Camillus, N.Y. — Before Township 5′s developers signed Costco as an anchor tenant, the retailer first had to be convinced to come to Upstate New York.
Joe Goethe, a principal with Township 5′s developer, Cameron Group of DeWitt, first connected with a Costco executive during a conference in Seattle eight years ago. Upstate was not part of the chain’s plans.
Goethe used the chance meeting to pitch Costco not on his project, but on the region.
“Those are critical seeds to plant,” he said. “You starting working and eventually it comes to fruition.”
He said his early prodding probably didn’t have much to do with the company’s ultimate decision to come here, but it was an important connection to establish.
Costco decided on its own to take a look at Upstate several years later. By that point, the chain had most of the country’s larger markets covered.
Work on Costco’s building should begin in May and the store should open in September, according to the Cameron Group. Work on the Township 5 site began last fall, although construction hasn’t started on any buildings yet.
When finished, the $58 million development will have 500,000 square feet of retail and office space and its own apartment complex. The property is bordered by Route 5, Bennett Road and Hinsdale Road.
Cameron and Costco started seriously talking about Township 5 four or five years ago, Goethe said. He estimates the companies talked about the project well over 100 times.
Costco is one of the few big-name retailers to land in Syracuse before any other Upstate city. Cheesecake Factory, Target and Sonic Drive-In are just a few of the many brands to set up shop elsewhere first.
“It happens a lot,” Goethe said. “I don’t know. It’s kind of nice to have the first (Costco).”
Goethe said Costco initially looked at Albany and Rochester for its first Upstate sites. Developers in Rochester announced that Costco would set up shop there soon after Township 5′s plans became public last year.
The company continues to eye Albany and Buffalo.
Costco leaders liked the fact that the Syracuse market is easily drivable, said Dave Messner, vice president of real estate at Costco. The Township 5 site is close to major highways.
“We liked the site and we liked the market,” he said. “I know the Pyramid mall (Destiny USA) there does terrific.”
Costco, with its array of bulk items, also tends to do well in areas with large numbers of college students, he added.
Cameron’s sales pitch focused on the sizeable retail hole between Syracuse and Auburn, Goethe said.
Plenty of chains look first to the city’s eastern suburbs, but communities to the west match up favorably in terms of demographics like population and household income, he added.
Township 5 is also far enough from other warehouse clubs in the market like BJ’s and Sam’s Club.
“We showed them there was opportunity there,” Goethe said.
Costco looked at two other Syracuse-area sites seriously, said Jonathan Dower, leasing manager for Cameron.
Feedback from other developers actually helped tip the scales in Cameron’s favor, Dower said. Multiple sources began telling Costco it would do well at Township 5.
“It’s one thing if they hear it from us,” Dower said. “It’s another thing if they hear it from three or four unrelated third parties.”
Costco’s real estate, operations and finance executives all have to sign off on new locations, Goethe said. The chairman of the company personally approves each new store and visited Syracuse in 2012.
Cameron got the green light from Costco in a phone call two years ago. There was no party or late-night celebration.
“It was, ‘Let’s get to work,’” Goethe said. “We had a lot to do.”
The companies finalized the lease last year.
Costco was near the top of Cameron’s wish list for Township 5 early. The company’s well-known low turnover rate and generous pay and benefits were among the reasons.
Salaries start at $11 an hour, or nearly $23,000 a year, according to Costco. After five years, a full-time cashier makes an annual salary of more than $48,000.
New York’s current minimum wage is $8 an hour, or about $16,600 a year.
In addition, Costco is one of the largest retailers in the country without a presence in the Syracuse market, Goethe said. The chain was number four on the Stores magazine list of the top 100 retailers in 2013.
The company has about 650 stores, including about 460 in the U.S. That’s far fewer than rivals such as Wal-Mart, with 11,000 stores worldwide.
Shoppers in markets without a Costco often crave it. The smaller footprint, the company’s loyal fans and the good will it engenders among its employees all contribute to its coveted status and made it a major target for Township 5, Goethe said.
By Kevin Tampone | firstname.lastname@example.org The Post-Standard on March 29, 2014