Costco on Tuesday cancelled all plans to relocate to the intersection of Oasis Road and Interstate 5, a stunning development that leaves the future location of the sales-tax-generating behemoth up for grabs.
Redding City Manager Kurt Starman made the announcement during Tuesday’s City Council meeting. He said the long-simmering, on-again, off-again project fell apart when Costco could not come to terms with the Levenson Family Trust, owners of the land.
Starman said representatives for the family trust, in turn, place the blame on the city for failing to secure a development agreement with the property owner. Without that agreement—that covered improvements and incentives that would theoretically allow Levenson to develop the entire Oasis Towne Center project—Levenson would not commit to selling 15 acres of land to Costco.
The stipulations listed by Levenson, characterized by Starman as last-minute demands, amounted to an investment of more than $32 million of taxpayer money. “I made it very clear that there’s just no way” the city could OK any such agreement within Costco’s deadline, Starman said.
The retailer, which opened its Redding warehouse on Dana Drive in 1990, grew increasingly frustrated, adopted a “fish or cut bait” stance “and regrettably, the latter occurred today,” Starman said. Costco formally backed out of a 2013 credit and reimbursement deal to finance $5.4 million in improvements to the intersection of Oasis Road and Twin View Boulevard.
Councilman Gary Cadd, who had been serving as a go-between, questioned the $32 million figure. He noted that the 300,000-square-foot Towne Center project also was going to be the potential home of a Fred Meyer store and a Bass Pro Shops superstore.
Councilwoman Kristen Schreder said she wants Redding to be viewed as welcoming to business but noted “there’s a cost” with any open-arms approach. She said it was just not prudent to use taxpayer dollars to subsidize Levenson’s plans for future development. Nor, she said, is it fair to blame the city for balking at “what appears to be a last-minute effort by the developer for an agreement that benefits” only the developer.
Redding attorney Walt McNeill, who represents Levenson, called the collapse of the Costco project “a wakeup call that all of us can improve our game when it comes to development” and expressed the hope “that we can all move forward.”
Like Schreder and the other council members, Councilman Brent Weaver expressed his support for Costco. “Do we want Costco in Redding? Absolutely we do,” he said. However, he said his experience as a small business owner and developer has taught him the importance of negotiations and deals built on trust, not those that are crafted “in smoke-filled rooms with pizza and beer.”
He warned against decisions similar to the one Stockton made to build a minor-league baseball field that contributed to that city’s 2013 bankruptcy filing. “We have to watch out for our kids,” Weaver said.
With 4-1 vote, the council appointed the mayor and vice-mayor to serve as negotiators for any future discussions with Costco. Cadd was the lone dissenter; he vowed to continue talking to Levenson and Costco. “I won’t allow the council to freeze me out. This is a deal to keep Costco in the city,” he said.
Where the big box store relocates to is anybody’s guess at this point. Costco is presumed to be interested in I-5 frontage and one potential location being bandied about is the former Kenworth Truck dealership near I-5 and South Bonnyview Road.
Anderson is licking its chops over the idea of landing a new Costco, and Shasta County Supervisor Les Baugh, whose south county district includes Anderson, was quick to post an open letter to Costco on his Facebook page extolling the virtues of Anderson’s business-friendly environment. Baugh’s wife, Susie, is mayor of Anderson.
In other action Tuesday, the council:
Former Police Building
–Voted 4-0, with Councilman Weaver abstaining, to give Starman and downtown developer Jamie Lynn 90 days to come to terms on the sale of the former Redding Police station on California Street.
Lynn, the owner of Building Adventures, Inc., has proposed converted the brick building into a full-service restaurant. The adjacent parking lot would become a two-story, mixed-use building that would house five residential units, office/retail space and a fast-casual restaurant.
If a deal is reached, Lynn would have to pay the fair market value of the building, Starman said. The transaction would have to be approved by the full council.
An artist’s rendering of Jamie Lynn’s proposal for the former police station on California Street.
A Third SkyWest Flight to S.F.
–Voted unanimously to a use money from a $500,000 federal grant to provide a minimum guaranteed revenue to SkyWest Airlines; in exchange, the regional carrier will add a third daily flight to San Francisco International Airport beginning April 5.
SkyWest dropped the third flight in March 2015 when it switched from 30-seat turboprop planes to 50-seat jet planes. The airplane upgrade has been such a success, Public Works Director Brian Crane said, that passenger counts are up 30 percent.
Under terms of the agreement, SkyWest will receive a minimum guaranteed revenue of $450,000 for a year. However, if in a given quarter the carrier’s passenger revenue is greater than its costs plus a 5 percent margin, no subsidy is owed.
Sex Trafficking
–Voted 5-0 to authorize City Attorney Barry DeWalt to form a citizen committee to explore ways Redding can combat the proliferation of illicit massage parlors that are believed to abet the illegal trafficking of women and children as sex workers.
DeWalt said a simple online search revealed 16 businesses in Redding that emphasized the erotic and sexual nature of their masseuses. A second search revealed more than a dozen massage parlors where clients were posting reviews of the sex acts performed under the guide of massages.
“I am of the firm belief we have a sex trafficking issue here, or at least prostitution,” DeWalt said.
A couple of certified massage therapists expressed their support of an ordinance cracking down on illicit operators, but expressed concern over a proposed state certification requirement. Such certification can require 500 hours of training and cost more than $12,000, they said.
