Regina to provide $6.8M incentive for 2nd Costco location

Regina city council voted on Wednesday to provide Costco with a $6.78-million incentive to build a second local location in the city's Westerra area.

The funds will be taken from Regina Land Development Reserve. The city estimates the money will be paid back through property taxes within seven years.

The decision followed a contentious discussion at city council, with several councillors expressing displeasure at having to provide a monetary incentive to the private business.

Mayor Bachynski said city council learned on Wednesday that after Costco had reached a deal in principle to build the second location within the city, it cancelled the deal in favour of building at the Global Transportation Hub west of Regina.

The reason for that change, according to Coun. David Froh, was that the transportation hub — which is managed by a Crown corporation — provided much cheaper land subsidized by taxpayers. This in effect forced Regina to compete with an entity funded by the provincial government.

"If Costco is built outside of Regina, we will lose hundreds of millions of investment, and millions more in ancillary residential and commercial development," Froh said. "The lesson here is we need to avoid multiple levels of government competing for local investment."

"How we got there was a little bit unfortunate," Mayor Bachynski said in an interview with the CBC's Morning Edition Thursday. "The end result is a positive one for the city of Regina and especially the west side of Regina.

"It will provide growth for that area. It'll provide other commercial entities to develop around that anchor tenant and ultimately provide somewhere in the realm of half a million a year in tax revenue from Costco."

The mayor was also clear that the funding shouldn't be viewed as a precedent for more corporate incentives being offered by the city. 

"This is a very, very unique situation," he said. "It was not an apples-to-apples comparison in terms of land cost.

"Developers are consistently competing with each other on an even playing field with the land within the city and we do not get involved in."

City administration estimates that the second Costco location will generate around 300 new jobs, and will anchor significantly more commercial and residential development in the area.