Costco Wholesale has pulled plans to open a highly-anticipated location in San Diego's North County.听
Last summer, news broke that Costco Wholesale would be replacing the former Sears store within Westfield North County Mall. Costco had entered into a lease with the city of Escondido to lease the parcel for $100,000 per year. The Escondido City Council voted 5-0 at a special meeting to authorize the agreement. The arrangement gave Costco a three year grace period before they would have to begin paying rent, or when the store was complete, whichever came first. 听
Costco Wholesale has now revoked its offer to take over the former Sears building, the city of Escondido announced in a press release Tuesday morning. The agreement included a 20-year original lease with the possibility of seven five-year extensions. The city of Escondido anticipated $1.5 million in sales tax revenue from Costco during the first year of stable operation, 314 additional jobs and even more potential investment into the Westfield property.
"The [Costco] company has asked the City of Escondido to stop working on the development application submitted," announced a representative from the city. "All fees were paid by Costco, and City staff had been working on the application and was prepared to bring the project forward to the Planning Commission. Transformco鈥檚 lease rights run through 2041, and it is uncertain what their next steps are at the old Sears site."
Costco Wholesale has now revoked its offer to take over the former Sears building, the city of Escondido announced in a press release Tuesday morning. The agreement included a 20-year original lease with the possibility of seven five-year extensions. The city of Escondido anticipated $1.5 million in sales tax revenue from Costco during the first year of stable operation, 314 additional jobs and even more potential investment into the Westfield property.
"The [Costco] company has asked the City of Escondido to stop working on the development application submitted," announced a representative from the city. "All fees were paid by Costco, and City staff had been working on the application and was prepared to bring the project forward to the Planning Commission. Transformco鈥檚 lease rights run through 2041, and it is uncertain what their next steps are at the old Sears site."
Under the agreement,听Costco was required to go through a land-use approval process including environmental analysis before construction would be able to begin.听Costco also agreed to be responsible for any necessary environmental cleanup of the site of a proposed gas station on the property. 听There is no word on why Costco pulled out of the agreement.听
This is the second big-box retailer to rescind a previously-planned San Diego location in recent months. This past October, news broke that Target听would no longer open a 36,000 square-foot "urban" location on the base floor of Cisterra Development's 22-story Radian high-rise apartment tower in San Diego's East Village.
The Westfield North County mall, spanning 83 acres in Escondido, originated in the mid-1980s and is largely owned by the city of Escondido. Initially constructed as the largest enclosed mall in San Diego, it boasts 1.2 million square feet of retail space and originally housed six independent anchor stores. Since 2016, the city has received an average annual rent of $1,382,000.
Presently, the mall has filled most of its big-box spaces, with only the former Nordstrom's site and now the Sears building vacant. In 2012, Westfield completed a $56 million renovation, introducing a new three-story Target store, revamped food court, upgraded common areas and entrances, and resurfaced parking.
