A Costco in Champaign is not so far-fetched after all.
Pending action by the Champaign City Council, that is. The Council’s next meeting will include discussion of a proposed tax incentive plan to attract the warehouse club retailer to build a new store at Market Place Shopping Center.
The meeting is Tuesday, April 9 at 7 p.m. in the City Council chambers.
The Costco would sit on the former Bergner’s location, in a new facility all on one level. City planner Rob Kowalski said the existing building would be demolished with Costco creating a new building on the same site.
A city official told chambanamoms.com that building in the Market Place location is more expensive than building on a green field location, and the incentives will offset that extra cost.
Kowalski said the incentive plan would be “to share in the sales tax revenues they would generate.”
“(Mall owner) Brookfield will demolish the Bergner’s building and a northwest portion of the mall,” Kowalski said. “They will relocate some existing stores in the mall to do this. Brookfield will build a new wall that basically shrinks the square footage of the mall. They will subdivide the property and create a lot they’ll sell to Costco and they’ll build a new store that will not connect.”
Brookfield has submitted a permit to demolish and intends to begin demolishing in the fall, Kowalski said. Costco would begin construction in spring 2020 with a projected opening later that year.
“It’s one of those stores that residents have asked about,” Kowalski said. “So it’s exciting they’ve decided to locate in this market. Even more exciting is its location next to the mall which allows the mall to reduce its size. It’s no secret malls are downsizing and Market Place won’t be able to fill the Bergner’s space. This helps keep our mall healthy while helping it to downsize.”
The property would also include a gas station on the southeast corner of Neil and Town Center Boulevard, Kowalski said. “It’s important to note that Costco will rebuild the entire parking lot around their store. It will be reconfigured to fit the lot.”
Kowalski noted Costco chose not to have an opening directly into the mall because it would create difficulty operationally. As a membership store, it has staff at entrances to check membership cards upon customers’ entry and a second opening would double those efforts.
Costco has 2,500 existing members within a one hour’s drive from C-U, many of whom have relocated from the Chicago area or use the service online, Kowalski said. He added that Costco is expected to employ 150-225 workers. Cashiers are paid $14 an hour and health care benefits are offered even to part-time employees after a minimum number of hours worked.
Champaign is not the only Illinois community to use tax breaks and incentives to attract a Costco. Loves Park, which is right next to Rockford, passed tax deals from the city as well as the county in late 2018.
Even larger cities such as Oklahoma City have given Costco economic development incentives. In February 2018, its city council approved a $3 million incentive package, approved by a 7-2 vote. The Oklahoma City store is scheduled open in May.
Costco currently has 766 locations worldwide, including 235 stores outside of the U.S. Currently, the closest Costco to Champaign is located in East Peoria; it is the only Costco store in downstate Illinois. Its clubs average 144,500 square feet, “comparable in footprint to a city block in Manhattan.”
Bergner’s announced in April 2018 it was going out of business, and would liquidate all stores. The Market Place location has been closed since late August, and the Bergner’s building is in the process of being demolished.
A Costco, even one without a direction connection to Market Place Shopping Center, would rejuvenate the mall’s prospects. Stores have been closing at a rapid clip, and although new ones have opened in their place (think H&M and Carter’s), vacancies have outpaced openings.
It’s a precarious time for traditional anchor department stores such as Macy’s and JC Penney’s, which continue to close locations in 2019, but the Champaign stores remain.
This wouldn’t be the first time that Market Place has demolished an old anchor footprint to pave the way for new stores. That’s what happened in 2014 after Sears closed; Dick’s and Field and Stream opened with new construction in that location in 2015.
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