Cities hoping for increased tax revenues from the addition of Costco to their retail mix will have to expect to pony up a considerable amount of money for the privilege of hosting the store. According to a recent article in the Dallas Morning News, the retailer, whose annual sales are now at $116.2 Billion, asked the city to give them an “economic development” grant (that’s right, an outright grant, not a loan), of $3 million in order to locate the first Costco in the Dallas city limits.
“According to the just-posted agenda for Monday’s meeting of the Dallas City Council’s Economic Development Committee, the city’s Office of Economic Development will ask the council to approve a Chapter 380 economic development grant “not to exceed $3,000,000″ on May 11. It’s also likely to come up at Monday’s meeting — given both the size of the request and some council members’ concerns that a company that made a profit of more than $2 billion last year needs “a sweetener” to come to Dallas,” the article states.
The city council members believe that without handing over this blackmail, they will never see a Costco in their city. There is no mention about their projections for what the city will receive in return. They just seem to care about their bragging rights and pleasing their Costco members and those who want to have the opportunity to spend large amounts of money on large amounts of goods.
See the full article here.
UPDATE: The Dallas City Council approved a $3 million subsidy for the retail giant on May 10, 2016. According to the Dallas Observer, Council opponents of the handout, led by opposition-faction honchos Scott Griggs and Philip Kingston, argued that the city was just handing cash to business that would likely come to the city anyway.
“Every broker in town can confirm that Costco is committed to coming to Dallas. If we do not give them this $3 million, we will still get a Costco. If we pass a resolution banning Costco from the city of Dallas, we would still get a Costco. It may not be today, or it may not be tomorrow,” Kingston said. “But what we know is that their primary competitor has managed to make two sites within three miles of this site work without asking for a dime.”
For the city to give money to a company like Costco, Kingston argued, the expectation of consequences for not doing so has to come from more that the company “whispering in our ear and telling us [they’re] going to Plano.”