New Costco will spark development of hundreds more acres of old Richland orchard
Costco Wholesale didn’t just open a store in Richland Friday morning.
It lit a fuse that will spark residential and commercial development at the former Chiawana Orchard in the Cityview area above the Yakima River.
Costco officials and Richland Mayor Theresa Richardson dedicated the store at 7:30 a.m. and doors opened immediately to a crowd of about 500 members waiting to be the first in store. Savvy customers began fueling up at the gas station Thursday.
Costco leases its 24-acre site at 3125 Queensgate Drive from the Washington Department of Natural Resources. DNR has hundreds more acres ready to develop in the neighborhood.
Jon Amundson, Richland’s city manager, said Costco’s arrival has sparked interest from chains looking establish a presence in the Tri-Cities, as close to Costco as possible.
Would-be developers have several options, including leasing development sites directly from Costco, or from the state.
The Costco property has roughly five spots for additional buildings. Costco intends to lease them, though it has not made any deals. It told city officials it wanted to open its $25 million store and fueling station first.
The city confirmed it has received no development plans or building permit applications for the pad sites.
DNR has another 29 acres near Costco that is available for lease for commercial development.
Beyond that, it has 225 acres for residential and neighborhood development nearby. That includes 26 acres set aside for the Richland School District and 5.5 acres for a city park.
City officials expect the state to auction the property but said they’ve been given no timeline for the process.
300 jobs, 911 update
Costco is a major win for Richland, both for jobs and new tax revenue.
The store employs 300, with wages ranging from hourly up to medical professionals. A pharmacy manager earns close to $180,000 a year, while pharmacists earn about $71 an hour in Washington.
Amundson said the city conservatively projects Costco will generate $800,000 a year through the city’s share of sales taxes and an unknown amount in leasehold taxes. The impact should top $1 million in coming years.
The money will pay Richland’s share of the $32.6 million cost to replace the Mid-Columbia’s aging 911 communications infrastructure., aka the 800 Mhz project.
Richland’s share is $825,000 per year for 10 years, money it would have had to find elsewhere in its budget or through new taxes.
Costco is leasing the site from the state for an initial term of 55 years.
Its rent payments will generate $12.2 million for the state’s school construction fund in the first 25 years. The lease calls for terms to be renegotiated at that time.
Traffic impacts
Costco generates plenty of traffic — close to 500 vehicles during peak hours, according to a traffic study. Social media is full of comments from residents vowing to avoid the area.
Carlo d’Alessandro, Richland’s public works director, advises patience. Some roads have been upgraded and more will be in the near future.
Costco completed the extensions of Queensgate and Kingsgate drives as part of the construction of the new store and fueling station.
It also widened both Truman and Kennedy and added turn lanes as well as curbs, gutters, sidewalks and streetlights.
An additional $6 million in road projects is coming next spring.
Costco itself paid about $1.5 million in traffic impact fees, a fee the city assesses on developers to cover costs associated with new traffic. The money reflects the impact of the store and its fueling station.
The Washington State Transportation Improvement Board awarded a $1.5 million grant and the Benton County Rural Capital Fund contributed $1.2 million.
The rural capital program is funded by a sales tax rebate from the state. The county has dedicated its share of the revenue to supporting economic development initiatives.
Road projects include new lanes at the Duportail/Queensgate intersection, a roundabout at Duportail/Kennedy, a roundabout at Duportail/Vintner Square driveway and a median to prevent left turns that lead to wrecks.
Separately, Costco paid about $140,000 to the city of West Richland to support update intersections at Kennedy Road/Bombing Range Road and Kennedy/Keene, which will be impacted by the new store.
West Richland intends to install a traffic signal at Kennedy/Bombing Range, and to revamp the signal at Kennedy/Keene.
Wooing Costco?
Amundson said Richland didn’t exactly woo Costco to the Queensgate area after its failed search for a site in Pasco’s Broadmoor area.
He said Costco already had decided it wanted to place its 2nd Tri-Cities store at Queensgate, previously popular with big box retailers such as Target, Walmart and Home Depot.
Costco representatives inquired about the 33-acre city shops site at Queensgate and Duportail. The shops are a sprawling complex of city offices and work space for public works, utilities, parks and garbage service, among others.
A quick assessment showed it would be cost prohibitive to replicate the shops complex elsewhere and the search continued.
“It was just a matter of making it happen,” he said.
The negotiations were shielded behind a code name, that quickly fell. In mid-2023, the Department of Natural Resources confirmed it was negotiating a deal with Costco for the orchard site. It released Costco’s offer to the Herald under the state’s public records act.
Negotiations wrapped up last fall and the contractor, Lydig Construction, broke ground in November.
This story was originally published August 8, 2025 at 5:00 AM.