SPANISH FORK -- To bring Costco to town, Spanish Fork is offering the wholesale giant incentives totaling millions of dollars. The incentives include waiving all city-related building, impact and connection fees, giving the store sales tax rebates for the first 18 months, paying the store's utilities for four years, and reimbursing the company $225,000 for the grading and fill work done by the city and paid for by Costco.
The city council signed off on the incentives this month.
For the first 18 months that Costco is in operation, the city will pay Costco any sales tax the city receives from Costco shoppers up to $1,025,000. Estimated utility bills will equal $1 million over the four-year period, or $250,000 per year.
Costco's end of the agreement includes building, opening and operating a store in Spanish Fork. The store will be located at the intersection of 200 East and 1000 North.
"We are very confident when Costco opens it will bring an increase in sales to Spanish Fork. We leak a lot of retail sales to other communities," said assistant city manager Seth Perrins. "Through bringing in Costco, it's one more reason for Spanish Fork residents to stay here to shop."
The city also is hopeful that bringing Costco to town will position Spanish Fork as a central place in southern Utah County, making it appealing to shoppers from surrounding communities as well as other retailers.
Spanish Fork city does believe that in the long run the incentives given to Costco will pay off. According to a study the city has conducted, it determined that incentive costs will be recovered within three years from the time Costco opens its doors.
"I think the majority of the residents of Spanish Fork are excited to have Costco come," said Spanish Fork Chamber of Commerce Director Cary Hanks. "It is a positive thing to bring revenue and help keep everyone's bills lower."
Spanish Fork has started preparing the land for the building, but no opening date has been set.