Second Costco to stay in Regina city limits for $6.7 million

Regina city council has chosen to shell out $6.7 million to keep a second Costco location within the city’s limits, despite the frustration of many councillors.

“It is very disappointing that we have to use our reserves to secure this development,” said Ward 6 Councillor Victoria Flores, who voted in favour of the motion.

Council passed the motion to take the funds from the City’s Land Development Reserve in a vote of 9-1. Only Ward 5 Councillor Sarah Turnbull voted against.

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The company’s second location was originally approved in a discretionary use application by council last year, on the western edge of the city.

However, Costco released the location with Forester Harvard Developments after the company found the cost would be to high to build, according to a report from city administration.

Instead, the company looked just outside of Regina city limits on land that belongs to the Global Transportation Hub.

Delegate Blair Forster, with Forster Harvard Development Corp., told councillors the company has never received any incentive from the City of Regina in its over 30 years of development. He said it wouldn’t have asked for this incentive if it were not “critical.”

Forester said the developing company would use Costco to develop the Westerra area, like Walmart used it to develop Harbour Landing through other housing builds.

A portion of the property tax Costco will pay for at 8201 and 8701 Dewdney Avenue will be recouped into the City’s Land Development Reserve until the $6.7 million is paid back.

In a report from city administration, it said Costco on Aurora Road will generate $519,737 in municipal property taxes this year, with adjacent businesses set to bring in $538,029 in municipal property taxes at the end of this year.

Costco sees two million customers a year in Regina, with 5,500 card members walking through its doors a day, it said.

Ward 8 Councillor Shanon Zachidniak voted in favour of the motion, but was not happy to approve the $6.7 million when a deal without the incentives was in place last year.

“We know that the community of Westerra has been struggling, and there aren’t any other anchor tenants — and I can confirm this — who come looking to locate in Westerra,” she said. “This is an opportunity for Westerra, this is an opportunity for our entire city for the tax benefits.”

Flores said her greatest disappointment was with the provincial government.

“It’s troubling to see that they would foster a competitive environment, particularly through the GTH land, that effectively pitted Regina against a very unfair advantage and forced our hand into this incentive,” she said.

Turnbull voted against the motion, saying council was inserting itself where “we don’t belong in the free market,” but was still glad Costco was planning to develop in or near Regina.

The grant will be received in three payment instalments: $1 million within 30 days after getting the land, $2.9 million within 30 days after construction starts, and $2.9 million within 30 days of the store opening.

If the company doesn’t meet the timelines, the city would get its money back.