Oakland, meet Kirkland.

Costco is advancing discussions with Oakland officials to bring one of its big-box stores to the site of a former Army base near the Bay Bridge.

It will be years before a Costco warehouse and gas station could open on the 23-acre site in West Oakland, but a City Council committee is set to consider an exclusive negotiating agreement with the retail giant on Tuesday. If signed, the deal will lay out a pathway to bringing Costco’s $1.50 hot dogs and $5 rotisserie chickens to a decommissioned base that’s now controlled by city officials.

That section of the city is starved for a supermarket and economic development, proponents say. City staff project the store could generate $3 million in annual revenue for the general fund and create an estimated 400 jobs paying an average of $32 an hour, plus benefits. 

The nearest Costco outlets to Oakland are in Richmond, San Francisco’s SoMa, and San Leandro, where fans satisfy their craving for bulk goods, cheap gas, and discounted appliances. About 90,000 Oakland residents — roughly a quarter of the city’s adult population — hold Costco memberships, according to a report (opens in new tab) by city staff.

The deal under discussion essentially functions as an agreement between the city and Costco to bring one of the company’s warehouses to Oakland. The City Council’s Community and Economic Development Committee will weigh a resolution authorizing the city administrator to negotiate and execute a 24-month exclusive negotiation agreement, or ENA, with the retailer, which is based in Issaquah, Washington. Think of it as an engagement before a marriage.

The deal was first reported by the San Francisco Business Times (opens in new tab). 

Sponsored by Mayor Barbara Lee and Councilmember Carroll Fife, the motion would require Costco to pay a nonrefundable $300,000 negotiation fee, with two optional six-month extensions costing $25,000 each.

“This Exclusive Negotiation Agreement gives Oakland the opportunity to explore a transformative economic development project that could create hundreds of quality jobs, generate millions in revenue for city services, and bring new investment to the former Army base,” Lee told The Standard.

• San Francisco is booming. Why is Oakland still slumping?

• The Bay Area is launching a drone war against garbage

“There have been multiple community meetings organized under Councilmember Fife’s leadership, and this ENA will allow that engagement to continue as the city evaluates the proposal and works to ensure any future project delivers meaningful benefits for Oakland residents.”

The agreement does not approve a specific project or bind the city to a transaction; it would give both sides time to negotiate terms for a ground lease and a lease disposition and development agreement on an exclusive basis. If talks succeed, the deal will go to the full City Council for final approval.

The site at 101 Admiral Robert Toney Way, in the base’s North Gateway area, is barred from development into residential housing under federal and state restrictions tied to environmental contamination.

Costco is the nation’s third-largest retailer, with nearly $1 trillion in annual sales and 633 stores. The company has been advancing its interests in the Bay Area in recent months, getting the green light from Novato officials (opens in new tab) to build a 28-pump gas station, despite a local ban.

The Oakland proposal carries a long history. Costco and the city negotiated unsuccessfully over the same site in 2005. 

The site had previously been set aside to relocate two West Oakland recycling firms, California Waste Solutions and CASS Inc., a long-held community goal. But California Waste Solutions failed to close escrow on a 2021 agreement, and a separate deal with CASS expired, so the relocation remains unrealized despite years of effort.

City staff said public feedback on bringing in Costco during four community meetings was “overwhelmingly positive,” though residents raised concerns about traffic, local businesses, and the future of the two recycling firms.

Neither Costco nor Deca Companies, a San Francisco-based company reportedly taking a partnership role in connection with the potential development, responded to requests for comment.