Pleasanton planners moved a step closer last week to creating the city's first Economic Development Zone along Interstate 680's Johnson Drive frontage road that could offer up to 35 acres of space suitable for a new hotel or, possibly, a new Costco retail store.
Costco, long rumored as interested in the site, was mentioned during a public hearing by the city's Planning Commission even though the wholesale membership-only retailer has never said publicly that it might build here.
Gerry Beaudin, director of community development and head of the city planning department, said the city does not have a permit application at this time from Costco.
Even so, it's no secret that Costco representatives have expressed an interest in the site, previously dominated by a multistory Clorox Company office building that was torn down after the company moved into a six-building campus nearby. Much of the land around it also has been cleared in anticipation of a bid by a major hotel or retailer to develop the site, which includes properties from 7106 to 7315 Johnson Drive and 7035 and 7080 Commerce Circle.
In a staff report to the commission, associate planner Eric Luchini said the proposed Economic Development Zone "would designate opportunity sites that could be redeveloped with uses that would add value to the properties."
Throughout the public hearing, speakers referred to Costco as a potential developer of the site, claims that were not refuted by planning commissioners or Luchini.
Key obstacles to a Costco store at that location, or a large hotel, are the two-lane Johnson Drive that is already crowded with traffic from businesses on Johnson Drive, including ClubSport Pleasanton, Valley Bible Church and the DoubleTree by Hilton Hotel and Federal Express.
Bill Wheeler, president and CEO at Black Tie Transportation, whose large inventory of limousines occupies a facility at 7080 Commerce Drive, a block east of Johnson Drive, told commissioners that his business already is severely impacted by traffic on Johnson and that more would cause unacceptable delays to the service he offers customers.
To cope with traffic concerns, Luchini said that a portion of the Park and Ride lot at Johnson and Stoneridge drives would be cut back and the two 90-degree curves eliminated. Johnson would be widened to four lanes to the ClubSport entrance and the I-680 ramps would be widened to accommodate increased traffic. Customers of a large retailer on the new Economic Development Zone site could use both the I-680/Stoneridge Drive access lanes or those farther east at I-580 and Hopyard Road.
Besides the potential uses of the new economic zone site by a hotel or large retailer such as Costco, city planner Adam Weinstein said other uses with full build-out could include other retail establishments and continued recreational uses, such as ClubSport. Existing uses in the project area would be "grandfathered" and could continue operating until redevelopment activities are proposed for specific parcels.
Fed Ex would not be affected by the new economic zone, although Weinstein said it could build a multistory building on its site if additional space is needed.
With development, the project area could contain up to 509,990 square feet of occupied building space, a net increase of 285,302 square feet over what's there now. Costco stores range in size from 73,000 to 205,000 square feet with the average size of 143,000 square feet.
Another key obstacle for Costco or any similarly large development will be the cost of site improvement, which could be in the millions of dollars.
City Manager Nelson Fialho said no taxpayer funds would be used to develop the site. Costco has initially resisted funding improvements beyond its own property and Caltrans has not committed any funds to improving freeway access. Still, all of those issues "are negotiable," according to developers, who acknowledged that a Costco warehouse store could provide huge sales taxes for Pleasanton.
Ultimately, the project with a retail store such as Costco would cost $50 million including at least $10 million for improvements to Johnson Drive and access lanes on I-680.
Costco, which has warehouse stores in Livermore and Danville, operates 671 warehouses with 474 locations in the U.S.
An Environmental Impact Report for the Johnson Drive Economic Development Zone is now available for public review at the Pleasanton Civic Center with public comments due by Oct. 30.
It's expected that no commitments will be made by potential developers of the site until after the EIR is approved by both the Planning Commission and City Council early next year.