Costco Wholesale Corp. plans to leave the city and move its busy north Spokane store a few miles north into an unincorporated area of the county.

Preliminary planning documents submitted to Spokane County show the big Issaquah-based membership warehouse chain plans to relocate its north Spokane operations to a site currently owned by Foothill Ranch, Calif-based Kaiser Aluminum Investments Co., more than a mile outside of Spokane’s northernmost boundary.

Wanda Jorgensen, a spokeswoman for Costco’s real estate department, says it’s too early to comment on the plans, because the company doesn’t discuss projects in the media before it applies for building permits.

“We do not have a north Spokane relocation that is at the construction stage, so we do not have any comment,” Jorgensen says.

The county, though, has asked several agencies to comment on the preliminary plans, including Spokane County Fire District 9, says Chief Jack Cates.

The project site is at 11700 N. Newport Highway, about 3.5 miles northeast of the Spokane Costco’s current location at 7619 N. Division.

Preliminary site plans show the Costco project site would encompass a 15-acre portion of a 433-acre Kaiser parcel just north of the former Kaiser Aluminum Corp. Mead Works smelting plant, which closed in 2000.

Site plans show Costco would erect a 160,000-square-foot store with a separate 7,500-square-foot fueling station and an 819-stall parking lot.

 “I’m sure folks on the North Side will like the new store,” Cates says. “It will be a bigger store with a bigger parking area.”

The north Division Street Costco store has 134,000 square feet of floor space, and a 2,400-square-foot fueling area. It’s also situated on a 15-acre parcel of land, although parking is divided on the south and west sides of the store. 

Seattle-based MG2 Corp. is designing the project.

The planned project site is mostly undeveloped land within a tax-increment financing district set up to encourage development of the area surrounding the long idle Kaiser plant, Cates says.

“A lot of folks have spent time and effort making development of that piece of ground happen,” Cates says.

Partners with the county in the tax-increment financing district include two water districts, which have increased potential capacity that would serve the property, he says.

Under tax-increment financing, the county can approve bonds to fund infrastructure improvements that would encourage development. The funding would be repaid through a portion of the increase in property tax revenue that results from the improvements.

Cates says the tax increment financing district isn’t just about Costco.

“The area is ripe for development,” he says. “We’re hoping Costco is just the beginning.”

Cates says Costco’s preliminary planning information doesn’t include a timeline for the project.

“We got the pre-application, did a review, and sent it back to the county,” he says, adding that the fire district had no issues with the proposal.

“The positive thing is getting the ball rolling on that Kaiser property,” Cates says. 

Julie Shattow, a project manager for the county, says the next steps for Costco would be to submit environmental information and a building permit application.

The Costco move also could be a sales-tax boon for the county, albeit mostly at the city’s expense until a new user occupies the current Costco site.

Bob Wrigley, the county’s chief budget officer, says, “From the county’s standpoint, big box stores generate sales tax. It would be very good for us to have Costco in the unincorporated area.”

Wrigley declines to estimate how much sales tax revenue Costco would bring to the county, but adds that the big store likely would attract other development.

“There’s a lot of room for other commercial development,” Wrigley says. “Obviously, Costco is a great anchor store.”

The county’s share of sales tax revenue in unincorporated areas is 1 percent of taxable sales, meaning the county receives $1 in sales tax revenue for every $100 of taxable sales. The city of Spokane receives 85 cents for every $100 in taxable sales within its boundaries.

Costco recently reported that its average sales per store was more than $166 million in fiscal 2015. At a 160,000 square feet of space, the envisioned store would be somewhat larger than Costco’s average store size of 143,000 square feet. Those numbers indicate that well over $1.5 million in annual sales tax revenue could be at stake.

Comparing that to sales tax revenue projected in the 2015 budgets for the city and county respectively, the swing in annual sales tax revenue from the envisioned Costco move alone could boost Spokane County’s annual sales tax revenue by nearly 4 percent, while reducing the city’s sales tax revenue by a similar percentage.

The city of Spokane annexed the Division Street Costco site in 2008 and split its portion of the sales tax revenue with the county for two years to soften the blow to the county’s revenue.

As part of the annexation agreement, the city agreed to turn the bulk of the property tax revenue from the north Division Street site over to Spokane County Fire District 9 as long as the district exists, even though the city now provides fire services to the site.

Cates says that agreement will remain in force regardless of whether Costco moves.

It wouldn’t be the first time Spokane has lost a sales tax-rich Costco store. In 1983, early in the company’s history, Costco opened its third store at 800 E. Third, near downtown. In 2001, Costco relocated that store to 5601 E. Sprague, which became part of Spokane Valley when that city incorporated two years later.

Costco opened the north Division Street store in 1992.

The warehouse retailer had 697 stores worldwide as of November, according to a profile on its website. The company plans to open 21 new warehouses and relocate up to two warehouses this year, the profile says.

It reported sales of $116 billion for its fiscal year ended Aug. 30.