Costco scraps Wasilla store

STILL A CHANCE? Developer says economy, not site, is the problem and retailer likely will reconsider.

November 13, 2008 

WASILLA -- Retail giant Costco this week pulled the plug on plans to build a 154,000-square-foot store beside the Parks Highway in Wasilla.

In a letter to the city of Wasilla, Costco Real Estate Development director Kim Sanford stated only, "Costco Wholesale's Senior Management has decided not to pursue this project further."

Sanford and other company officials did not respond to calls about the decision.

Costco has been at the top of Wasilla residents' retailer wish list for years. Target, which also ranked high, opened a Wasilla store last month.

Wasilla planning director Jim Holycross said he had hoped Costco representatives would list a more substantive reason for halting the project. The retailer applied Oct. 25 for a conditional-use permit to build on property it planned to buy from Meritage Development as part of that developer's Creekside Town Square mall project.

Wasilla's Planning Commission was scheduled to review the permit Nov. 25.

The application was filed after months of work on site plans for the new store, including drilling 27 test holes to inspect soil information on the 17.53-acre site.

"As much money as they spent on the preliminary information and all they did ... it was serious enough that I thought it was going to happen," Holycross said.

While Costco remains mum on its reason for halting the project, a few things are clear. The soils study showed as much as 25 feet of fill was needed to create a stable base for the large building, including some fill that would likely have to be trucked in. And there are other issues with the site, such as an ongoing traffic problem.

Traffic at the site needs to be connected with an intersection large enough to handle the flow when the development is fully built. So far, that hasn't happened.

One plan would have bisected nearby businesses like the Windbreak Café and Six Robblees'. That plan became the focus of controversy this year after business owners complained that then-Wasilla Mayor Dianne Keller unfairly helped Meritage by pressuring nearby business owners to grant access across their property or lose the property in eminent-domain proceedings. City Councilors investigated and concluded Keller had overstepped city laws and perhaps state law in assisting the shopping mall developer.

Meritage president Jack Barrett said there were no significant problems with the site. He pointed to the national economy as the likely culprit.

"It was nothing to do with the site. It was market conditions, I believe," Barrett said. He added that he believed Costco planned to revisit the project after the New Year.

Barrett said he plans to announce more new tenants at the Meritage property soon. While the national economy has hit a shoal, Alaskans turned out in droves for grand openings of Target stores in October, signaling a strong local economy, he said.

"Alaska is really suffering from not having enough retail," Barrett said.

Find Daily News reporter Rindi White online at or call her in Wasilla at 907-352-6709.

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