Costco will anchor the 45-acre CityGate complex.

ROCHESTER, NY-City, county and state have reached an agreement that clears the way for construction of the area’s first Costco store. The 150,000-square-foot warehouse club will be the anchor tenant for the Costello Group‘s $200-million CityGate, a mixed-use project that will include apartment and hotel components along with office and additional retail.

In order to make the CityGate development possible, the New York State Office of Children and Family Services has granted authority for Monroe County to move its Children’s Detention Center facility from the future Costco site to the state-owned Industry Residential Center campus in Rush, just outside the City of Rochester. A county budget impasse had threatened to stall the CDC relocation project, but on Tuesday, Monroe County Executive Maggie Brooks and Rochester Mayor Lovely Warren announced a consensus agreement.

The sticking point, according to the Rochester Democrat and Chronicle, was a move by Democratic county lawmakers to hold up bonds for county capital projects in hopes of forcing their Republican counterparts to consider an unrelated proposal. Although Republicans hold the majority, they need a two-thirds vote to authorize the borrowing. Both sides have pledged cooperation in authorizing the funds.

“Establishing Costco as the anchor tenant is a great step forward for this project and will help attract future developments and investments to the region,” says Gov. Andrew Cuomo. “This is an example of government partnering with business to bring companies and jobs to upstate New York.”

The project will be developed on 45 acres that currently is the site of the Iola Campus, a collection of long-abandoned buildings that once held a sanatorium and mental hospital.