Costco Ann Arbor-area store proposal: 'Scio's loss is Pittsfield's gain'
If anyone is against Costco building a store in Pittsfield Township, I haven’t found that person yet.
Reporting news that Costco is moving forward with plans to build a store on Ellsworth Road in Pittsfield Township generated a rare moment in my business reporting career: It may be the first store that’s universally welcomed to a Washtenaw County community.
A store the size of Costco - generally about 150,000 square feet - will cover a dozen or more acres, generate plenty of traffic and spur more development around it.
Yet instead of seeing those as drawbacks, it appears that Pittsfield Township officials and residents - and just about all of the greater Ann Arbor area-are throwing down one big welcome mat for the warehouse store chain.
Why do so many people welcome this store's interest in opening near Ann Arbor?
Some of those feelings may come from shoppers’ reaction to the stores. I’ve never been inside one, but their mix of bulk buys and rotating high-end products has built some unwavering customer loyalty.
Some of the reaction also seems to come from the fact that, a few years ago, this area was on the verge of landing a Costco store in Scio Township. And neighbor reaction, paired with official reaction to the rezoning request, shot the proposal down.
Then the real estate market changed amid Costco’s search for space, and the company withdrew from plans to expand in Michigan.
“But they always wanted to be in Ann Arbor,” said Tony Schmitt, a commercial real estate agent at LaKritz-Weber. “I think that says a lot for the community.”
It also says a lot for the community that, amid corporate plans to open only 7 new stores in 2010, the chain is serious about building a store in this market. Michigan, with its high unemployment, has not been a beacon for national real estate investment or expansion.
Yet even as retail development slowed in other areas of the U.S., “there’s always been a perception of Ann Arbor as being different from the rest of Michigan,” Schmitt said. “Its brand, if you will, hasn’t been as tarnished as much.”
Costco’s development team still hasn’t submitted site plans for the property, according to Pittsfield Township’s planning department.
The Pittsfield Township location may not have been an obvious choice. Today, it houses single-story office space, and it’s tucked behind the Tyner Furniture store at the corner.
But the vision of all involved for the chance to reposition the office space into top-quality retail space that’s still close to the highway also speaks to the draw that greater Ann Arbor has for this chain.
And, assuming that the store gets approvals to build, the corridor will be transformed into a high-profile retail area.
“It’s definitely a ‘C’ location,” said Schmitt. “But wherever Costco goes - especially close to a freeway - they’ll turn it into an ‘A’ location.
“That’s what they bring to the area.”
The area, in turn, still presents a very high barrier to entry to major retailers. Few properties are zoned for new big-box stores. Many sites that present rezoning opportunities haven’t made it through planning - examples beside Costco include Home Depot in Scio Township. And two larger developments in Scio, along Jackson Road, lost their traction in the downtown. Even Pittsfield Township saw tremendous resistance build against the Walmart that opened last fall.
For that reason, the two biggest signals that this proposal will work may be the infill location on an existing commercial property and the initial backing of township government.
In fact, Schmitt said, the Ellsworth location - the place that wasn’t the first choice for a Costco - may be an even better location than I-94 and Zeeb Road in Scio Township.
“Scio’s loss,” Schmitt said, “it’s Pittsfield’s gain.”
Paula Gardner is Business News Director of AnnArbor.com. Contact her at 734-623-2586 or by email. Sign up for the weekly Business Review newsletter, distributed every Thursday, here.
Comments
Scott Johnson
Wed, May 12, 2010 : 12:26 p.m.
Great article and as someone who had written to Costco about an Ann Arbor location, I am really looking forward to shopping there. It is really nice to go to a big box store and feel good about how they treat their staff. The 10 am opening is a great way to mitigate the traffic impact. Hopefully the current plan to widen State st. with corresponding changes to the Ann Arbor Airport runway will be approved and all of us who use it will be able to benefit from the increased ability to handle traffic.
Chris Gordon
Fri, May 7, 2010 : 5:28 p.m.
As a regular customer of the current Green Oak Township Costco location near Brighton, I join the many other local supporters of the planned Costco development south of Ann Arbor. I am also familiar with the additional retail development and the traffic congestion that accompany the Costco store off US-23. Consequently this and other planned Pittsfield Township projects highlighted below reinforce the need for the City of Ann Arbor, Pittsfield Township, and Washtenaw County officials to collaborate on a comprehensive roadway development policy and master plan for the area surrounding the Ann Arbor Municipal Airport. Collectively, all of the proposed projects listed below could challenge the existing boundaries of the airport and compromise the safety of the current and any future runway environments: 1. Pittsfield Township recently approved plans for a $300,000 pedestrian pathway along Lohr Road south of Ellsworth, located on the west side of the airport; http://www.annarbor.com/news/pedestrian-pathway-will-link-pittsfield-townships-west-side-to-its-central-park-land/ 2. Costco announced plans to build a 150,000 sq ft store on Ellsworth Road, between Airport Boulevard and State Street, located on the north side of the airport; 3. Washtenaw County Road Commission will be addressing the State Road Corridor Project in the next 3 years, located on the east side of the airport; http://www.heritage.com/articles/2010/04/02/heritagewest/news/doc4bb3738e94122539457425.txt 4. An easement was recently granted along State Road south of Ellsworth to accommodate the construction of a gasoline station including a storm water retention pond located near the end of the current runway, also on the east side of the airport. The recent Pittsfield Township Master Plan survey results show clear public support for the Lohr-Textile Greenway project and State/Ellsworth roadway improvements, and the planned Costco store is certainly a positive economic development for the entire area. http://pittsfield-mi.gov/masterplan_documents.html But I believe it is now more important than ever for the City of Ann Arbor to adopt comprehensive roadway and zoning policies with Pittsfield Township to ensure these and future developments are compatible with the approved Ann Arbor Municipal Airport Layout Plan to secure the viability, utility and safety of this important regional public use facility. http://www.a2gov.org/government/publicservices/fleetandfacility/Airport/Pages/default.aspx
Trouble
Thu, May 6, 2010 : 8:32 p.m.
" And, Assuming the Store gets approval to build ".... You've got to be kidding... In this economy, if Politicians Do Not approve their store... they won't be Politicians very much longer.
JE
Thu, May 6, 2010 : 6:17 p.m.
Pittsfield Twp. and the surrounding area has a Lowes, Target, Babies R Us, Walmart, Best Buy, Kohls, Borders, Sam's Club, Advance Auto Parts, Steak and Shake, Red Robin, Applebees, Joes Crab Shack and others I failed to mention all built in the last 10 years. Why not just pave it all and get it over with? je
John Q
Thu, May 6, 2010 : 4:16 p.m.
"I would argue that the tax revenue increase will be significant. When you factor in the higher assessed value of the property, and the increased assessed values of nearby businesses that will expand after changing hands, the overall impact could be huge. " Feel free to show us the math. I've run calculations on past developments and the claims of significant tax revenue simply don't pan out. Ask Pittsfield Township officials how much new revenue they expect to get from this development, even factoring in the boost you claim will happen. The numbers likely a lot smaller than most people would expect.
Edward R. Murrow's ghost
Thu, May 6, 2010 : 8:44 a.m.
Useless wrote: "The anti-development posts on almost ever annarbor.com story is amazing." I believe I'm the only poster on this article who has questioned the wisdom of building the store, so I guess that makes me "anti-development." Yet no where did I urge that the store not be built. I am urging that proper development means more than building a big box store with no accompanying changes to the area. The store and the changes should be hand-in-hand. The example of East Washtenaw is a good one. I obviously cannot speak to Paula's property value or that of anyone else who lives nearby. But I can speak to the gridlock that exists every morning, every lunch time, and every evening, as well as during the Christmas shopping season, in both directions from Carpenter Road to well past Huron Parkway. This area was zoned and developed decades ago with little thought to the resultant traffic patterns. Gridlock is the result. Pittsfield Township needs to look at East Washtenaw as a cautionary tale. Fix the problem that is at S. State/Ellsworth now AND prepare for the future BEFORE going forward with Costco.
Jay Allen
Thu, May 6, 2010 : 8:30 a.m.
Paula Gardner & Useless. Excellent posts. Could not agree more.
a2junkie
Thu, May 6, 2010 : 8:24 a.m.
It is my understanding that washtenaw has plans on fixing state street by the airport but the FAA has issues with it and will not let them widen it unless the airport runway is moved to the west some to allow this. That would relieve congestion on state street but there is alot of opposition to the plan to do this and it tied up in red tape even though most of the money would come from a federal grant.
Useless
Thu, May 6, 2010 : 8:18 a.m.
The anti-development posts on almost ever annarbor.com story is amazing. Without development, where would we get our goods and services. I am glad Pittsfield Township plans to welcome a store (who has an excellent track record as good corporate citizen) that I will shop at.
SalineDoe
Thu, May 6, 2010 : 8:17 a.m.
I would argue that the tax revenue increase will be significant. When you factor in the higher assessed value of the property, and the increased assessed values of nearby businesses that will expand after changing hands, the overall impact could be huge. Schools will also benefit from a tax increase for any local millages. The location could also help stabilize residential property values in the area since people want to buy homes near thriving commercial sectors. New restaurants will pop up (just look at all of them in Brighton next to their Costco). The impact will also be positive for the city of Ann Arbor as its land is adjacent. I don't know that it will improve things for Saline, but it can't hurt.
Paula Gardner
Thu, May 6, 2010 : 8:10 a.m.
Whodat, Not being argumentative here - I understand how people who live near greenfields feel that way - but I actually live near both Arborland and Washtenaw, and can't say that anything involving traffic or stores affect my home's value. (There are plenty of other factors affecting my home's value, after all!) I've also watched planners encouraging mixed use development, with varied results across the county. But there are many examples of how a nearby big box - with appropriate buffers, etc - doesn't kill a neighborhood and can encourage residential development.
whodat
Thu, May 6, 2010 : 7:58 a.m.
I'd say that Scio residents are winners in this one. Increased traffic and big box stores near their homes don't really do wonders for home values.
John Q
Thu, May 6, 2010 : 7:52 a.m.
Too bad some people still express the attitude that a decision to locate in one community over another represents a loss for the community that doesn't land the business. Costco and any other business is still going to employ the same number of people whether it's located in Scio or Pittsfield. While Pittsfield may see a small increase in property tax revenue, most of the tax revenue coming from Costco will benefit both communities as it flows to the county and state. Having a zero-sum attitude about economic development, pitting one community against another where there's only one "winner" is a flawed and ultimately destructive approach. Start thinking like a region and seeing that new development, when appropriately located and constructed, benefits all communities, not just one.
Edward R. Murrow's ghost
Thu, May 6, 2010 : 7:40 a.m.
Thanks, Paula. My experience is that the problem is that southbound State goes from two lanes to one at Ellsworth. In the last 15 years numerous the number of business on and near S. State south of Ellsworth has multiplied, as has the resultant traffic on State. I understand that Costco is only going to do so much. But unless there is a serious effort to solve the bottleneck that already exists at that intersection, putting a big box store anywhere nearby makes little if any sense.
SalineDoe
Thu, May 6, 2010 : 7:37 a.m.
This is fabulous news and a clear sign that this region will soon jump start itself out of the recession. Costco doesnt open its stores until 10:00 in the morning, so the store wont impact morning commutes at all. Still Im sure they will step up and work to improve the intersection so any traffic concerns are minimized. Wasnt it just last year that Pittsfield announced a new business (Systems Motion???) that is locating just down the street from the new Costco location and eventually bring in over 1000 new jobs? Sounds like this area is one of the hottest in the county right now. Congratulations to the leaders of Pittsfield Township for taking the time to recruit exciting businesses such as this. Clearly they know what it takes to redevelop and bring new life into a region that sorely needs it. Mark my word: even before Costco is opened, vacant office and commercial spaces in the immediate area will suddenly disappear, bringing a lot of new activity to the region. Want to bet that businesses arent already calling their real estate brokers to get in early? The purchase prices will only go up from this point forward.
pseudo
Thu, May 6, 2010 : 7:31 a.m.
Costco is welcome because they behave like a responsible corporate citizen unlike the Sam's Club with its less than wonderful rep. They treat their employees well, they treat their hosting municipalities with a level of respect. They tend not to have the destructive influence that Walmart has on downtown/local stores. And as a result, local politicians don't have the hassle of the protests involved. I think there are concerns about traffic and those need some serious consideration when planning entrances and exits from the property. For those things we use in bulk at our home...I'm looking forward to their arrival.
Blue Marker
Thu, May 6, 2010 : 6:44 a.m.
Pittsfiled can have it. The location Cosco wanted was not on the big Jackson blvd that could have handled the traffic. It was on Zeeb right at the freeway exit and the traffic would have been even worse than the zoo it is now. Congrats from this Scio resident!
Paula Gardner
Thu, May 6, 2010 : 6:23 a.m.
Costco is doing traffic studies right now, and I think many people expect the State/Ellsworth intersection to be a big part of the results. I always had a difficult time with the traffic islands for turnarounds a bit north on State - even going back to the ChiChi's days. It will be interesting to see how traffic flow could be improved. Though I wouldn't expect Costco to take on miles of road widening. The proposed location already is serving as commercial space, so improving traffic flow in the immediate area for the incremental gain in vehicles will be probably be the focus.
Edward R. Murrow's ghost
Thu, May 6, 2010 : 5:53 a.m.
Can't wait for the already gridlocked traffic at S. State and Ellsworth to get even worse. Unless part of this plan is a complete redesign of that intersection, including the widening of State down to Textile Road, it is a VERY bad idea.