Wednesday, April 20, 2011

County Council Attempting to Block Costco Subsidy

Thanks to a reader tip, I came across an Examiner article (also referenced by Patch and TBD) reporting that several members of the county council are attempting to block the $4 million subsidy that Ike Leggett has proposed giving Costco to encourage them to open a store in Wheaton.  All along, this subsidy hasn't sat well with me.  First of all, Costco announced its plan to open a store in Wheaton in a press release that listed a number of other new store locations around the country.  I always wondered if the other communities threw that kind of money at Costco to get them to come or if Costco just decided to go there based purely on the potential money they would be making.

If the county is going to give my money to a company or developer to encourage them to do a project here in Wheaton, I want that money to go to projects that encourage smart growth, the use of public transit, and a better environment for pedestrians.  The Costco project does none of these things.  I understand that Costco will bring in more retail job positions to Wheaton and will certainly help spur more business at the mall, but I don't think it's the kind of project that warrants getting taxpayer money to make it happen.  As Marc Elrich was quoted as saying in the article, "Westfield Mall has gazillions of dollars...They're going to make a freaking fortune on Costco".  Well said.  This project is going to make plenty of money on its own merits.  It doesn't need a handout from taxpayers to 'balance the numbers' and make it happen.

Other postings I've done on Costco can be found here.


  1. To answer your question: other communities have either shut down Costco projects or made them comply with environmental regs and engage with the community - Costco & Westfield are building "the nicest-looking Costco ever" in Topanga, CA but people are still not happy there because the traffic is going to affect 89 intersections. Of course, in Wheaton Costco & Westfield got a loophole waiver for Environmental Site Design and an exemption from Forest Conservation Plan. If there are going to be so many jobs created, why is the $4M Economic Development Fund grant missing the job creation and monitoring requirement that other, local businesses have to comply with when receiving County EDF money?
    More importantly, the project still contains plans for a Costco gas station - slated to be the busiest retail fueling operation in the entire County shoehorned next to an outdoor pool and single-family residences.

  2. I wonder if there was an agreement signed by the county and Westfield and/or Costco. Can't wait for the lawsuit that would inevitably cost the county more than the subsidy, and at that point there is not even the guarantee that we would get the obvious benefit the Costco would provide.

    Also, if MoCo is so willing to pull the rug out on an ongoing, agreed to project, how the heck are we ever going to attract the large business tenant that all the Wheaton redevelopment plans rest on? This was a deal negotiated by the executive, approved by the counsel and now they are reneging? Why would any large business trust the county again? This not only hurts us in the short term (no Costco and a possible lawsuit), it seriously damages the county's credibility in the business community for the long term. All for what? So they can say they saved a couple of million dollars? A couple of million dollars that would have easily been made up in increased taxes. Stupid and shortsighted, but I guess we all get the government we deserve...

  3. That's a good point, Anon. The news coverage isn't really clear on exactly how binding the original agreement was. It makes it sound like it was more of a good faith agreement rather than something legally binding. I also got the impression back when this originally happened that Ike Leggett shopped this $4m deal around before getting the council's explicit agreement. Still, I think the council did eventually vote to support it. I'd rather they just said no to this in the first place rather than create some issue now where the county is seen as not standing by their word. On the other hand, I think that there are a number of different council members now so I can also see why they don't feel obligated to support a deal that they never voted for in the first place. I can also see how, when faced with the choice between public health services and money for Costco, they decided that county services need money more than the Costco deal.

  4. Hello All, The Council has never voted on the $4 million Westfield/Costco subsidy.

    The subsidy is included in the proposed County operating budget which is now being debated. If the the Council were to decide to approve the subsidy, $2 million would be dispensed in FY12 and the rest would go out in FY13. Many in the County though have had the misconception that the $4 million has already been voted on at some point. The budget deliberations should wrap up around the end of May.

    So to allay Anon's concerns there is no binding agreement that the County will provide Westfield/Costco with the $4 million and no basis for a lawsuit. The fate of the subsidy will be decided as part of the budget negotiations.

    For some more of my thoughts on the subsidy here's a "Letter to the Editor" I submitted to Wheaton Patch:

  5. KHCA Official Position: We are not opposed to the Costco gas station if it is moved to the other side of the plaza on Viers Mill Road; We are not opposed to the Costco store and $4M if community concerns are addressed. Right now Costco is not even talking to the community because we are so "unreasonable" about the gas station that is slated to be the busiest retail fueling operation in the entire County being shoehorned amidst single-family residences and an outdoor community swimming pool. Furthermore, the Costco development got a grandfather loophole waiver for Environmental Site Design, an exemption from the Forest Conservation Plan, and does not have to file a traffic study or even a site plan.

  6. Hold on here. I have heard this argument about backing out of a deal and let's get our facts straight. A deal like this requires the council to vote on it. The council has never voted on it. Ike Legget took a "straw pole" amongst the council in January of 2010 when this deal became public and proceeded then. The Zone Text Amendment was supposed to go before the council last year for a vote, but after strong neighborhood opposition, a negative reaction from The Planning Commission and an election coming up the Council decided not to vote on the ZTA, but asked Costco to go through the zoning process for their gas station. To date the council has not voted on the subsidy and in order for the subsidy to pass it must be voted on by the council, so no "deal" has ever existed. Keep one thing in mind, if The County Executive offers to buy your drinks better make sure the council agrees before ordering top shelf because the check he writes require more than one signature. "

    Chip Py

  7. Interesting discussion. I live in Wheaton off Georgia Avenue near the Popeye's where there was a recent shooting. In my 10 years here, I've seen housing prices go up like a rocket and down like a brick with tons of neighborhood defaults. The percentage decrease in Wheaton home prices was more than almost any other part of the county and the bounce afterwards has not been as strong either.

    What is the current plan for the downtown, including the mall? Downtown and in the mall, there is loads of available space. I like many small businesses in Wheaton, especially the plethora of excellent restaurants (not including the Popeye's), but what plans are there to make Wheaton more attractive to people with disposable income? If you walk around much of Wheaton, it’s like a ghost town inundated with “For Lease” signs. (Thank you to the Patch for letting me know that we no longer have a Baskin-Robbins ice cream shop, one of the newest closings, which is located next to another “For Lease” storefront.)

    I understand that many people do not like a subsidy of $2 million yearly for 2 consecutive years. What other plans exist to make Wheaton attractive to potential homeowners who plan to stay in the area? Maybe that’s not a concern to many, but as a homeowner who lives in Wheaton, it is to me. Thanks for your replies.

  8. Well, the other big plan underway is the new town center development that county and WMATA is working on with B.F. Saul. They're still working out the financial 'deal', but it will most likely involve a sweet deal on the land for B.F. Saul if not an outright dollar subsidy. This is the sort of project that i DO support my tax money going towards, though, and I think it will improve downtown Wheaton for local residents more than a big Costco in the mall will.

  9. As for making Wheaton more attractive to people with disposable income, I think I'm a good example of this. I had rented in downtown Silver Spring for 5-6 years and really enjoyed being able to walk to restaurants, groceries, and shopping. But, when it came time for me and Mr. WC to buy a place of our own, we found SS to be out of our price range. Wheaton really appealed to us because the housing was less expensive but the metro, restaurants, and shopping were still within an easy walk. So, I think we're an example of young professionals that will be attracted to Wheaton because of its housing stock and neighborhood amenities. Wheaton would not have been on our radar, though, if we hadn't already been living in Silver Spring. Building a new town center would help put Wheaton on the map for people who might not be aware of it otherwise. I really do believe that once people check out the neighborhood, the restaurants, shopping, and parks will appeal to potential residents.

  10. Thanks for your views, WC. I am not saying I'm correct about the benefits of Costco, but the mall is not a big selling point to outsiders and-my opinion-would benefit overall from Costco. Other businesses might see Costco as a reason to believe that Wheaton has enough disposable income to make it worthwhile to open here.

    I also don't see Costco as the center of a revitalized Wheaton, but I see it as better than anything else I've heard of for the mall, which I generally avoid other than for the anchor stores.

    Finally, I have seen many young families come to Wheaton only to leave when it's time to attend school. I would like Wheaton to be a place for families to stay long-term, not just long enough until they buy homes in places where they really want to become rooted. The more attractive the area overall, the better for everyone. The question is how to get there and whether it will take another 10 or 20 years.


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