By Roland Murphy for AZBEX
In its March 11 meeting, the Salt River Pima-Maricopa Indian Community Council voted 8-0 to approve two resolutions that will enable the development of a 162KSF Costco warehouse store and fuel center on Community land at Pima Road and Montecito Avenue, north of Pima and Indian School roads
The project will be one of only around 15 Costcos in the U.S. with an on-site car wash.
The retail development has been rumored for nearly a year, but due to non-disclosure agreements, it had not been publicly announced prior to the March 11 Council meeting.
Community Manager Bryan Meyers explained in his presentation the 70-acre Salt River Auto Show (also known as Scottsdale Auto Show) car dealership campus on the south side of Indian School Road is the Community’s primary tax revenue generator and is fully occupied.
A multi-parcel expansion is envisioned directly to the north, but there are difficulties in attracting tenants. The automotive industry has non-competition rules that prevent dealerships of a given brand from locating within 10 miles of an existing dealership of the brand, reducing the pool of available dealerships for the site.
Auto dealerships are still a high priority, Meyers said, adding he expects a letter of intent “within the next couple of weeks” for a new dealership, and he and his team believe Costco can further serve to enhance dealership interest.
Council had previously approved allowing other limited retail uses with high tax revenue potential on the northern site. Meyers said Costco will occupy the northern portion of the property, and the Community is still working to attract dealerships to the five remaining parcels on the southern end.
In highlighting the potential economic impacts of the planned warehouse store, Meyers said the store will generate tax revenues equivalent to four-to-five dealerships.
The retail outlet is projected to create roughly 250 jobs, with hiring preference given to Community members. A job fair is expected to take place during the development process.
Costco and community economic development representatives worked on the deal for approximately a year, Meyers said.
As of the 11th, the project was going through review with the Land Board and will come back to Council for entitlements.
Construction is expected to begin this month on supporting infrastructure for the Costco, including a truck entrance and two spine road entrances that will mirror the entrances to the Auto Show to the south.
Kimley-Horn & Associates has planned monument signage for the Costco development at Indian School and 89th Street and at Pima Road and Montecito Avenue.
Costco will lease the 21.6-acre site for a 65-year term with two possible five-year extensions. The initial term will be paid in one lump sum, with the lease rate for the renewals to be determined by market conditions when they are put in place.
The facility will use SRMPIC utilities, and Salt River Materials Group will provide materials, such as cement, sand and gravel.
The first resolution Council approved was a modification of the Salt River Auto Show operating agreement to allow retail operations other than dealerships. The second approved restrictive covenants to prevent competitive operations on Community-owned land within a two-mile radius. Existing uses and operations on previously allotted land are exempted.
After the presentations from Meyers explaining the development and Senior Legal Counsel Shane Olafson explaining the requested resolutions, Councilmember David Antone said, “I think this Community is really blessed to have these two facilities (Costco and Auto Show) in Indian Country. What I want to recognize is both the Auto Show and Costco are the first in Indian County.”
He added, “I think we need to be really proud of that because it says a lot about our Community for being stable in the business world. Outside entities come to us and are asking to build here, but I think that, as was mentioned before, the revenue generated helps fund the Community, and it benefits everybody.
“I just feel honored to be part of this because I feel at some point Salt River will be recognized for being a progressive Native American Community.
Member Michael Dallas Sr. said he was initially opposed to expanding the retail plan to other operations and wanted to retain the auto-only focus. He said he changed his mind after seeing the pandemic’s impacts on supply chains and also seeing the number of jobs associated with the announcement of Sam’s Club’s development in Tempe.
Social media, particularly Nextdoor, has been abuzz with discussion and speculation about the project. Most posters from south Scottsdale have been overwhelmingly supportive, but a smaller contingent has expressed worries about traffic impacts, particularly on Pima Road and Loop 101.
Salt River Pima-Maricopa Indian Community is the owner. Costco Wholesale Corporation is the developer. The design firm is Ware Malcomb.
