Costco project in Macon could receive up to $30 million in infrastructure financing
The board approved a financial agreement tied to a proposed Costco at Wesleyan Drive and New Forsyth Road, with up to $30 million in infrastructure financing under consideration.
MACON, Georgia (41NBC/WMGT)- Plans for a new Costco in Macon have taken another step forward after the Bibb County Board of Education approved a financial agreement Thursday connected to the proposed development at Wesleyan Drive and New Forsyth Road.
The agreement is part of a larger financing proposal that could provide up to $30 million for roads, traffic improvements, site preparation, and other infrastructure needed to support the project.
Documents presented to the school board identify the development as Project Anchor, a proposed Costco Wholesale membership warehouse and fuel store.
The financing plan involves Macon-Bibb County, the Macon-Bibb County Industrial Authority, and the Bibb County School District.
Why the school board is involved
The proposed Costco development would require infrastructure improvements, but according to a memorandum prepared for the school board, neither Macon-Bibb County nor the Industrial Authority has enough unrestricted funding available to pay for those improvements upfront.
Instead, the proposal calls for the Industrial Authority to issue a bond of up to $30 million to finance the work.
The county would then help cover the debt payments using revenue generated through a financial arrangement with Costco.
That arrangement involves payments in lieu of taxes, commonly known as PILOT payments.
Under the proposed structure, Costco would make agreed-upon payments instead of paying regular property taxes on project assets covered by the financing arrangement.
Because those payments would affect revenue normally associated with property taxes, the school district’s approval was needed.
The Bibb County Board of Education approved its participation in the agreement Thursday.
How the money would be divided
Under the proposed agreement, Macon-Bibb County would receive 75% of the PILOT payments, the Bibb County School District would receive 20%, and the Industrial Authority would receive 5%.
The county’s share would help pay debt associated with the infrastructure improvements. The Industrial Authority would retain its share for economic development purposes.
The school district is projected to receive approximately $1.6 million in direct PILOT revenue over 15 years.
According to the memorandum prepared for the school board, the property currently generates relatively little property tax revenue and no sales tax revenue.
The document identifies several potential financial benefits for the district, including the PILOT payments, additional sales tax collections, and increased investment in Macon-Bibb County.
The school district could also receive additional property tax revenue once the project returns to normal property taxation.
Two different financing arrangements
The documents outline two separate financing components connected to the proposed Costco development.
The first involves up to $30 million in bonds to help pay for roads, traffic improvements, site preparation and other costs associated with the project.
The second is a proposed bond estimated at $60 million that would finance the acquisition and installation of the Costco development. Unlike the infrastructure financing, this bond would be backed solely by Costco’s credit.
An accompanying financial schedule projects annual PILOT payments starting at $585,104 in the first year and declining to $467,706 in year 15.
