CLARKSVILLE, TN (CLARKSVILLE NOW) – Attracting Costco to open one of its popular, club-based wholesale locations in Clarksville took more than the right location and demographics. It also took an incentive package. But that incentive – worth $21.5 million in sales tax revenue over 10 years – is essentially a contribution that doesn’t kick in until after Costco meets three key performance obligations.
Each year, Costco picks the best 15 markets for their next stores, with deals being offered across the world. “We’re trying to get Clarksville, Tennessee, on the list next to Tokyo, Japan, and Germany, and Europe, and Dallas and Austin,” Industrial Development Board President Josh Ward told the Montgomery County Budget Committee in a special-called meeting on Thursday. “They can hand-pick where they want to go, because everybody wants them, and with your help, we think we can get them here.”
How Costco incentive will work
The three obligations for Costco in the package are:
- Must be in business for one full year before the first incentive, then for six-month intervals thereafter for the 10 years of the incentive.
- Must generate a minimum of in $172 million in annual sales revenue.
- Must generate a minimum of $1.075 million in annual sales tax revenue.
Under the 10-year deal, Costco will receive $2.15 million per year for 10 years from Montgomery County’s share of the sales tax revenue they generate, expected at $250 million. The county will transfer that amount to the IDB, which will pass it through to Costco, according to Economic Development Council CEO Buck Dellinger.
“We are never paying them up-front. We’re always awarding their contribution after they’ve achieved” the stated minimum sales and sales tax revenues, Dellinger said…