Retail

Costco, east Kellogg expansion could change development around the area

Construction workers prepare a site at the northeast corner of Kellogg and Webb for Costco, which purchased more than 17 acres of land that used to be part of the Beechcraft complex
Construction workers prepare a site at the northeast corner of Kellogg and Webb for Costco, which purchased more than 17 acres of land that used to be part of the Beechcraft complex The Wichita Eagle

The Costco store expected to open in east Wichita later this year will likely prove to be a regional draw for the area.

The Washington-based wholesale club operator, whose closest stores to Wichita are in the Kansas City area, likely will draw shoppers from beyond the four-county metro area, a real estate developer said.

“The addition of Costco will bring another group of shoppers to the market that would come from as far away as 100 miles,” InSite Real Estate Group partner Dan Unruh said. “I would say Costco is to wholesale club shopping as Cheesecake Factory is to restaurants. It’s one of those long, sought-after retailers that adds a whole new dimension to the marketplace.”

The store might also benefit east Wichita in another way, Unruh and other real estate officials said, serving as a magnet for additional retail development along east Kellogg as well as along Webb Road north of Kellogg.

Construction on the store is progressing, a Costco official said.

Todd Thull, vice president in the construction department at Costco, said in an e-mail to The Eagle that the company is on track open in late spring or early summer of 2015.

Construction began in mid-November on the site that’s at northeast corner of Kellogg and Webb.

The more than $20 million construction project sits on nearly 17 acres, Thull said. The project includes construction of a 150,000-square-foot store and a fuel station.

He said new Costco stores typically open with between 250 and 275 employees, about half of whom are full time and the rest part time.

It will be Costco’s third store in Kansas, Thull said.

The others are in Lenexa and Overland Park.

He said Costco plans to open up to 32 stores in its fiscal year 2015, which runs from Sept. 1 to Aug. 31.

Webb retail corridor?

In its 2015 commercial real estate forecast, NAI Martens said Costco’s entry into the market “will have a long-term impact on the Kellogg corridor.”

Tom Johnson, NAI Martens president, said in an earlier interview that the effect would likely be on land around Costo that fronts Kellogg. Johnson was traveling last week and unavailable for additional comment.

Unruh, whose most recent project includes the development of commercial parcels of land in and around Maple and Ridge in west Wichita, said he thinks additional retail development that will likely occur will be along Webb north of Kellogg and extending to 13th and Webb, where the Waterfront mixed-use development is located.

Costco would serve as the “southern anchor to that corridor,” he said.

“It’s likely you will see more fill-in retail development” on Webb between Kellogg and 13th, Unruh added.

Brad Saville, president of Landmark Commercial Real Estate, said he thinks the immediate intersection of Webb and Kellogg will see the most impact from the new Costco — once it’s clear how the expansion of Kellogg from Webb east to K-96 will look.

The city of Wichita, Kansas Turnpike Authority and the Kansas Department of Transportation plan to spend $345 million expanding east Kellogg to six lanes between Webb and K-96. That project, expected to begin in 2016, would also put Kellogg under Webb and over Greenwich and Zelta.

“Right now the intersection is an eyesore,” Saville said. “If you can look out two to three years … it’s going to be a real interesting intersection.”

He said how the intersection develops for additional retail uses could depend on the design and completion of the new road project.

“I think that the road improvements are equally important ... those road improvements, access points, turning lanes are really going to establish if those parcels are really usable,” Saville said.

Unruh agreed that planned work on the intersection will determine future development around Costco.

“I think it’s likely to slow the pace of development in the Kellogg and Webb area until ... construction is done there,” Unruh said. “It will delay it. It won’t kill it.”

Saville said the addition of Costco to the area will also help attract retailers who hadn’t previously considered Wichita as a good market for their stores.

Saville said he frequently gets phone calls from site selectors for national retailers wanting information about unique retailers operating in Wichita and where they are located within the city.

“It (Costco) is really unique,” he said, adding that the city’s other unique retailers are Cabela’s and Von Maur.

“It’s hard to think that Costco … is not going to change that intersection,” Saville said.

Reach Jerry Siebenmark at 316-268-6576 or jsiebenmark@wichitaeagle.com. Follow him on Twitter: @jsiebenmark.

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