Costco gas station planned for Novato Costco gas station planned for Novato

Almost five years after it was first proposed, Costco is still pursuing a long-delayed project to put a huge gasoline station at its Novato warehouse.

OAKLAND, Calif. – The city of Oakland is considering a plan that could lead to a new Costco being built in West Oakland. 

The proposal, in its early stages, calls for the big box wholesale chain to potentially open a store on the former Oakland Army Base, in the North Gateway Development area.

Last week, District 3 Councilmember Carroll Fife introduced a resolution seeking approval for the city to initiate talks and establish negotiating terms with Costco and San Francisco-based real estate investment and development firm Deca Companies aimed at a possible exclusive negotiating agreement.

Fife issued a city council agenda report on the proposed issue on Monday, which stated, “There is currently interest and opportunity for the potential development of a wholesale and retail general merchandise facility in the North Gateway development area of the former Oakland Army Base that would improve the economic conditions in the Area.” 

In a city that has historically had a culture of supporting independent and local businesses, there aren’t many large corporate chains and big box stores, especially when comparing it to the neighboring city of Emeryville, home to retail giants like IKEA and Home Depot.

The backstory:

SEE ALSO: Oakland considers a 1-year tax break for small businesses

In 2003, the federal government transferred the 22-acre North Gateway parcel to Oakland.

Through the years, discussions have emerged about redevelopment, with the former base being identified as a possible site for housing in a city that has had a need for housing solutions amid a growing homeless population.

In 2022, the city council approved a Fife-sponsored resolution to conduct a feasibility report on a possible homeless shelter that would house roughly 1,000 people on the North Gateway parcel.

But the city would oppose the homeless shelter plan, pointing to costs, environmental concerns as well as a potential conflict with two major recyclers, California Waste Solutions and CASS, Inc, with planned facilities at the site. 

“Due to environmental, regulatory, contractual and other constraints staff does not recommend use of the North Gateway for a homeless intervention site,” the city stated, also noting, “Operating costs to serve 1000 people in cabins would be approximately $22.5 Million.”

Addressing housing challenges on the base

As part of the Costco proposal, Fife, an outspoken advocate for affordable housing and tenant protections, addressed the hurdles and roadblocks involved in efforts to create housing on the North Gateway site. 

“The site is subject to deed restrictions that prohibit any residential housing unless a waiver is obtained from the Department of Toxic Substances Control (DTSC) and extensive toxics mitigation is completed,” the councilmember’s report said, adding, “The crisis of homelessness is immediate and because of the time it would take to prepare this site for human use, experts have argued that it is neither timely, nor financially or administratively feasible for the City to secure a DTSC waiver and conduct the necessary site mitigation.”   

Other considerations

Fife’s office also said that the development would not disrupt plans for UCSF Benioff Children’s Hospital Oakland to build a temporary helipad on 8.4-acres of the North Gateway property.

“The City finds that exploring longer term uses for the parcel will not conflict with this agreement,” the report stated.

The councilmember’s office said that Costco has been seeking to establish a store in Oakland, “specifically at the former Army Base,” since the early 2000s.

The agenda report said that Deca has led major projects across California including the redevelopment of the Cow Palace in Daly City. 

“Deca has approached the District 3 Council Office expressing an interest in leveraging their experience to help bring Costco to Oakland,” the agenda report said.

KTVU reached out to Deca for comment but did not receive a response by the time this story was published.

Costco replied to our request for a statement by saying, “We cannot comment on locations that will be opening more than three months from today.”

Costco has stores across the Bay Area, including nearby East Bay locations in Richmond, San Leandro and Hayward.

‘Important step’

The proposal for a possible Costco in Oakland, Fife’s office stressed, was in the preliminary stages. 

Still, the agenda report said the resolution was an “important step to spur much needed economic activity in West Oakland and has the potential to bring wholesale retail and groceries to underserved residents who currently have to drive long distances for their needs.”

The report went on to say the area lacked access to affordable and high-quality food options for residents in the neighborhood, and a Costco could help address that problem. 

“Much of West Oakland is currently designated as a food desert by the United States Department of Agriculture (USDA),” Fife’s office said, adding, “A Costco Warehouse located at the North Gateway parcel can help fill the gap for affordable groceries and essentials for our impacted communities while creating hundreds of jobs with competitive wages, which in turn will help localize spending.”

Fife also said that for the city itself, Costco would generate substantial annual tax revenue. 

The proposal has been scheduled to be discussed before the Community and Economic Development Committee on Dec. 9.  

Fife’s office said that if the committee approves the city administration to start talks for a potential negotiating agreement, the resolution will then need to go before the city council for approval, before moving forward to try and reach an exclusive negotiating agreement with Costco and Deca.

OaklandBusinessNewsInstanews