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ISSAQUAH, WA-Olympic Property Group, a subsidiary of Pope Resources, has agreed to sell 20 acres of its 320-acre Gig Harbor North development to locally based Costco Wholesale Corp. for a new store. Transactions and negotiations are expected to be complete in late 2004 and store is slated to open in mid 2005.

Gig Harbor North is located on Borgen Boulevard. In addition to Costco, YMCA of Pierce County has signed on to acquire 11 acres at Gig Harbor North for development of an 80,000-sf, full-service branch.

The rest of Gig Harbor North will include a 17-acre business park, 45 acres of park and open space, 1,000 homes, and substantial retail development including a 10-acre “village center” that will house smaller, pedestrian-friendly retail.

Earlier this month, the Seattle City Council voted to allow school district property on Fourth Avenue South to be sold to Costco Wholesale Corp. for development of a larger warehouse. Costco first-ever storefront is located next to the school district property. Costco has said it would like to replace its 125,000-sf store there with a bigger store on the school district site.

To allow the acquisition, the city had to release a city-imposed covenant that restricted the use of the Seattle School District building on 4th Avenue South. The city’s rationale for removing the covenant is that “given the current market for industrial uses in the Duwamish area, the existing building would, at best, be used for short-term occupancy or storage space, generating very little tax revenue or jobs.”

Moreover, the city determined that in addition to Costco’s reputation for paying high wages and offering excellent benefits, a new building in the Duwamish may create as many as 100 jobs. Finally, the city expects to see increased annual revenues of $330,000 in sales tax, $11,900 in property tax, and B&O tax. Costco officials were not available for comment.

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