The Houston City Council has voted to approve incentives worth a little more than a million dollars for Costco to build on land in the Katy area at I-10 and the Grand Parkway. Only three members of Council voted against the deal, C.O. Bradford, Andrew Burks and Larry Green.
Costco will be provided with tax reimbursements for money spent on infrastructure like road improvements. Houston will reap millions of dollars in tax benefits over the life of the deal. The official estimate is $8 million will be generated for the city’s coffers, but some put the estimate much higher.
Because Costco will locate on land controlled by the city of Houston those who shop there will have to pay the 1% city of Houston sales tax. That tax revenue will be split between Houston and the Cimmaron Municipal Utility District which entered into an agreement with Houston more than ten years ago that allowed the two entities to share control and taxes generated in these types of deals.
The money which goes to Houston will be spent for benefit of Houston residents. The Katy area will see no future benefit beyond what goes to the Cimmaron MUD which represents a minority of people who live in the Katy area. Shoppers at Costco will be paying a tax to Houston for years to come for a store that planned to locate in the Katy area anyway.
Mayor Annise Parker sasy originally Costco planned to locate on land outside of Houston’s control. Houston would not be allowed to levy its tax at that location so the city decided to meet with Costco.
“There were two sites that they were trying to move forward on and we said we’d rather have them here,” Mayor Parker said.
“Do we want the sales taxes to go to the city of Katy or do we want the sales taxes to go to the city of Houston,” Parker said.
Parker admitted that Houston went after a deal with Costco so that the wholesale club would not locate in Katy. She says Costco did not come to Houston looking for the incentive.
“Costco has three stores here in Houston and they’ve never come to us with their hand out but when we learned they wanted to go to Katy we met with them,” said Parker.
Council members who voted against the deal questioned why the city would enter into an agreement that would only benefit people outside Houston’s city limits.