Costco Wholesale Corp. is negotiating to lease land for a new store in Richland’s Queensgate area.
A spokeswoman for the Issaquah-based company declined to comment but the Washington Department of Natural Resources confirmed it is negotiating with Costco to lease some state-owned land there.
The property is behind the Target-anchored shopping center called Vintner Square.
It was most recently used as an orchard, which was cleared after the orchard’s lease expired. The city of Richland rezoned the lots for commercial, residential and public use in 2018.
Negotiating a land deal is not a guarantee a store will be built, but Costco is known to focus on a single site when contemplating new stores rather than tying up several locations, a strategy used by many large retailers, sources tell the Herald.
The state agency advertised the property to prospective developers in 2020 as part of its mission to use publicly-owned land to generate income for the state, including schools.
“State trust lands raise much-needed revenue for our schools, and these parcels will continue to do so for future generations while allowing the Tri-Cities area to continue to develop and grow,” Hilary Franz, commissioner of public lands, said at the time.
Costco, having rejected a site at west Pasco’s Broadmoor area, initiated negotiations when it signed a letter of interest on the property bordered by Truman Avenue, Kennedy Road, Queensgate Drive and Kingsgate Way.
Officials have not said publicly why Costco began looking at another site.
Traffic impact study
The state agency confirmed the pending deal after the city of Richland released documents assessing the traffic impacts, which it prepared in October 2022, for a Costco on the DNR land.
The Tri-City Herald obtained the documents through the state Public Records Act. As part of the release, Richland officials said it is “unaware” if Costco is intending to pursue a store at that site.
“(T)he planning efforts have gone no further than the few very preliminary documents released with this request,” the city said in an email response to the Herald.
The city documents indicate Costco would pay just over $550,000 in traffic impact fees for the Queensgate location, which will generate an estimated 652 vehicle trips during peak hours.
John Deskins, Richland’s traffic engineer described the project as a “superstore” in a email with a subject line of “Costco TIF Estimate” to Pete Rogalsky, the public works director.
Deskins wrote that he assumed the project would have 160,000 square feet of gross floor area for the store and 50,000 square feet for a distribution center.
He anticipated a 16-pump gas station, based on Costco’s existing store in Kennewick. He also anticipated a drive-thru car wash.
Area roads would need to be adapted, he advised. Widening Queensgate, upgrading freeway ramps and addressing Duportail, Kennedy and Kingsgate could all be required.
“(A)ccess management will be the key along here,” he wrote.
Costco’s lone store in the Tri-Cities is in Kennewick and is among the locations stock analysts consider “burdened,” meaning it is in heavy demand.
Rumors of a second store have persisted for years, including most recently talk of the company looking at the Dallas Road area in Badger Mountain South, off Interstate 82.
The company was widely expected to anchor the Broadmoor development in Pasco. It never confirmed the deal, but in 2021, Tim Ufkes, the Marcus & Millichap broker who represents the property owner, shared the news publicly and Pasco officials discussed the company by name.
Traffic concerns are believed to be part of the reason.
Ufkes told the Herald on Friday that Queensgate appears to be Costco’s preferred location.
He remains hopeful it will reconsider and return to the Broadmoor site, noting that half the Kennewick store’s customers come from Pasco and Walla Walla.
“We would love to still have Costco in the development,” he said.
The city of Pasco recently launched a $40 million project to bring utilities, roads and other infrastructure to the Broadmoor area.
The investment is expected to leverage $2 billion in mostly private development, including residential, retail, recreational and commercial projects in the sand dune zone between Road 100/Broadmoor and the Columbia River.
Costco (Nasdaq: COST) reported net income of $1.3 billion on net sales of $52.6 billion for the quarter that ended on May 7, up nearly 2 percent from the same period a year ago.
Costco stores are open to members who pay a $60 annual fee. It operates 853 locations, including 587 in the U.S. and Puerto Rico, 109 in Canada, 40 in Mexico and 29 in the United Kingdom.
New store openings are typically announced just a few months in advance. The coming months will see several international openings and a handful of new domestic stores, in Buckeye, Arizona, Georgetown, Texas, Denver, Colorado and Canton, Ohio
Sign Up: Boom Town Tri-Cities
Stay up to date on Tri-Cities growth and development with our weekly business newsletter. Get the latest on restaurant and business openings and closings, plus the region’s top housing and employment news. Click here to sign up. In your inbox every Wednesday.