By Tim Hunt
Challenges with potential Costco site in PleasantonUploaded: Dec 31, 2015
I will readily admit that I am somewhat confused by the Pleasanton Weekly’s reports of Costco signing a letter of intent to buy the 40-acre former Clorox site on Johnson Drive between Stoneridge Drive and Black Tie Transportation.
I understand why the city would want the sales tax that flows from the most successful warehouse retailing company in the United States. It gushes sales tax to say nothing about updated property tax over the now-razed buildings that were constructed before Proposition 13.
What I do not get is why Costco is willing to build the new store and where new customers would come from. For people living on the west side of Pleasanton and Dublin, it will be more convenient than the Danville/San Ramon or Livermore warehouses, but the Ruby Hill folks still are going to head to Livermore as likely will others on that side of town.
Pleasanton may be more convenient for the upscale residents of the Hayward hills (whoever thought I would use the words upscale and Hayward in the same sentence?) as well as Castro Valley. I think that current Costco members are shopping whichever of the two stores are convenient to whatever trips they are making (that’s my routine).
So, I struggle to see the big sales upside for Costco, but then I am neither a Costco executive nor a shareholder--merely a member.
And, I am blown away by the numbers the Weekly is reporting—22,000 Costco members. The 2010 census lists Pleasanton with 25,245 households. Presumably those numbers include multiple members (husbands and wives) within the same households, but those are amazing numbers. Even if you assume it is two members per household, that’s going on a 40-plus percent membership penetration.
That’s why Costco loves to locate in upscale communities because it is all about the total of the register ring (as a vendor explained to me). The wealthier the customer, the higher the ring on purchases that are discretionary—to say nothing of the staples. Lots of wealthy folks know how to drive a bargain and appreciate one.
The very legitimate concern from a Pleasanton viewpoint is how traffic will be managed around the warehouse. The Danville store is tucked away on its southern border so San Ramon deals with all the traffic and Danville gets the tax revenue.
Without major road improvements, the Pleasanton site is served by a two-lane frontage road that runs north from Stoneridge Drive and the freeway interchange around to I-580 and eventually the Hopyard interchange. By contrast, the Livermore store is served by two freeway interchanges that connect either to a two-lane frontage road or an arterial four-lane expressway.
It’s hard to imagine there is space to widen Johnson Drive without removing the on-street parking along Johnson across from existing businesses.
The potential traffic issues have been raised during City Council meetings already by Bill Wheeler, who owns Black Tie. The formal hearing process likely will start in February.