Costco's 400,000-SF Distribution Center Will Rise, At Last

Costco's acreage is situated in the far north end of the 410-acre park, an industrial hub being created at an Interstate 20 interchange within Dallas limits and on the periphery of Arlington. Costco's construction start is anticipated for June, around the time that Panattoni will wrap up work on the road system and utility infrastructure plus watch its first tenant, Jack-in-the-Box, move into half of a 210,000-sf spec building.

Costco's 280,000-sf first phase is to be ready to use in September 2003, Jon C. Napper, Panattoni's Dallas senior partner, tells GlobeSt.com. A time frame has not been set for the 120,000-sf second phase.

"It took a long time to get the deal done," Napper says. "However, it brings a tremendous credibility to Mountain Creek Business Park as a distribution location in the metroplex."

Costco's plans have been talked about, but were never considered a done deal until a week ago. The letter of intent was inked in early August 2001 and the property fell under contract in December. The remainder of the time was spent working out the details and getting the plan through Dallas' permitting process, a task that Napper personally steered. John Aldrich, Benton Rutledge and Terry Wirth, all of Colliers International's Dallas office, represented Costco.

Costco did not chase additional tax abatements for the project because of the park's built-in incentives of Triple Freeport, Enterprise Zone and a 90% ad valorem tax abatement from the city. Key to Costco's site decision was the proximity to Interstate 20 and its accesses east to west as well as south to Houston.

The interstate connection is driving a mixed-use plan for Mountain Creek Business Park, where 90 acres are dedicated for retail, office and hotel projects. Ultimately, a retail broker will be selected, Napper confides. For now, he's focusing hard on the market to see if another spec project might be doable in today's leasing climate, a move to complement the build-to-suit courting that Napper and every other developer around town is doing these days.