Development agreement approved for Costco warehouse in Tumwater

The Tumwater City Council authorized Mayor Leatta Dahlhoff to sign a development agreement with Costco Wholesale Corporation for a new warehouse on Tumwater Boulevard west of Interstate 5. 

The planned warehouse, which would replace Costco’s existing warehouse on Littlerock Road, includes a fueling station, a car wash and several out-lots for other commercial establishments. 

Tumwater Community Development Director Brad Medrud told the city council that a development agreement establishes standards, conditions, and timelines governing development of the property, as well as necessary public infrastructure. It also guarantees to the developer that regulations will remain unchanged for the duration of the agreement. 

Medrud made his remarks at a city council meeting on Monday, Nov. 2.

The scope of the 10-year agreement covers the warehouse, gas station, car wash, six phase one out-lots and a dedicated tree tract. The agreement excludes phase two components, which includes a multi-family residential project at the southern portion of the site. 

The most significant element of the agreement is the extension of Tyee Drive and construction of three roundabouts.  

Costco plans to dedicate land and extend Tyee Drive south from Tumwater Boulevard. The extension would connect to an upcoming section of Tyee Drive from Tumwater Boulevard north to Israel Road. The city would reimburse Costco for the construction costs.  

Tyee Drive and Tumwater Boulverad would intersect through a roundabout, which Medrud said likely involves a street reimbursement agreement with the property owner to the north. 

Costco also plans to dedicate right-of-way for an extension down to Prime Drive. The other two roundabouts are planned along the extension to provide better access to commercial out-lots and future residential development.  

The agreement also covers the construction of a roundabout at the Interstate-5 on-ramp and off-ramp.

As part of the agreement, Costco plans to build water and sewer mains large enough to serve its development and future developments. The city would reimburse Costco for the additional cost of expanding the capacity beyond what their project requires. 

The agreement also requires Costco to set aside a 2.56-acre forested portion of the site to meet the tree retention requirements. 

The agreement reflects the results of the project’s review under the State Environmental Policy Act. On Oct. 9, the city granted the warehouse, fueling station and car wash a mitigated determination of non-significance, which means the projects have no adverse environmental impact due to proposed mitigations. 

The development agreement is a separate process from the company’s last use application, which determines if the city approves the project. Medrud said the land use application process should move forward in the coming weeks.  

The city council held a public hearing before adopting the agreement, but received no testimony from the public.