Costco coming to Chicago's Medical District
Store could get $2.5 million tax break
01/12/2011 10:00 PM
It is increasingly likely that Costco — the membership-only wholesale retailer of groceries, appliances, and pretty much everything else — will open its second Chicago store next year at the south end of the Illinois Medical District.
A city council committee recommended last week that Costco should be considered for a tax break to build a store at 1440 S. Ashland Ave.
Costco means another mega retailer for the 2nd Ward, represented by Ald. Robert Fioretti, joining Target, Whole Foods and a new Trader Joe’s.
But while these national chains were built in the busy commercial area south of Columbia College, Costco would inhabit a 16-acre blighted property farther west.
Kirkland, Washington-based Costco Wholesale Corp has worked since 2007 with the Illinois Medical District and Fioretti to build a store of approximately 50,000 square feet.
Fioretti has touted Costco as a jobs creator, bringing 600 construction jobs as well as 125 full-time and part-time positions in retail and management positions.
The alderman’s office said that construction of the new store is slated to start in the spring of 2012 and finish June 2012.
Mark Jamil, the medical district’s lawyer, said Costco can fill a glaring vacancy in the eight-block stretch along Ashland Avenue, the largest concentration of medical facilities in the world.
“We’ve been enthusiastic about the project from the start,” Jamil said. “It will benefit the Medical District neighborhood and the people that work here.”
A new Costco has cleared all regulatory hurdles with the city, according to Susan Massel, spokesman for the Chicago Department of Community Development.
The only lingering issue, then, is if Costco gets a break in their property taxes.
The City Council Committee on Economic, Capital and Technology Development unanimously passed an ordinance Jan. 5 that recommended Costco be considered for a tax break. The ordinance has the support of Mayor Richard Daley and the full City Council is expected to approve it Jan. 13.
What the ordinance does is make the Cook County Assessor’s Office, led by Joseph Berrios, examine if Costco should get a reduced tax assessment because the new store will revive a blighted property.
The property tax break — which the assessor’s office said is “intended to encourage areas in need of commercial development” — would save Costco an estimated $2.5 million over twelve years.
Besides the possible property tax break, Costco would not receive additional assistance from the city or county government.
Store construction is expected to cost $48.5 million and will be managed by Oak Brook-based Intrepid Properties.
Costco is the third largest retailer in the U.S. and the ninth biggest in the world. Its only current Chicago location is at Clybourn and Damen Avenues in Lincoln Park. Even in the recession, its corporate profits have gone up while revenue for traditional grocers like Jewel-Osco have gone down.