The Puget Sound Business Journal is reporting that Costco Wholesale Corp. is negotiating with city officials in Issaquah, Wash., to add as much as 1.5 million s.f. to its corporate headquarters through a new development agreement, according to Keith Niven, Issaquah’s economic development director.
“They are trying to chart a path for their future,” Niven said. “They want a stable location for their headquarters.”
A Costco spokesman declined to comment to the Journal on the publicly traded company’s plans for its headquarters in this suburban city east of Seattle.
Costco operates an international retail chain of discount warehouse club stores. Its headquarters are located in Pickering Place, a 1.7 million-s.f. mixed-use development that includes a Costco store, a Lowe’s Home Improvement store and other retailers. The current master plan for Pickering Place dates back to 1987.
The Journal says that Costco contacted the city in late January to request negotiations for a new development agreement and a rezone that would provide “the flexibility and predictability we require for needed future expansion of our home office.”
Niven said Costco likely would need to acquire additional parcels of land in the vicinity since Pickering Place is largely built out.
Whether Costco would require a rezone for its future expansion is unclear, Niven said. The city is developing new standards to classify the area as urban core. If those new standards don’t allow for sufficient growth, the company may press for a rezone as an urban village, he said.
“I don’t think Costco cares what tool the city uses to get them their growth, but they do want to be sure they can count on it,” Niven said.
With the expansion potentially adding as many as 6,000 employees some day, the biggest concern is likely to be traffic, Niven said. Issaquah is looking at creating a $50 million local improvement district to improve traffic flow in North Issaquah. Local property owners, including Costco, would share those costs with the city.
Costco’s expansion is welcome news for Issaquah, according to the Journal
“Our economy is very service based—there’s a lot of retail in Issaquah,” Niven said. “For us, having office employees is good in that it gives us more diverse employment.”
The timing of the expansion is unclear. Niven couldn’t say when it would start or whether it would take place in phases.
“We are reading tea leaves from the outside,” he said.
But he observed that companies doing business with Costco that have been housed in its headquarters building are seeking office space elsewhere.
