First, Costco demands incentives to locate within a community. Yes, it’s hard to believe, but this huge corporation, which makes billions of dollars in profits per year, demands that you pay taxpayer money to come to your city. These incentives in most cases studied result in a negative economic impact for many years. In Pleasanton’s case, it could be for 30 years.
Second, much of Costco’s sales come from existing businesses within the local community: grocery stores, gas stations, appliance stores, automobile dealerships, tire stores, jewelry stores, pizza restaurants, florists, insurance companies, and on and on. A study by MIT: “Big-Box Impact Studies”, states much of the sales will come from the local county. It quotes 84%. So, using Lisa S’s rather conservative number of 50% from the City of Pleasanton, the financial impact for 30 years is below:
$750,000 annual net sales tax revenue from Costco (50% from existing businesses)
-373,740 annual payments of $6 million borrowing @4% for 30 years
-286,452 annual payments of $5 million borrowing to payback reserve 4% for 30 years
-153,450 annual costs of city services to support Costco ($1023 per 1000 sq ft)
$ -63,642 annual loss for 30 years
Yes, Costco could be a drain on our Pleasanton economy, the same as it is in 114 cities out of 116 cities in California, quoted from the Institute of Local Self-Reliance.