To the chagrin of residents, parents and students who have protested a new Costco, the wholesale retailer may be coming soon to the Westgate West shopping center.
The San Jose Planning Commission is recommending the City Council approve Costco’s new location, three years after the big-box store announced its plans to expand.
Costco plans to invest an estimated $60 million in the project, which envisions tearing down three existing buildings at the struggling mall and replacing them with a 40-foot-tall, 165,148-square-foot store with rooftop parking.
Along with adding 250 to 300 jobs at an average hourly rate of $29 per hour, city officials see the project as an economic boon. The Costco store will provide $2 million in annual sales tax revenue on top of utility and property taxes, which will benefit the city of San Jose, Santa Clara County, and Prospect High School.
“The issue is that the city needs to build an economic base to pay for city employees and to provide city services,” Commissioner Pierluigi Oliverio said. “We take actions on this dais in a consistent manner to approve thousands of units of low-income housing that pay zero property tax. Zero. We add residents that demand services, but we have no way to pay for them and the only way to make up for that is when we have a chance where there’s a commercial development that brings revenue to the city.”
If approved, this would make the new location the big-box retailer’s sixth store in San Jose. It currently operates four warehouse stores and one business center throughout the city. Costco expects the project to take 21 months to build, according to documents submitted to the city.
Residents have seen the addition of a Costco at the Westgate West mall, which sits on the border of San Jose and Saratoga, as a hot-button issue for years — evidenced by the 30-plus meetings held about the project — due to its close proximity to schools and neighborhoods and the expected increase in noise and traffic along two major arterials: Lawrence Expressway and Prospect Avenue.
“You’ve been hearing these reasons from us for three years, getting repeated offers to sit down and discuss possible mitigations,” said resident Marc Pawliger, who noted that nearly 4,700 people signed a petition opposing the project. “We’ve been rebuffed every time. And even after three years of asking for the city to be an advocate and solve these issues, the project is still unsafe and still inappropriate.”
The potential impacts from the project also have prompted Saratoga city officials and school advocates to chime in, asking San Jose to include more mitigation measures.
“The location is inappropriate,” said Julie Reynolds-Grabbe, president of the Prospect High School PTSA. “It’s less than 50 feet from long-established homes close to several parks, across from assisted living centers, a thousand feet from a high school, a thousand feet from an elementary school and it will bring four million extra car trips per year to an area already played by congestion and frequent injury accidents.”
The city’s traffic engineers, however, said that Costco’s changes to its initial plans have adequately addressed impacts and noted that the major thoroughfares could still handle the added workload.
Senior transportation specialist Manjit Banwait said that although the addition of Costco could increase daily trips on local streets by 11,000, Lawrence Expressway could absorb the impact because the street can accommodate 50,000-55,000 daily trips.
Lynette Dias, the president of Urban Planning Partners, said Costco has also committed to limiting traffic moving through residential neighborhoods by closing off some of the driveways on Graves Avenue and preventing delivery trucks from using the street altogether.
Costco has also pledged $1 million in intersection improvements at Lawrence Expressway and Prospect Avenue.
The only remaining step for Costco is to gain City Council approval next month, where the council must find an overriding public benefit of the project.
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While some residents oppose Costco’s proposed building, some local business owners like Michelle Bernard, who has operated Bikram Yoga San Jose in the Westgate West mall for the past 22 years, welcomed the change because vacancies have limited growth.
Costco’s proposed location has served as a commercial shopping center for more than 50 years but has recently seen several large tenants like Orchard Supply Hardware, Ethan Allen, Smart & Final, and CVS leave.
“Satisfying these needs is what growth is, and that growth comes with consequences, either traffic on one hand or skyrocketing property values,” said resident Murthy Namali, who lives next to the proposed Costco and supports the project.
