaks really well for our community."

The proposed development agreement with Costco calls for the city to share $2.75 million of the new sales-tax money the store brings in, with expectations that the store will generate about $7.1 million in sales taxes within six years — leaving the city to keep $4.3 million.

Rob Kowalski, the city's assistant planning and development director, said Costco requested just the sales-tax incentive, and that money would help cover the about $2.9 million in extra costs it will incur by developing at the mall as opposed to building on vacant land.

While Costco would share in the store's sales-tax money for a time, Kowalski said, the chain won't get any of the motor-fuel tax money from its planned gas station at the southeast corner of Neil Street and Town Center Boulevard. Nor is the city being asked to share in road and other infrastructure costs related to the store, he said.

Costco will likely start out employing about 150 people and ramp up jobs as the store takes off, Kowalski said. The company would be working with Illinois Worknet in Champaign to host job fairs and handle hiring, he said.

'A rising tide'

Council member Matthew Gladney said he would love it if Champaign could land Costco without any kind of sales-tax reimbursement. He also doesn't want to see Costco end up draining business from existing retailers, he said, but he's leaning toward supporting the deal.

"My hope is that (Costco) will be a rising tide for the community," he said.

Bruno said it's important to keep in mind that the city would be agreeing to let Costco keep some of the sales-tax money the Champaign store generates, rather than writing the company a check.

"At the end of the day, we don't pay out any money," he said.

Council member Will Kyles called the Costco store a great opportunity for the community for three reasons — good-wage job opportunities, the boost in traffic it stands to bring to the mall and the fact that the chain already has a base of existing customers in the area.

"That's very important to me," he said. "What it means to me is that people are not just customer shifting. You're not building one business to lose another."

Shop till you drop

Ten (of the many thousands of) things you can buy from Costco:

1. A six-piece leather reclining sectional

2. A vending machine

3. Resin authentic barn doors with assembly kit

4. An eight-book boxed set of "The Chronicles of Narnia" by C.S. Lewis

5. An Alaska cruise vacation

6. A 12-pound Japanese Wagyu boneless ribeye roast

7. A Schwan's ham dinner for eight

8. Birth announcements for your new bundle of joy

9. An infrared sauna

10. A garage-building kit

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