City council approves $6.78 million grant for Regina’s second Costco development

Regina City Council approved an incentive package for a new Costco in Westerra. Mayor Bachynski on why it made sense plus an update on construction season.

Regina’s city council approved an economic incentive program of $6.78 million with developers of Costco Wholesale Canada Ltd. for plans to build a second location in the city.

The funds for the Economic Development Incentive Agreement grant will be transferred from the City of Regina’s Land Development Reserve and are expected to be paid back by the retail store within seven years.

“I want to thank city administration and council for their vision and pulling this incentive package together,” expressed Blair Forster, president of Forster Harvard Development Corp., the investment company of the future development.

“This is significant for not only our Westerra neighbourhood, but all land holdings on the west side of Regina, and I think our community as a whole.”

The warehouse chain is set to be built on Regina’s western outskirts. Lands to the east and south of the site are zoned for commercial as well as medium to low density residential developments while the site is flanked by Pinkie Road and the RM of Sherwood to the west.

Based on the success of the retail store’s east end location, Forster said the long-term goal was to always build an additional site.

“When we did the deal with Costco in Aurora on the east side of town, we were always contemplating a second store in the market,” he explained.

“Westerra being immediately across the city and having a wonderful transportation network, it made all kind of sense that would be the real estate play they would use for their second store.”

Although council voted nine to one in favour of the proposal, a heavy discussion on the decision took place throughout their meeting on Wednesday.

“The $7 million can be used to develop other areas of the city. We have heard of The Yards already. That would affect our ability to help other projects, like incentivize a grocery store downtown which is much needed,” voiced Ward 5 Coun. Sarah Turnbull.

However, with the new business development offering growth in the city’s Westerra area, Mayor Chad Bachynski said the investment would build up Regina’s economic growth for years to come.

“The overall benefits that were outlined by administration clearly demonstrated a short payback period where that land reserve money will be paid back.,” he told reporters.

“This is not an impact to the mill rate. This is not an impact to taxpayers, is from a reserve fund and ultimately leads to a lot of revenue for the city for decades to come.”

Aside from Forster, other delegates presented to council endorsing the business grant including Stu Niebergall, president and CEO of the Regina and Region Home Builder’s Association.

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“Will people drive to a destination like Costco wherever its located? Yes absolutely,” Niebergall voiced to council.

“I think the one thing that’s very important here is there should be nothing wrong with what Costco’s approach is doing here. They are making a very large investment within our city and the decision in front of you is really about whether you want that investment within our city or somewhere else.”

Referring to the possibility of developers building a Costco outside of the city, Niebergall said residential properties, businesses and other developments are most likely to follow no matter where location of the retail store is.

During the meeting, Forster mentioned developers reviewing an opportunity to build the site in the Global Transport Hub Authority (GTH), stating the land is “heavily subsidized by taxpayers” in Saskatchewan.

“I quoted the figure a third of the market value in order to stimulate that growth,” Forster said.

“We under no circumstance thought it would be used to compete with retail from the City of Regina. I think that was echoed today, [City council] didn’t want to be put in this situation to have to make this investment, but they saw the merits of it.”

Although an exact timeline of when construction can begin on the new development is unclear, Forster said he is hopeful it is reasonably soon.

“We have a binding deal with Costco contingent on this incentive plan being ratified. The only outstanding conditions are them working through their normal course of feasibility, building permit applications, those kind of things which aren’t site specific.”

The 14,800 square metre site will be located at 8701 Dewdney Avenue, which will include 1,284 parking stalls and a fuel station.

-With files from David Prisciak