Costco project is back on track

Since the demise of legislation that would have taxed "big box" stores in Montana, plans for a bigger Costco store north of Kalispell are back on track, a company executive said Wednesday.

"We will go forth with our plans for the new location in Kalispell," said Doug Schutt, chief operating officer for Costco's Northern Division, based in Issaquah, Wash. "I think we plan on starting some construction by the end of the month … Our intention would be to get this location open before Christmas."

Costco's management in January suspended its plans for the 136,000-square-foot Kalispell store because of a bill sponsored by Sen. Ken Toole, D-Helena, that would tax gross receipts on "big box" stores.

That bill effectively died when it did not meet an April 4 transmittal deadline for revenue bills.

Toole had amended the bill so it would not apply to Costco, but the company's leadership still objected to it, largely because of concerns that it would set a "dangerous precedent" for other states to follow.

Toole said he intended the tax to be an incentive for so-called "box stores" to place a higher priority on employees in a state that has high poverty rates and one of the highest rates in the country for people holding more than one job.

"Really what I'm interested in trying to do is getting these businesses to pay a livable wage," Toole said in February. "If we can provide some incentive for these businesses to pay better, I think that's great."

Because Costco's entry-level job compensation is more than $22,000 a year and at least 50 percent of the employees at Costco stores are full time, those stores would be exempt from the tax. But other "big box" stores would not meet those criteria and would have been subject to a 1 percent tax on gross retail receipts between $10 million and $20 million; a 1.5 percent tax on receipts between $20 million and $30 million; and a 2 percent tax on receipts above $30 million.

Last June Costco announced its plans to build the new store next to Lowe's at the Spring Prairie Center on U.S. 93. The new store would be almost twice the size of Costco's existing 72,000-square-foot store on U.S. 2.

That U.S. 2 store will continue to operate until the new location is opened, and then the building will be sold, Schutt said.

The new store will feature a discount gas station available only to Costco members, Schutt said.