How 2nd Tri-Cities Costco store is helping build public schools in Washington
The Tri-Cities’ second Costco Wholesale store will generate $12.2 million for school construction in first 25 years and far more more in the decades that follow.
That may not sound like much in the realm of public construction. But it’s an important figure that will multiply many times as school districts across Washington state marry state and local funds to build elementaries, middle schools, high schools and other facilities.
That’s the magic of leasing state-owned land for commercial development, said Hilary Franz, Washington’s Commissioner of Public Lands.
Her department ironed out the 55-year land lease that allowing Costco to build a new store on 30 acres at 3125 Queensgate Drive, behind Grocery Outlet and Target in Richland.
The deal was sealed in early November and Costco broke ground immediately. It should open by early 2026.
Franz will hand the reigns to her successor, Commissioner-elect Dave Upthegrove, in January.
As she prepares to leave the office she led for eight years, she visited the Tri-Cities on Thursday to see two local DNR properties she said exemplify the agency’s focus on maximizing the commercial potential of publicly-owned land to address critical needs while bringing money to public education.
Costco is one example.
The other is a 16-acre site near Burden Boulevard and Road 76 in Pasco, near Walmart.
DNR established a land-use license with Tri-County Partners Habitat for Humanity.
The beloved nonprofit builds affordable housing for low-income residents with mostly volunteer labor. The Road 76 site could serve more than 200 homes, Franz said.
DNR oversees about 12 million acres transferred to Washington by the federal government shortly before it became a state in 1889. The trust lands are managed to generate revenue for public schools.
For much of Washington’s history, that meant extracting resources — namely timber and agriculture.
Franz, who worked in environmental land use law for 20 years, expanded its mission to market sites for industrial, commercial, even residential development in coordination with local cities and counties.
The Richland Costco is one of many high-profile stores that lease their sites from DNR.
Franz said developing unused land within urban growth boundaries supports the state’s economic and growth management goals. It puts urban sites that aren’t suited for timber or agriculture to work.
Developed, they support jobs, opportunity, expand local tax bases and shore up public school funding.
It also avoids urban sprawl.
Larger new store
The Department of Natural Resources spent more than a year negotiating a long-term land lease with Issaquah-based Costco.
Costco doesn’t publicly discuss stores in development, but its lone Tri-Cities store has long been considered burdened — too small to serve a population that now exceeds 320,000, according to a new Benton-Franklin Trends report.
The 30-acre Costco site in Richland site is part of a larger 330-acre property that once served as an orchard.
The orchard operator’s lease expired and the fruit trees were removed. DNR converted it to commercial use and began advertising it to prospective developers in 2020.
The new store will be about 20% larger than its sister in Kennewick. Its parking lot will have 1,024 spaces, 24% more than Kennewick’s 828 spots.
The project site is bordered by Kennedy Road, Truman Avenue and the future extensions of both Kingsgate and Queensgate.
The store itself will face Kingsgate across the parking lot and a Costco fuel station.
A total of seven individual properties are reserved for future neighbors.
The city of Richland authorized the $25 million building project, which is being constructed by Lydig Construction Inc. The fueling station is expected to be built by July 2025 and the store by October 2025.
The land lease sets financial terms for the first 25 years. The state and Costco will negotiate new terms in the 26th year to carry it through the remainder of the 55-year term.
The city of Richland and Costco are investing in road updates to accommodate the heavy new demand the store will bring.
Queensgate and Kingsgate both will be extended nearly 1,000 feet and will intersect in front of the store. The intersections where Duportail Street intersects with Kennedy and with Queensgate are being enlarged.
Costco will pay transportation impact fees to support the work.
This story was originally published December 6, 2024 at 5:00 AM.