Costco

Costco’s 75,000-square-foot “merchandise delivery operation” warehouse with 25 loading docks will sit on vacant land on the northeast corner of Elliot and Ellsworth roads in an area that’s supposed to be for high-tech firms. (City of Mesa/Submitted)

Retail giant Costco is planning a 75,000-square-foot warehouse with 25 loading docks on vacant land on the northeast corner of Elliot and Ellsworth roads.

It’s not a retail Costco store but a “merchandise delivery operation,” or MDO, where big and bulky products are staged before delivery to customers’ homes.

When customers purchase Items like refrigerators or furniture in a store or online, the company ships the product from a distribution center to a local MDO, where it is unboxed and inspected for final delivery.

An attorney for the project told the Mesa Planning and Zoning Board that the Mesa facility will serve about half of the Phoenix metro area.

It would be the first building that Costco has designed and built in Arizona to serve specifically as an MDO, she said.

P&Z Chair Jeffrey Crockett and board member Jeff Pitcher praised the retailer’s business, but they said they had issues with the warehouse’s proposed location in the heart of the Elliot Road Tech Corridor.

The city has invested millions in infrastructure to lure high-tech and manufacturing companies to the area north and south of Elliot Road between roughly Sossaman and Signal Butte roads.

North of the corridor, fiber optic cables offer businesses access to fast internet and high-voltage power lines can deliver massive power loads suitable for automation and data centers.

For those requiring access to large volumes of water, there are 30-inch water and 24-inch sewer lines along Elliot Road.

The robust utilities and road improvements in this area represent a multi-million dollar bet by the city that manufacturers or tech companies will want access to these utilities and bring high-wage jobs to Mesa.

Warehouses provide employment, but they don’t match the city’s “tech corridor” vision.

“While I love Costco and I love having them in Mesa, I am not loving the idea of having them use this space on what is the highly desirable Elliott Tech Corridor,” Crockett said.

The Costco warehouse will include office space for a local headquarters and will employ about 75 full-time employees, the attorney said.

“It’s going to be more employees than what’s usually in our typical … MDO,” Costco’s director of real estate added.

While Crockett and Pitcher had qualms about the location, warehouses are allowed in the property’s Light Industrial zoning, making the case a site plan review rather than a rezoning case.

The attorney for the applicant acknowledged that the warehouse wasn’t what the city was looking for at this location, but she said the building met all the requirements for the current zoning.

In site plan reviews, board members are not supposed to take land use in consideration, as they might in a zone change case.

“In law school, they tell us that there’s what’s called a ‘grumbling approval,’ and I’m afraid that that’s where we are because they have this by right,” Pitcher said before voting to approve the plan.

Crockett did more than grumble, though, and cast the lone “no” vote in the 5-1 approval of the site plan.

In other business, the board approved two other large projects in southeast Mesa.

In these other cases, the items passed on the consent agenda without discussion.

The board signed off on site plans for the 419-unit “Hawes Crossing MX Village 2” apartment complex on the south side of Elliott Road between Sossaman and Hawes Roads.

The complex will include a mix of “luxury” apartment styles spread across 14 three-story buildings on about 20 acres.

Three buildings fronting Elliot Road will consist of “live/work” units, which the applicant said in the projected narrative “help promote a more urban pattern along Elliott.”

The project could be the start of a significant concentration of apartments at this location, as the developer has conceptual plans for an apartment complex of roughly the same size to the east, bringing the total units to nearly 1,000.

The applicant’s narrative says that the project fills “the strong demand for luxury housing opportunities in this rapidly growing area.”

Out of all the projects Planning and Zoning signed off on earlier this month, Mesa planners may have been most excited about the Legacy Gateway Hotels, a campus of three hotels at the northwest corner of State Route 24 and Williams Field.

The 10-acre project, just north of the 320-acre Bell Bank Park sports complex, is slated to add a total of 365 hotel rooms and 7,000 square feet of retail.

All three hotels are four stories, and the brands slated for the campus are Residence in by Marriott, Home 2 Suites by Hilton and Element by Marriott.

Las Vegas-based developer Tharaldson Hospitality stated in its project the narrative that the new hotels would serve lodging demand connected with Bell Bank Park and Phoenix-Mesa Gateway Airport.

The site is also close to the 37-acre Cannon Beach surf park and entertainment district currently under construction at Power and Warner Roads and estimated for completion later this year.

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