The second largest retail chain in the world is one step closer to bringing a store to Oklahoma City.
The Oklahoma City Economic Development Trust approved the beginning of negotiations Tuesday for a retail incentive agreement with Costco.
The Journal Record’s Molly Fleming told KGOU the agreement would give the city a 10-year agreement with Costco, during which time the company could keep 85 percent of its sales tax collections with a maximum of $1.2 million per year, with an overall maximum benefit of $3 million. The agreement would end after the company kept $3 million in sales tax collections or ten years, whichever comes first.
“They said during the meeting that there were already 2,777 Costco members in the city, so those people are shopping in Tulsa, Dallas or online. So the city is hopeful that they will be able to bring that sales tax collection money back to the city,” Fleming said.
Costco wants to build the new 150,000-square-foot store in the Chisolm Creek development at Western Avenue and the Kilpatrick Turnpike. It would be the first Costco in Oklahoma City.
Jacob McCleland: This is the Business Intelligence Report, a weekly conversation about business news in Oklahoma. I'm Jacob McCleland, with Journal Record reporter Molly Fleming. Hey Molly, thank you for talking with us.
Molly Fleming: Hey, you're welcome.
McCleland: Now I have several business stories I want to talk to you about including some movement on Oklahoma City getting a Costco. This could potentially be the first Costco in Oklahoma City which, frankly, kind of surprised me. Where are we at with bringing a Costco to Oklahoma City.
Fleming: The city is starting negotiations on a retail incentive agreement. This was approved Tuesday during the Oklahoma City Economic Development Trust meeting. If it all goes through, the city would have a 10-year agreement with Costco where the company gets to keep 85 percent of its sales tax collections annually with a max of $1.2 million a year. The total would be 3 million dollars, so whichever comes first is what Costco would have. So either 10 years or $3 million dollars. Costco will be built in the Chisolm Creek Developments, which is that Western and the the Kilpatrick Turnpike. They said during the meeting that there were already 2,777 Costco members in the city, so those people are shopping in Tulsa, Dallas or online. So the city is hopeful that they will be able to bring that sales tax collection money back to the city.
McCleland: Angry Scotsman rueing took a step toward renovating a building at the corner of Lee and Reno. What's happening there?
Fleming: Yeah, there should be some equipment installed in March and luckily the Downtown Design Review Committee gave TTS Construction co-owner Christian Scorsone some leeway. The plan is to put a grassy area on the building's east side and have people enter from the building's south side next to an alley. The grassy entrance, though, is against regulations required by the Americans With Disabilities Act, so that will require some reworking. The design committee also asked that the storefront be redone properly and the windows not covered as planned. Because the equipment was coming next month, the DDRC approved the plan with requirements that those changes and some others be met.
McCleland: The developers of the Central Exchange Buildings at 7 and 11 Norhteast 6th Street are looking for some tenants. Now this is an old building dating back to the early 1900s. What's going on there?
Fleming: These buildings, the first floor, is, you know, like I said, is required by downtown regulations to have retail or something interactive with the street. You don't want to, you can't close off the doors, put in an office and have people walking by. So the Tribune Capitol team wants a brewery or restaurants on the first floor, then office on the second and third floors. The developer said they've really seen a lot of interest. Office towers spaces, they start at about 5,000 square feet and you're in a tower. So sometimes if you need less than that it can be hard to find an office in downtown but these spaces start at 4,500 square feet and you could be above a brewery. So your ability to recruit new employees could be huge.
McCleland: Another old building could be getting some new windows. The owner of the former Spaghetti Warehouse building is planning to install 216 windows. What are the long term plans there?
Fleming: His long term plan is to put in condos. The building is not on the National Register of Historic Places, though it could be. That is a decision that is made by the ownership. He's working with architect and preservationist Catherine Montgomery, who knows that historic registry process backwards and forwards. So she made sure the windows would still be historically compliant, but he doesn't know if he'll list it. Buildings on the National Register of Historic Places, which are also eligible for federal and state historic tax credits, they can't be sold. So if you wanted to use it for condos he couldn't put it on the National Register of Historic Places. He'd have to lease the space. And he mentioned, you know, he thought about doing a hotel. But there's hotels popping up all over big town. So he seems to think that condos might be his best bet.
McCleland: And one last thing. In Midwest City, the Soldier Creek Industrial Park is ready to accept business tenants but administrators there are being very selective. Why so?
Fleming: Well, Midwest City has a major employer, you know, Tinker Air Force Base. People drive from all over the state to work there and so those are high tech jobs. But the city wants people to be able to do more than work at Tinker. It wants to create living wage jobs so people have more options in Midwest City. They also want to make sure those are not boom and bust type industry jobs as well. So they want to make sure it's something that can reach people who maybe you know maybe don't have a college education or want to work in manufacturing. And it's an industry that will be around for a long time rather than something that only goes up and down.
McCleland: Molly Fleming covers real estate for the Journal Record newspaper. Molly thank you so much.
Fleming: Hey thank you Jacob.
McCleland: KGOU and the Journal Record collaborate each week on The Business Intelligence Report. You can find this conversation at kgou.org. You can also follow us on social media. We're on Facebook and Twitter. @journalrecord and @kgounews.
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