Costco could generate more than a million dollars in sales taxes for Ridgeland

A new Costco could give the city of Ridgeland as much as $1.3 million a year in new sales tax revenues, funds that will help keep residents and business owners’ property taxes low, said Mayor Gene McGee.

Construction has begun at the site that will be home to a new Costco Wholesale warehouse. Work on the controversial store is expected to wrap up next spring.

Some residents have been working for years to keep the store from coming in, largely because of the impact it will have on traffic and quality of life.

McGee, though, said the store will mean the city can add new trails, build new roads and repair existing ones all without having to raise taxes.

“We’ve been able to, because of our economic development strategy, to grow and provide high-quality services without increasing ad valorem taxes by recruiting high-quality businesses,” he said. “Our taxes are 20.03 mils. We and Flowood have the lowest (property taxes) in the metro area and some of the lowest in the state.”

The Costco is projected to have annual sales of approximately $100 million, which will generate $7 million in sales tax. The city will receive 18.5 percent of that, or approximately $1.3 million, McGee said.

Also, the store is expected to generate around $47,617 a year in new property taxes for the city, $77,830 in ad valorem taxes for Madison County and $127,000 in new ad valorem taxes for the Madison County School District.

“It’s a large amount of money,” McGee said. “We look to provide good, quality economic developments that allow us to provide the good quality of life we need – good police, good fire, excellent parks and multi-use trails.

“We do that and it helps the economy because people want to come here.”

The funds will come in handy as Ridgeland works to pay off new debt associated with Colony Park Boulevard.

The boulevard will run from Highland Colony Parkway to U.S. 51, where it will connect to McClellan Drive, and provide a much-needed east-west corridor for motorists.

It is being constructed by the Mississippi Department of Transportation (MDOT). Once construction is completed, MDOT will turn the road over to the city, meaning Ridgeland will be responsible for its upkeep.

Additionally, as part of its agreement with MDOT, the city spent $4.8 million in bonds, which was used to purchase right-of-way and move utilities to make way for the project.

In fiscal year 2019, the city is expected to pay more than $325,000 in bond debt service, City Clerk Paula Tierce said.

The Costco will be located on approximately 15 acres along Highland Colony Parkway, south of the Old Agency Road roundabout. It is being developed by Andrew Mattiace and H.C. Bailey and is part of the third phase of Renaissance at Colony Park.

Developers applied for and recently received a permit to clear the site and were moving dirt and construction on the roughly 150,000-square-foot store is expected to wrap up in the first quarter of 2019, McGee said previously.

Even with its financial benefits, the project is not without its detractors.

In May, six residents filed a complaint in Madison County Circuit Court asking the judge to reverse a decision by the city that would allow for the store’s remote gas station to be built across the street.

Costco officials have agreed to build the gas station on acreage across from the store on property zoned C-3 commercial.

Previously, the national wholesaler had hoped to build the gas station on its initial 15-acre site, and the city amended its zoning ordinance to allow it to happen.

The store will be located on C-2 property, which does not allow for remote gas stations.

The city amended its zoning ordinance in 2016, though, to allow gas stations to be built on C-2 properties as long as they were part of “large master planned commercial development.”

Opponents of the Costco appealed the city’s decision to the circuit court and then the Mississippi Supreme Court. And earlier this year, the high court tossed out the amendments, saying the rezoning was done specifically to benefit Costco.

Some of those same residents are now trying to block the gas station from going in across the street.

Earlier this year, six residents filed suit in Madison County Circuit Court asking a judge to overturn changes to the zoning ordinance preventing storage facilities.

Residents filing the appeal include Gerald Beard, Charles Michel, Nils Mungan, Harold Byrd, George Shepard Jr., and William Aden.

That case has been voluntarily dismissed.

And just recently, the same six appealed the city’s decision approving the site plan for the Costco gas station. Briefs in that appeal had not been filed at press time.