Costco seeks to build new store in Pittsfield Township

The location gives Costco [NASDAQ: COST] proximity to the I-94 interchange at State Street, and it would place the store within the retail trade areas established at Ann Arbor-Saline Road and I-94, and also the emerging retail hub at Michigan Avenue, where Walmart opened in 2009.

"It's one of our main gateways into the township," Grewal said of the State Street corridor.

Grewal said Costco's real estate team - led by representatives from the Chicago office of Northwest Atlantic - has been talking to township representatives for the last few months.

The member-only warehouse store is doing a traffic study and is applying for a liquor license in the township, she said.

Store officials have not yet submitted a proposal to the planning commission, Grewal said. Rezoning will be required, she added.

The proposal will seek to build a standalone store and a gas station, Grewal said.

The proposed site is owned by local developer Jake Haas, who also owns the properties on Airport Boulevard.

Airport Boulevard will be at the western edge of the new Costco, according to plans in the works to build the new warehouse store in Pittsfield Township. The location is along Ellsworth Road west of Tyner's Furniture. Some offices on the property now would be demolished.

Melanie Maxwell | AnnArbor.com

"There is existing office space," Grewal said, which would be demolished to make way for the new store. "Jake's made arrangements to relocate them."

Costco was the 9th largest retailer in the U.S. as of summer 2009, according to reports. The Washington-based chain operates 567 locations, 414 in the U.S. It generated $71 billion in sales in 2009. Nearby locations include Green Oak Township and Livonia.

The chain had sought to build an Ann Arbor location for several years, but abandoned efforts to locate in Scio Township in 2006 after residents opposed a proposal for the Washtenaw County Road Commission to lease land for a store on its property at I-94 and Zeeb Road.

At the same time, the chain withdrew plans for further expansion into Michigan, and slowed overall expansion from an average of 25 stores per year in 2005 to an estimated 7 planned in 2010.

The location in Pittsfield Township lets the chain target an infill location that also fits the township's goals of attracting quality businesses while balancing land preservation, Grewal said.

While the store is likely to significantly boost traffic in the corridor, the township also will seek to develop non-motorized transportation in the vicinity, Grewal said. That could include bike and walking paths connected to the Lohr-Textile Greenway.

The State-Ellsworth intersection had been eyed for significant retail redevelopment in recent years, before the economy stalled local development.

Properties in Research Park, northeast of the intersection along State in the city of Ann Arbor, had been proposed for rezoning.

Also, the First Martin Corp. property at the northeast corner - most recently the closed Enzo's Restaurant - was approved by city officials for an 8,000-square-foot multi-tenant retail site.

To the west, owners of the former Pinter's Flowerland building at the northwest corner has site plans approved to build a 9,000-square-foot retail center.

On the southeast corner, the Speedway gas station is building a larger station and developer Howard Frehsee is seeking to build an adjacent 15,750-square-foot retail center retail center.

That center, Frehsee said, will include an outlot for a standalone restaurant or bank.

Those plans will be in front of the Planning Commission soon, Frehsee said, and they’ve been in the works since before the economic meltdown.

But news that Costco may be building less than a half-mile to the west is welcome, Frehsee said.

“This is a very positive thing,” he said. “It’s going to be a job creator. They’re also a first-class retailer.”

Meanwhile, the Tyner's store - formerly a Kmart - has been marketed for additional retail uses. Regional developers point to the excess parking on the property as ripe for outlot development.

Costco corporate officials have not returned calls for comment. However, new stores in other area typically have resulted in the hiring of about 150 new employees.

The hiring, the infill development and the additional tax base from the busy, well-regarded chain all make the effort by Costco to move to the Pittsfield Township location a positive move, Grewal said.

"This is a perfect example of maximizing space and doing infill development," Grewal said. "Costco ... is in line with the types of businesses we've been recruiting to increase the vitality of the State Street corridor."

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.