Costco files to build new $24.6 million Tri-Cities store. But there’s a big catch

Costco Wholesale took another step toward building a second store in the Tri-Cities , even as it continues to negotiate a long-term lease for 28 state-owned acres in Richland’s Queensgate area.

Costco does not yet own or control the site, which is behind the Target-anchored Vintner Square shopping complex. The property is owned by the state of Washington and managed by the Department of Natural Resources. The two sides have negotiated a lease for more than a year.

Negotiations are ongoing but the latest estimate indicates they could be complete in September, the agency confirmed.

“We are currently wrapping up the Agreement to Lease negotiations and heavy into final lease negotiations. We plan to have several meetings over the next few weeks to wrap up negotiations,” Courtney James, DNR spokeswoman, told the Herald.

While negotiations continue, Costco is taking steps to secure approvals to begin construction.

The Issaquah-based company applied for both grading and construction permits from the city of Richland. Records indicate it will build a 182,644-square-foot structure, which is nearly 20% larger than its lone Tri-Cities store, on Gage Boulevard in Kennewick.

Lydig Construction will build the project for Costco Wholesale , represented by its director of real estate development, John Shaw.

Mike Stevens, Richland’s planning manager, confirmed the permits are pending and were submitted by Costco as an authorized representative of DNR.

Costco itself is remaining silent on the subject of its second Tri-Cities location.

A spokeswoman reaffirmed that it only discusses stores that will open in the coming months. The 13 stores on the Costco calendar include two in the Northwest — Ridgefield, Wash. (August) and Bend, Ore. (October).

The timeline for completing the Richland lease has been a moving target.

In March, when Costco submitted the project for review under the State Environmental Policy Act (SEPA), negotiations were described as being in their final stages, with a potential deal expected in April.

The building permit application gives a construction value of $24.6 million to the future Richland store. If approved, it will be nearly one-fifth larger than Costco’s lone Tri-Cities locale, its 155,000-square-foot store on Gage Boulevard in Kennewick.

The store will have a gas station with 16 pumps, under plans previously submitted to the state. Construction would take about a year.

Costco has long been in the hunt for a second location.

After rejecting a site west of Broadmoor Boulevard in Pasco for undisclosed reasons, it lit on the DNR property, which was being marketed for commercial use after orchards were pulled out.

In June 2023 , the state agency confirmed it was negotiating with Costco.

The confirmation came after the city of Richland released documents assessing the traffic impacts of a Costco at Queensgate. The study was prepared in 2022 and was released under the state Public Records Act. The study contemplated an additional 652 vehicle trips during peak hours.

Costco would have to pay the city about $550,000 in traffic impact fees.

While terms of the final deal are not public, it could be a valuable agreement for the state agency, which manages lands to benefit the state and schools.

In its initial offer , Costco proposed a 55-year deal worth $12.2 million to the state in the first 25 years.

The rent for subsequent terms would be based on a reappraisal after the first 25 years. Costco requested the option to buy the property if DNR is legally able to sell it in the future.

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