The City Council has signed off on a multi-page independent analysis of the impacts of building a 148,000-square-foot Costco membership store on Johnson Drive versus allowing a strip of smaller stores up to 50,000 square feet as proposed in a voter initiative that will be on the Nov. 8 election ballot.
The report, prepared and reviewed during a public hearing Tuesday night by representatives of ESA Associates and ALH Urban & Regional Economics, firms that specialize in land-use and zoning impacts, shows minimal differences in potential impacts of proposed usages of the 40 acres on Johnson Drive that are under consideration by the city for a zoning change that would allow big box stores such as Costco.
A coalition called Citizens for Planned Growth obtained a sufficient number of signatures from registered voters in Pleasanton to place the initiative on the ballot that would restrict retail uses along Johnson Drive to footprints of less than 50,000 square feet.
The action was in response to the city's Economic Development Zone Program adopted in 2014 that would rezone 12 parcels within the 40 acres to accommodate large retail uses and hotels to increase the economic opportunities of the street. At least two hotels have expressed an interest in building there, and Costco has signed a letter of intent to buy property once occupied by a Clorox research center (now torn down) if the land is rezoned.
The ESA/ALH study shows that although the initiative proposal would generate fewer vehicle trips to the Johnson Drive area, it would result in the same significant and unavoidable near-term transportation impacts that would result from the zone program. In addition, funding of the traffic improvements would likely be more difficult due to smaller retailers who would open businesses at the site.
The initiative project would capture more market demand locally compared to a Costco store, which would have a greater regional appeal. The study shows, therefore, that the initiative project would result in substantially more impacts on local retail businesses in Pleasanton, contrary to what critics of a Costco store have been saying.
According to the study, the restricted 50,000-square-foot zoning rule would divert $5.7 million of sales from local businesses each year after the area would be built out in 2028, compared to $1.2 million of sales impacts if Costco built there.
The fiscal impact of the initiative project would be just as severe. Although it could lead to higher property values for the individual 50,000-square-foot parcels and possibly higher employment because of the number of separate retailers, Pleasanton could see reduced taxable sales than it would have from Costco sales.
The overall result, according to the study, is that the fiscal benefits with the initiative project in place would be lower than with a big-box store. The net fiscal gain for the city would be $1.9-$2.1 million a year at build-out, compared to $2.3-$2.5 million from a Costco or other big-box store.
Although interest in rezoning the Johnson Drive site has brought hundreds to Planning Commission and City Council meetings in recent months, only a few attended Tuesday's meeting, with only four addressing the council.
Three, including Costco-opposition leader Bill Wheeler whose Black Tie Transportation business is on Johnson Drive, described the ESA/ALH report as "interesting." Another said the study "has it wrong, traditional retailers can't compete" with Costco.
The full study is available on the city's website at http://www.cityofpleasantonca.gov.