Augusta commissioners voted to spend about $1 million in sales-tax money to build an entrance and road into the property. They also committed to give Costco a majority of sales tax dollars generated by the wholesale store's sales to help pay back a $10 million loan the developers will obtain to finance site preparation costs. The loan will be paid off in a 23- to 25-year period.
"We are going to invest future dollars in a current product," said City Administrator Fred Russell.
Costco, which, like Sam's Club, sells items in bulk, specializes in helping small businesses grow, Russell said in a presentation to commissioners before the vote.
Noting that Thursday's announcement was the "best worst-kept secret" the past few days, Russell said that was because it was good for Augusta.
"And even bigger than that is the development at Riverwatch that's been on the table for awhile," he said. "A hundred acres at an intersection there at one of the biggest new roads in our community that's ripe for development."
The Costco project will create an opportunity to develop 100 acres in one of the best locations between Columbia and Atlanta, and between Atlanta and Savannah, Ga., Russell said.
"That's what the big picture is we're talking about," he said. "To do that, we had to find a store that was suitable to our economy, suitable to the things we need to get done in Augusta and a store with national presence. That was important to us. And with Costco, I think we found that kind of store."
Russell said the first question people ask is, "What about Sam's?"
"Sam's has a little bit different market, I believe, and we've talked at length about that -- the draw that Sam's has versus the draw that Costco has," he said. "Costco has a store in Atlanta. There's nothing even close beyond that."
The city expects to draw "lots of dollars out of South Carolina," the South and the East, he said.
To get Costco to Augusta required much effort on the city's part, mainly working out the public-private partnership during the past few months, Russell said.
Some companies who have expressed an interest in coming to Augusta have come with their hands out, he said.
"We've had conversations with several other people," he said. They wanted us to do everything. and they not do anything. They wanted us to put money up front, and they benefit from that. That's not a conversation I like to have with people."
The project will be developed in two phases. Phase 1 will have five retail out parcels developed by Costco, which will receive 75 percent of sales tax revenue. Phase 2 will be two large parcels beside Costco. The city will get 100 percent of sales tax generated from those businesses.
"We think this is a very good deal for Augusta," Russell said. "It is an opportunity to bring in a major retailer and a major provider of jobs."
Costco will bring 150 to 200 jobs to Augusta and an expected $135 million a year in sales.
"This is not a $10 million project. This is a $100 million project," Russell said.
Commissioner Don Grantham, who worked on the deal, said it was important to note that the city will not issue bonds.
"We're not obligating the city's good faith and credit on this project," Russell said. "We're looking at the tax dollars created by this project to pay for it. It's based on their success. If they're not successful, they suffer. We don't."
Once the financing package is approved, site preparation will begin immediately, with the hope that the store will open by November 2011, a news release from Mayor Deke Copenhaver's office says.