MURRAY — The new Costco Wholesale store is scheduled to open Feb. 13 on the northwest corner of State Street and 5300 South. And Murray city officials couldn't be happier.
Meanwhile, down the road in Midvale, the old Costco store at 7036 S. 185 West will close Feb. 12. And Midvale city officials couldn't be more nervous.
When Costco leaves, it will take $637,000 in annual sales tax revenue with it — 14 percent of Midvale's yearly sales-tax intake.
"Very few stores do that kind of volume on a monthly basis," said Midvale City Manager Lee King. "Right now, there's nothing to replace that revenue in the short term.
"We don't see anything walking in today, tomorrow or six months from now and immediately taking their place."
Murray officials estimate they will receive just $500,000 a year in sales tax collections from the new Costco store, despite the fact that it will be bigger — 148,000 square feet compared to 117,000 square feet at the Midvale location. The figure is low because Murray officials are unsure whether the Midvale store's customers will now shop in Murray or travel to the Costco store in Sandy.
But after recent annexations increased Murray's population from 34,000 to 44,000, the extra cash will come in handy for Mayor Dan Snarr when he puts his annual budget together in the coming months.
New developments such as Costco and The Pointe at 53rd, renovations to several State Street businesses and Intermountain Health Care's plans to open a $400 million hospital complex by 2006 should help tax revenues keep pace.
"This is the beginning of the rebirth of Murray's downtown center at 53rd and State," Murray chief of staff D'arcy Dixon-Pignanelli said of Costco's arrival. "It means a lot of mixed-use in this entire downtown area."
In Midvale, meanwhile, the search for a replacement for Costco is on. King said the out-of-state landowners haven't had much luck yet in finding a new tenant.
"Everybody who has looked at that property has walked away from it because of the uncertainty as to when the property will be available," King said.
But even if another store does open at that location, King said it probably will not generate the same tax revenue as Costco did during its 18 years in Midvale.
In 1998, Midvale more than doubled in size through annexation and now boasts a population of 27,000. Before 1998, Costco accounted for 24 percent of the city's sales tax revenue.
But while the percentage impact is less now than it would have been, King points out Midvale now has 11,000 more residents to whom service must be provided.
"Yes, it does hurt," he said. "But we've made plans for it, and those plans are just trying to control costs in the future while not having that revenue coming in." Providing better service to customers is the main reason why the Midvale Costco store is relocating to Murray, said store manager Jeff Warner. Extra space was needed to include a gasoline service station and deli, among other things, and the Midvale store already had been expanded three times, he said.
All of the employees at the Midvale store will relocate to the Murray site, he said.
The Murray store will hold an open house Feb. 12, 6-8 p.m., prior to its 8 a.m. grand opening Feb. 13.
E-MAIL: zman@desnews.com