Alternatives to Costco in Johnson Drive Development Zone

According to the Draft EIR submitted by the Planning Commission, alternatives have been considered in deciding upon what should be done with Johnson Drive. However, they have already seemingly rejected some scenarios that could prove more beneficial in terms of traffic and pollution.

Below is a chart showing the 5 alternatives they considered. They have already zeroed in on 2 and 2a as the ones they are advancing, since they include Costco. And they have already rejected Scenario 3, which could be the most beneficial in terms of job growth and lessen the impacts of traffic and pollution.

Summary of Economic Impacts of Various Scenarios Initially Proposed In the Johnson Drive Economic Development Zone EIR (Draft)


alternatives table 2000

Alternate Scenario 3: Headquarters Office, Hotel and New Retail (No Costco)

  • higher annual net fiscal balance than Costco + existing
  • $260,000 more in annual net property tax for Pleasanton, 110% more jobs, $1.4 million more in impact fees
  • already rejected by Planning Commission, according to the DEIR

According to the EIR: The Headquarters Office, Hotel and New Retail alternative would meet most or all of the objectives of the EDZ: it would result in the adoption of a consistent framework for the City’s review and approval of new uses in the area, and the headquarters office use would promote the development of locally and regionally accessible uses. This alternative could also generate a potentially substantial amount of revenue for the City, through the development of a diverse mix of uses,  although this alternative prioritizes the development of a large amount of office space within the EDZ area, and would generate lower annual revenues for the City than other alternatives.

Alternate Proposed: Reduced Retail

According to the EIR: The Reduced Retail alternative would include some of the same uses as the proposed EDZ, including general retail and a hotel use, but would not include club retail uses. Under this alternative, the EDZ would be adopted, and Parcels 6, 9, and 10 would be developed in an initial phase that would take place within the same buildout period for these parcels as described for the proposed EDZ. Under this alternative, existing uses on other parcels within the EDZ area would continue to operate.

Under the Reduced Retail alternative, the area of the proposed EDZ would be developed with approximately 259,500 square feet of new building area, including:

  • 171,500 square feet of general retail uses; and
  • 88,000 square feet of hotel uses.

Under this alternative, it is assumed that development of the hotel uses would take place first and development of general retail uses would take place over a longer timeframe.

The Reduced Retail alternative would meet most of the objectives of the EDZ: it would result in the adoption of a consistent framework for the City’s review and approval of new uses in the EDZ area, and would promote the development of locally and regionally accessible uses. This alternative, however, may not promote long-term economic growth, because it would not be likely to facilitate development of a mix or total volume of uses within the area of the proposed EDZ that would generate substantial new revenues for the City, especially in comparison to other alternatives and the proposed EDZ**.

The Reduced Retail alternative would be feasible, and would avoid a significant air quality impact of the proposed EDZ: under this alternative, annual operational air emissions of PM10 would be less than 15 tons per year and therefore would be less than significant. Annual operational air emissions of NOx for this alternative would also be less than those generated under the proposed EDZ, although emissions would not be less than the BAAQMD significance threshold of less than 10 tons per year.

This alternative would also generate fewer total traffic trips than the proposed EDZ, which could result in fewer or lower impacts to LOS at adjacent intersections***; however, the volume of traffic trips to the EDZ area that would be generated by this alternative would further degrade operations of freeway ramps at merge/diverge areas that are already operating at unacceptable levels, and this alternative would likely result in impacts related to spillback. Because the Reduced Retail alternative would avoid a significant impact of the proposed EDZ, this alternative was carried forward for analysis.

(** cannot find Fiscal Impact Analysis for this alternative in the EIR)

(*** cannot find Traffic Analysis for this alternative in the EIR)


Costco and the $20 an Hour Job Myth

Proponents of the addition of Costco to the Johnson Drive Economic Zone often use the argument that good, high paying retail jobs will be added to Pleasanton.

In fact, in 2015, President Barack Obama pointed to Costco as an employer paying high wages, saying pays its hourly employees $20.89 an hour on average. But according to further analysis, this figure is highly overstated.

Political analyst and commentator Paul Ogden examined the average wage levels presented on the website Glassdoor, where employees report their actual wage levels, and came to the conclusion that in reality, Costco did pay employees a little more than WalMart, but not up to the average stated above.

“The trouble with arriving at $20.89 as the average pay of hourly Costco workers is that there are a lot more employees at the lower end of the hourly pay scale than the supervisors and skilled and semi-skilled workers at the other end,” said Ogden in a February 2015 article.

“So the average wouldn’t be close to $20.89. How then to get it to $20.89? Instead of averaging all the hourly employees pay, average all the hourly positions. So even though there might be 20 stockers for every 1 hourly supervisor, their treated as 1 to 1 when calculating the average this way. The distinction, which would have a major effect in skewing Costco’s hourly pay upward, would be lost on the reporting that followed.”

While many in Pleasanton point to Costco’s ‘high’ wage levels, it appears that this is no more than good PR and fuzzy calculations. But it is a fact that the additional jobs that Costco would bring would lure current retail employees away from small businesses all around the city, leading to a shortage of qualified help for existing stores and an escalation of wage demands for those that can manage to stay in business.

To see Ogden’s entire article, click here.