Costco Wholesale opened its doors in Gilroy for the first time
Saturday, giving the area a low-price warehouse store and the city
a major boost in tax income.
By Andrew Bollinger
Special to South Valley Newspapers
GILROY – Costco Wholesale opened its doors in Gilroy for the first time Saturday, giving the area a low-price warehouse store and the city a major boost in tax income.
As Costco executives looked on, Gilroy Mayor Tom Springer welcomed the wholesale giant to town and cut the ribbon to open the new warehouse store at 7251 Camino Arroyo, off the Pacheco Pass Highway.
A few hundred people were waiting to enter when the doors opened at 8 a.m. Within 10 minutes, the line was gone. But the number of shoppers quickly grew as what was a nearly empty parking lot at opening became mostly full less than two hours later.
The new 148,663-square-foot warehouse will employ 200 people, carry more than 3,800 low-priced bulk items and offer the variety of services – such as optometry, one-hour photo, pharmacy and tire service – which all Costcos have, said Costco Regional Vice President Jeff Abbott.
But Northern California’s newest location also has a service some other Costco locations don’t have.
“Not all of our locations have gas (stations),” he said. “This is our state-of-the-art facility.”
Some local residents have been members of the merchandising giant for years and are glad they won’t have to commute anymore to shop at the chain. Before the Gilroy location opened, Abbott said the closest wholesale warehouses were Costco’s San Jose and Salinas locations.
“I think it’s great. We’re finally getting some things in Gilroy,” said Gilroy resident Rosalie Roy, a retired sixth- and seventh-grade teacher who said she has been driving to San Jose to shop at Costco since 1988. “People will enjoy the fact that they don’t have to go to San Jose. They can do the majority of their shopping in town.”
Roy said she shops at Costco for bulk items such as detergent, orange juice, canned foods and toilet paper, but said she’ll continue to go to her local grocery store for fresh foods such as vegetables and fish. Those items would spoil before she had a chance to use them if she bought them in a large quantity at Costco, she said.
Nemat Dadrass, who owns Straw Hat Pizza in Gilroy, had been driving to San Jose every other week for the last 15 years to buy supplies for his business. He’s also happy to see a Costco in Gilroy because he said the new location will allow him to make more frequent trips.
“It’s very convenient,” he said.
Dadrass estimates that he saves as much as 10 percent by shopping at the wholesale warehouse instead of at a regular grocery store.
Springer said the new warehouse will generate approximately $750,000 in crucial sales tax revenue for the city every year – much from out-of-town pocketbooks.
“We’re not putting the tax burden on the community,” he said. “We’re not asking them for extra taxes – the folks who come to Gilroy to shop and go home are providing the sales tax that provides police, fire and paramedic service to the community. We’re letting other people’s money provide public services to Gilroy.”
The Costco warehouse is just one of many major retailers coming to the Newman Development Corp. shopping center. Others may include Lowe’s Home Improvement and a Super Wal-Mart.
New tax revenues from such stores will help pay for the city’s newly implemented paramedic program, which places highly trained paramedics on staff with fire response units. Springer said in the past the fire unit would arrive at a scene in as little as five minutes, while the paramedics have taken as long as 20 minutes in some cases.
“(The new program) means life-saving expertise will get to your home within five minutes,” Springer said. “That five-minute response is very important.”
Although Costco has already opened, roadwork is still being done. Springer said there could be a minor problem until the work is completed.
The new southbound off-ramp being installed on U.S. 101 – along with the extension of Camino Arroyo – will help solve any traffic problems, he said. Pacheco Pass has already been widened, and there will eventually be two right-turn lanes on Camino Arroyo that will allow traffic to go directly onto Highway 152 and U.S. 101 without interfering with other traffic.
“We’ll have some initial traffic concerns. We don’t see that those traffic problems will continue,” Springer said. “In fact, we expect them to disappear fairly shortly, especially when that new off-ramp is built.”
Another concern is that Costco will take away from other businesses, but Springer disagrees.
“This is a membership store.” he said. “(People) come in here with their trucks and their wagons and their trailers. They buy in bulk.”
