By Dennis Spellman, CoveringKaty.com
The Houston City Council voted to approve incentives worth a little more than a million dollars for Costco to build at I-10 and the Grand Parkway, a deal that brings Costco to Katy but takes sales taxes out of the area and into the big city next door. The proposed Katy Costco would be part of a mixed used commercial development
Costco will be provided with tax reimbursements for money spent on infrastructure like road improvements. Houston will reap millions of dollars in tax benefits over the life of the deal. The official estimate is $8 million will be generated for the city’s coffers, but some put the estimate much higher.
Because Costco will locate on land controlled by the city of Houston, those who shop there will have to pay the 1% city of Houston sales tax. The tax revenue will be split between Houston and the Cimmaron Municipal Utility District which entered into an agreement with Houston more than ten years ago that allows the two entities to share taxes generated in these types of deals.
The money which goes to Houston will be spent for the benefit of Houston. The Katy area will see no future benefit beyond what goes to the Cimmaron MUD which represents a minority of people who live in the Katy area.
Those who shop at the Katy area Costco will be paying a tax to Houston for years to come for a store that would have been located in the Katy area anyway.
Mayor Annise Parker says originally Costco planned to locate on land outside of Houston’s control in the Katy area. Houston would not have been allowed to levy its tax at those locations so the city decided to meet with Costco and encourage a switch to the current location. “There were two sites that they were trying to move forward on and we said we’d rather have them here,” Mayor Parker told Covering Katy. “Do we want the sales taxes to go to the city of Katy or do we want the sales taxes to go to the city of Houston,” Parker said. She says Costco did not come to Houston looking for the incentive. “Costco has three stores here in Houston and they’ve never come to us with their hand out but when we learned they wanted to go to Katy we met with them,” said Parker.
Only three members of Council voted against the deal, C.O. Bradford, Andrew Burks and Larry Green. They questioned why the city would enter into an agreement to build a store outside Houston’s city limits.