Costco mulls move to Wheaton
County officials weigh whether to pay $4 million to lure warehouse club to town
Costco, a warehouse club based in Washington state, has expressed interest in building at the long-vacant Hecht's department store at Westfield Wheaton Shopping Center in downtown Wheaton, according to county officials.
The possibility has sparked a debate among residents, businesses and county officials on the merits of whether to subsidize some of the $60 million cost of opening in the Wheaton mall.
Councilmember George Leventhal confirmed Monday that the county has tentatively offered to pay Costco $4 million to cover construction costs, and the proposal could go before the council in the next few weeks if Costco accepts the deal. He called the proposed subsidy a public investment in the private community.
"It's an attractive amenity," he said of the big-box store. "That's where a small county investment makes sense."
If the deal does succeed, Costco would draw up to 300 temporary construction jobs and 475 permanent jobs, all paying above the minimum wage, Leventhal said.
He acknowledged criticism that the county should spend its precious few dollars on attracting high-tech corporations but said there are less-educated county residents in need of work, too.
"We have to try to expand the job base in all directions," Leventhal said. "To say no to Costco may be making the perfect enemy of the good."
The store is one piece of the bigger puzzle of the town's revitalization, said Steve Silverman, the director of the county's Department of Economic Development, who is orchestrating the Costco deal.
Wheaton already has a Giant Food Store, and Safeway planners are working on a proposal for a new gourmet Safeway that would sit under a 14-story apartment complex on the corner of Georgia Avenue and Reedie Drive if approved.
But those stores would be outside the borders of the Westfield Wheaton mall, whereas Costco's presence would stabilize the mall and complement larger redevelopment plans, Silverman said.
In terms of large food retailers in the mall, "there are not that many players around," Silverman said. "They've attempted to get other department stores to come in without success, so this is a viable option right now that the County Executive [Isiah Leggett] thinks we should take."
Silverman said Costco will likely be paired with another retailer at Hecht's old location. And he stressed that Costco is not the only path the county is pursuing to help revitalize Wheaton.
Just last week, county planners launched a search for a master development team that could redevelop several county properties, public parking lots and the Washington Metropolitan Area Transit Authority bus bays in downtown Wheaton.
"To the extent that people think the only thing that's happening in Wheaton is Costco, that's inaccurate," Silverman said.
But the Costco deal still hinges on County Council approval, which Leventhal described as "on the margin."
"Councilmembers are weighing it," he said. Leventhal said they're weighing the subsidy in particular, which has become controversial among some business owners and residents.
"It would be much sweeter if the county is not being asked to kick in $4 million," Leventhal said, adding that he still thinks the pay off in new jobs is greater than the cost.
"The math is not so scary to me. I think it sounds like it'd be OK," he said.
Although some local business owners in downtown Wheaton wish the county would put the same money into their struggling businesses, Leventhal countered that every county-based business can't receive $4 million in assistance. Smaller businesses can apply for subsidies in the form of microloans, he said.
"It's a question of what is appropriate for a business," he said. "[Are they] going to supply 475 jobs?"
Other business owners were concerned the suburban-based, big-box store would isolate county residents who would likely drive into Wheaton only to shop at Costco and ignore the rest of its small businesses.
Eddie Velasquez, the owner of DeJaBel Café in downtown Wheaton, disagrees with that theory.
He said Wheaton small businesses need to find a way to attract those big-box shoppers to the smaller, independent shops.
"If we can't find a way to make them stay, then that's our fault," he said.
As for residents who already live in Wheaton, some don't see a Costco fitting into their dream of the area's revitalization.
"I just can't see it as being a centerpiece ... that's really going to revive the area," ,said resident Michael Enfield.
Still, Silverman said the deal is a smart logistical move.
"In a time when the county has lost 14,000 jobs in the last year, 475 jobs coming to Wheaton is an important benefit for the county and for the people who will have jobs," he said.
If approved, the Wheaton Costco would be the second in Montgomery County. There is currently one Costco in Gaithersburg and another in Beltsville in Prince George's County.
Staff Writer Jeanette Der Bedrosian contributed to this report.