![\"Screenshot](\"https:\/\/wpdash.medianewsgroup.com\/wp-content\/uploads\/2026\/03\/let-me-start-with-42.5.jpg\")
<\/a>Screenshot of texts between developer Dwight Manley (black) and Brea Assistant City Manager Jason Killebrew (blue)<\/p>\n\u201cLet me start with the 42.5 (percent)\u201d for the city, Brea assistant city manager Jason Killebrew texted to developer Dwight Manley as the deal unfolded last year.<\/p>\n
Once council members see numbers, \u201cyou need room to negotiate,\u201d Killebrew explained. \u201cI will share our analysis from our budget team I got today next time I see you.\u201d<\/p>\n
In December \u2014 after much push-and-pull between Costco and the developer \u2014 Brea\u2019s city council accepted a 42.5% split.<\/a> The deal will give the lion\u2019s share \u2014 57.5% \u2014 of an expected $133.7 million in total sales tax revenue to Manley\u2019s company over the agreement\u2019s half-century life. In return, Manley promised to purchase the 34-acre property at 200 and 250 S. Kraemer St., which currently houses the Beckman Coulter headquarters, and to get Costco to sign a lease for that site by the end of the year.\u00a0Both those tasks, Manley said, are done.<\/p>\n Councilmember Steven Vargas, who voted with the majority 3-1\u00a0to greenlight the sales tax split,<\/a> said he did not recall more favorable percentages being shared.<\/p>\n A 42.5% cut seemed \u201cthe best deal we could expect,\u201d and logical at the time, Vargas said. But \u201cif there\u2019s a text that says settle for 42.5 from city staff, that would be problematic.\u201d<\/p>\n Text messages between Killebrew and Manley were contained in thousands of pages of documents obtained under the California Public Records Act by residents opposed to the Costco, and reviewed by the Southern California News Group.<\/p>\n \u201cWow!\u201d said resident Mark Strom at a recent council meeting. \u201cSo the City\u2019s point person helped Dwight, not the City, to negotiate a better deal\u2026.\u201d<\/p>\n \u201cThe final agreement was precisely 42.5% for the city\u2026. Dwight appreciates Jason\u2019s work, lauding him in many text messages. He said the council is \u2018smart about trusting you.\u2019\u00a0 After January\u2019s property sale (where Manley bought the former Beckman Coulter property), he wrote, \u201cThank you, Jason. Wouldn\u2019t have happened without you.\u2019<\/p>\n \u201cIt\u2019s not a stretch to say Jason seems like Dwight\u2019s employee, not the city\u2019s,\u201d continued Strom. \u201cThe two of them played this council like a fiddle, and googly eyes for Costco made it easy.\u201d Negotiations<\/p>\n Killebrew did not return calls and emails about the matter. City officials asked SCNG to send questions to Brea\u2019s spokesperson, Liz Pharis, who responded in writing.<\/p>\n The text messages between Killebrew and Manley are from an exchange in summer 2025, she said. Around that same time, talks between Manley and Costco stopped \u201cdue to all parties not agreeing on the deal points.\u201d<\/p>\n \u201cJason did share multiple, non-refined ratios, individually to council members, including higher ratios than what was ultimately approved as part of the EDA (economic development agreement),\u201d she said. \u201cThe agreement was a result of refining the numbers and negotiating terms between the property owner and Costco.\u201d<\/p>\n Scores of cities in California have used sales-tax sharing agreements to attract business<\/a>, she said. Brea has wanted to woo a Costco to town and has actively courted it, but those efforts were \u201cunfruitful.\u201d That\u2019s why the city explored other strategies, such as the economic development agreement, she said.<\/p>\n Manley said that there are missing pieces in the record.<\/p>\n The texts between him and Killebrew were \u201crelated to a deal getting done with Costco that wasn\u2019t done, and was changing, many times, based on Costco\u2019s analysis and operations teams getting comfortable with this site and the lease terms. So that text of me being okay with 50% was when a proposed lease was higher than where it landed,\u201d he said by email.<\/p>\n \u201cThe other missing part in this is the city gets a higher share in the future, which is when sales are higher due to inflation. If prices were to double over 30 years, 50% then is equal to 100% today, so the numbers you\u2019re using aren\u2019t accounting for any inflation, which means the city will collect much more than you\u2019re talking about.\u201d<\/p>\n Manley purchased the Beckman Coulter site for $140 million earlier this year, but he said that number doesn\u2019t account for \u201ccosts for loans or development.\u201d<\/p>\n \u201cThis endeavor is costing me well over $150 million, and where things ended up was not easy.\u201d<\/p>\n Manley grew up in Brea and has developed properties around the city, including much of Brea downtown.<\/p>\n The Beckman Coulter campus in the 200 block of South Kramer Boulevard in Brea, CA, on Tuesday, March 10, 2026. The site is slated to become a Costco Wholesale, per the economic development agreement between developer Dwight Manley and the city. (Photo by Jeff Gritchen, Orange County Register\/SCNG)\n<\/p>\n The Beckman Coulter campus in the 200 block of South Kramer Boulevard in Brea, CA, on Tuesday, March 10, 2026. The site is slated to become a Costco Wholesale, per the economic development agreement between developer Dwight Manley and the city. (Photo by Jeff Gritchen, Orange County Register\/SCNG)\n<\/p>\n The Beckman Coulter campus in the 200 block of South Kramer Boulevard in Brea, CA, on Tuesday, March 10, 2026. The site is slated to become a Costco Wholesale, per the economic development agreement between developer Dwight Manley and the city. (Photo by Jeff Gritchen, Orange County Register\/SCNG)\n<\/p>\n The Beckman Coulter campus in the 200 block of South Kramer Boulevard in Brea, CA, on Tuesday, March 10, 2026. The site is slated to become a Costco Wholesale, per the economic development agreement between developer Dwight Manley and the city. (Photo by Jeff Gritchen, Orange County Register\/SCNG)\n<\/p>\n The Beckman Coulter campus in the 200 block of South Kramer Boulevard in Brea, CA, on Tuesday, March 10, 2026. The site is slated to become a Costco Wholesale, per the economic development agreement between developer Dwight Manley and the city. (Photo by Jeff Gritchen, Orange County Register\/SCNG)\n<\/p>\n Show Caption<\/p>\n 1 of 5<\/p>\n The Beckman Coulter campus in the 200 block of South Kramer Boulevard in Brea, CA, on Tuesday, March 10, 2026. The site is slated to become a Costco Wholesale, per the economic development agreement between developer Dwight Manley and the city. (Photo by Jeff Gritchen, Orange County Register\/SCNG)\n<\/p>\n Expand<\/a> The bulk of the city\u2019s cut won\u2019t come for decades, with the first decades \u201cfront-loaded\u201d for Manley, critics said. And with rising inflation, money would be worth less.<\/p>\n The agreement would give Manley 100% of sales taxes collected for the first two years, then 95% for the next two years, then 90% for the next two, decreasing by 5% every two years until it hits 40% for Manley and 60% for the city in year 41.<\/p>\n The city would start getting half the sales taxes for its hungry general fund in year 30, or around 2057, assuming the Costco is up and running next year. The agreement would end in 2077, after 50 years, with no more sales taxes for the developer. The aforementioned 42.5% will be the city\u2019s average annual sales tax cut over the entire half-century term of the agreement.<\/p>\n Critics have called this a \u201cwhack-a-doodle\u201d deal. Over the first decade, Manley gets some $23 million, while the city\u2019s general fund gets about $2.3 million, according to projections. Manley has also committed to giving 5% of sales tax revenue to Brea senior programs each year through the life of the agreement. That\u2019s about $134,000 a year. Over the first 20 years, the deal pencils out to about $41.5 million for Manley, $9.4 million for the city\u2019s general fund, and $2.7 million for Brea seniors.<\/p>\n Over the half-century, Manley\u2019s share of sales tax revenue would be some $76.9 million, while the city\u2019s would be some $50.2 million, with some $6.7 million for senior programs, according to averaged projections.<\/p>\n Critic Strom, who holds an MBA from Stanford University and obtained the records, fears that Brea is taking a risk by agreeing to delay most of the money it gets until later in the deal.<\/p>\n Who expects retail to look the same in 2047, or 2057, or 2067, as it looks now? Will there even be a Costco in 40 years when it\u2019s time for the city to start collecting the bulk of those sales taxes?<\/p>\n Three of California\u2019s biggest retailers in 1996 were Robinson\u2019s-May, Sears and Kmart, which have either shrunk dramatically or gone out of business. No one expected Amazon back then, and it might be naive to expect business models to retain their current shape 30 years from now.<\/p>\n Risk?<\/p>\n Officials do not believe there\u2019s risk in the agreement\u2019s structure, especially since no upfront city funds were used, spokesperson Pharis said.<\/p>\n \u201cMoreover, the city is not currently receiving sales tax revenue from a retailer at the site of the proposed Costco, so even in a sharing scenario, it is a new, additional source of revenue,\u201d she said. Manley doesn\u2019t expect the future to look like the past any more than Strom does, and thinks that\u2019s why this agreement is a good idea.<\/p>\n \u201cDoing something like this is how long term planning takes place,\u201d he said. \u201cAnd in that landscape, smaller-sized businesses may not exist, and having a Costco for lowest pricing is a huge community benefit. Assuming Costco stays for more than 50 years, the city far surpasses the math shown with a zero analysis.\u201d<\/p>\n In the past, Brea has given large sums to Brea Mall\/Nordstrom and Target\/Regency, and the city does look decades into the future when making decisions, Manley said.<\/p>\n On the chummy text messages between Manley and Killebrew, Brea defended its assistant city manager.<\/p>\n Killebrew has worked for the city since 2020 and serves in two capacities \u2014 as assistant city manager and as community development director, Pharis said. His job is to organize, plan, coordinate and direct planning, zoning, development, environmental review, building inspection and economic activities for the city.<\/p>\n<\/a><\/p>\n<\/a><\/p>\n<\/a>Negotiations between Manley and Costco involved push and pull<\/p>\n<\/a>Negotiations between Manley and Costco involved push and pull<\/p>\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n
\nFront-loaded?
\n<\/a>Year-by-year detail on split between the developer and the city of Brea for Costco sales tax revenue split<\/p>\n<\/a><\/p>\n<\/a><\/p>\n