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Q&A: Costco and Menards Target Hadley Area South of Elinor

The two chains are seeking to develop the same space in Richmond Heights' Hadley Township neighborhood.

Two chains—hardware company Menards and wholesaler Costco—are seeking to develop the same space within ' Hadley Township neighborhood.

Proposal documents outline the companies' visions for the area, including projected costs and job creation. The area in question is south of Elinor Avenue and north of West Bruno Avenue.

The city in an effort to attract developers to the area that includes a number of residential houses and several piece of city-owned property. Several developers who previously proposed homeowner buyouts and subsequent projects .

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City Council is expected to review the proposals at a work session in early March, Deputy City Clerk Pat Villmer said. A work session date had not been scheduled as of Monday.

Come back Thursday for a look at the retail development proposed by Pace Properties for the Hadley Township area north of Elinor Avenue and south of Dale Avenue.

Describe the two companies seeking to develop the southern portion of the Hadley redevelopment area.

Costco is a wholesale chain that sells products including groceries, automotive and office equipment, TVs and other items at nearly 600 warehouses internationally. It sells to small- and medium-sized businesses, as well as individuals. The company began in 1983 in Seattle, WA. 

Menards is a hardware and home-improvement chain with more than 270 locations in 13 states. The company began in 1960 and is based in Eau Claire, WI.

What experience do the companies have in developing areas similar to Hadley Township?

The Costco proposal does not specifically address this issue.

Menards has developed more than 150 projects, approximately 25 percent of which have been "multi-owner site acquisitions, where assemblage challenges like those presented by the Hadley Township redevelopment have been overcome," its proposal states.

What would the proposed developments look like?

Costco has proposed a members-only warehouse club approximately 150,000 square feet in size. The development also would include 750 parking spaces and a four-island, 16-position gas station.

Menards has proposed a two-story store approximately 246,000 square feet in size. In addition, the development would include roughly 400 parking spaces and allow for the presence of three or four complementary retail businesses or restaurants at the southwest and northwest corners of the site.

How many jobs are the developments expected to create?

Costco anticipates creating between 250 and 300 full-time equivalent jobs during the construction phase of the project. It anticipates creating between 200 and 300 full- and part-time retail jobs with an "average wage in excess of $22.00/hour."

Menards anticipates creating 200 jobs, at least 50 percent of which would be full-time positions. Additionally, it expects neighboring retail businesses or restaurants would collectively create 80 jobs, approximately 25 percent of which would be full-time.

What would developers do to protect homeowners neighboring the development?

Costco has proposed the construction of a retaining wall along the eastern and northeastern portions of the site, along with landscaping.

"The Costco development is oriented towards Hanley Road and West Bruno Avenue," the company's proposal states. "In order to achieve the proper grades within the Costco site, a retaining wall is required on the eastern and northeastern portion of the site. At the highest elevation, the Costco site will be approximately 30 feet above the properties directly east of the Costco building."

A barrier ranging in height from 14 feet to 24 feet on the back side of the development—primarily along Berkley Avenue—is "integral" to the Menards plan, the company stated. An opaque screen would eliminate views of the store's back side, trash containers, loading docks and parking. It would block blowing trash and prevent light pollution. Substantial landscaping also is planned, and Berkley would remain in place to "provide extra separation between the commercial and residential uses."

Further, Menards does not operate around the clock and does not allow deliveries past 10 p.m.

Why do the businesses want to locate in Richmond Heights?

The Costco document provides numerous pieces of information about its business model without offering specific insights into its selection of Richmond Heights.

Menards said it has been analyzing the metro area for the last year with a goal of opening its first St. Louis store in early 2013. It said Richmond Heights has a thriving retail district, proximity to major highways and population density.

How do the companies intend to work with Hadley homeowners? How much money will they offer?

Costco said it would need to acquire 127 parcels of land and several city street rights-of-way to move forward with its development.

Menards said it intends to work with its partner, NAI DESCO, on engaging directly with homeowners. It would hold an open house to present project plans and answer questions before meeting with homeowners individually.

"All offers will be in excess of established fair market values and will be comparable with the purchase prices offered by the last party to attempt the assemblage of the site," the company's proposal states.

What kind of financing are the companies seeking?

Costco said its ability to move forward with the project "is contingent on being able to fill a $29 million net present value gap to be able to fully fund the project costs."

Menards will request approval of up to $24 million in reimbursement costs through the area's TIF Redevelopment Plan.

When would the stores open?

Costco said it has not yet provided a detailed project schedule because of the complex nature of the project, including property acquisitions and off-site roadway improvements.

"Once discussions have been initiated with property owners, city officials and (St. Louis) County Department of Transportation representatives, a detailed schedule for the development will be produced," the company's proposal states.

A timeline provided by Menards indicates the company is proposing to acquire property in April and May of 2013; to begin construction on June 1 of that year; and to open in the spring of 2014. The surrounding retail businesses and restaurants would be built out in the spring of 2015.

How much are the projects expected to cost?

The Costco project would cost approximately $59 million, including $18 million for land acquisition and relocation, $15 million for on-site improvements, $14 million for building costs and $5 million in professional fees and administration.

The Menards project would cost approximately $51 million, including $18 million for building, $17 for property acquisition, $7 million for site work and $3 million for demolition.

How much revenue are the projects expected to bring?

Costco is projecting $150.3 million in total sales taxes and $7.6 million in property taxes, though it provided no date or schedule.

Menards is projecting $1.68 million in annual sales tax revenue starting in 2015 and approximately $523,000 in property tax revenue starting that year. It projects $315,000 in sales taxes from adjoining retail businesses or restaurants starting in 2016 and approximately $140,000 in property taxes.

What do the companies intend to do to facilitate traffic along the Hanley Road corridor?

Both companies have presented overviews of their traffic plans. Look for descriptions of both on Patch later this week.

Nate Birt February 28, 2012 at 02:40 PM
You're very welcome! And yes, look for that summary on Thursday. I think you'll find it interesting, as well.
Brian C. February 28, 2012 at 08:15 PM
This is absurd. Regarding Costco, there's both a Wal-Mart and a Sam's Club literally one block south of here. For Menards, there's a Home Depot across the street and a Lowe's just south of it!
JOE BLOW February 29, 2012 at 10:12 PM
How does this make any sense at all ? Costco is gonna generate $150 million in taxes ? Learn to proofread the crap you recycle !!!!! How much revenue are the projects expected to bring? YOUR PATCH TRASH WORDS: Costco is projecting $150.3 million in total sales taxes and $7.6 million in property taxes, though it provided no date or schedule. Menards is projecting $1.68 million in annual sales tax revenue starting in 2015 and approximately $523,000 in property tax revenue starting that year. It projects $315,000 in sales taxes from adjoining retail businesses or restaurants starting in 2016 and approximately $140,000 in property taxes.
Nate Birt February 29, 2012 at 11:19 PM
Thanks for the constructive feedback, Joe! I'm continuing my research, but this is what I've been able to find so far. As I said in the report, Costco's proposal does not provide a timeframe for how many years it would take to generate the level of tax revenues listed.
Anthony Galli March 01, 2012 at 04:04 PM
I'm underwhelmed by either plan but the 2 story Menards is definitely the better of the two for our city. Costco's super-suburban strip mall dated styling in this proposal clashes with the character of Richmond Heights and is exactly what we should be getting away from. At least Menards incorporates some street facing restaurants and small retail into the plan.

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