Costco in negotiations with Carson-Douglas

Costco Wholesale may be looking towards Carson City, but Douglas County isn't out of the picture yet.

Douglas County Manager Dan Holler said while the county hasn't had formal negotiations with Costco in more than a year, private developers in Douglas County have talked with the company.

"Would I like to see them here in Douglas County? Absolutely," Holler said Wednesday. "But locating in the region helps us. I'd rather see them locate in South Carson than North Carson. It's an indirect benefit to Douglas County."

From experiences dealing with Target and Home Depot, Holler said, he knows nothing is solid until a contract is signed.

"Until they actually sign a deal, you don't know actually what they're going to go," he said. "I believe Costco will land in South Carson/North Douglas County regardless. They're going to look for the best deal they can get."

Although Carson City officials confirmed Tuesday their meeting with Costco representatives, the process of getting the company to Carson isn't new.

"They've been talking about this for years," Redevelopment Director Rob Joiner said. "They're closer now than they have been. This may be our only opportunity to keep them in Carson City."

Community Development Director Walt Sullivan said Costco presented preliminary site plans for a 15-acre site next to Fuji Park. Plans show basically a box with parking around it, Sullivan said, and the store would probably be about 150,000 square feet. Most of the utility infrastructure at the site is in place because of the anticipated growth of Fuji Park, he added, although some improvements would have to be made. The city still has some negotiating to do with the U.S. Forest Service regarding a three-acre parcel important to Costco's development, Sullivan said.

"If we're able to land that facility, that increases our sales tax and Question 18 funding for open space and parks," Sullivan said. "It's an opportunity for Carson City and just a tremendous plus to the (sales tax)."

According to a September article in Fortune magazine, the average Costco Wholesale store garners $91 million a year. Food products are not subject to sales tax in Nevada. Assuming 60 percent of all merchandise is not food, taxable sales would be around $54 million.

After the state collects a 7 percent sales tax, Carson City would receive about 2.75 percent, or about $1.51 million a year. One quarter of one percent, $135,000, would head to Quality of Life park monies and another $135,000 would go to the city's road maintenance fund. That would mean Costco would send about $1.24 million into the city's general fund each year.

Carson Area Chamber of Commerce Director Larry Osborne said the chamber would encourage the city to attract Costco to the area.

"In October and September, the sales tax reports showed that Carson City had a sales tax decline," Osborne said. "That's not a crisis, but it's something that draws your attention. Bringing Costco here would shore up the tax base. We know people go to Reno to shop at Costco, and we'll be bringing that money back to Carson City."

Carson City has several critical steps to take before Costco could locate off Clear Creek Road. The Parks and Recreation Commission and the Redevelopment Authority Citizen's Committee are tentatively set to consider the property's addition to the redevelopment district Dec. 15. City supervisors are tentatively set to hear the issue Dec. 16.

Costco key information:

Annual revenues (fiscal year ending August 1999): $27 billion

Number of warehouses: 317

Warehouse sizes: 70,000 to 160,000 square feet, average size 130,00 square feet

Potential size of Carson warehouse: 150,000 square feet

Average revenue for a warehouse: $91 million

Members: 13.5 million

Business card price: $35 (3.9 million card holders)

Individual Gold Star (individual) card: $40 (9.6 million)

Executive membership card: $100

Costco Wholesale is based in Issaquah, Wash., and is a publicly traded company.