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St. Louis County, Duluth to consider providing tax breaks for Costco infrastructure improvements

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DULUTH, MN -- Construction of the Northland's first Costco Wholesale store is expected to get underway this fall.

According to documents submitted to the St. Louis County Board Tuesday, the City of Duluth will consider providing $1.35 million in tax abatement financing for public infatructure improvements.

St. Louis County, meanwhile, is requested to provide up to $650,000.

The abatement would cover public infatructure improvements and associated site development costs, not the actual building.

The 160,000-square foot store is slated to be built at the intersection of West Arrowhead Road and Haines Road. The county documents state the store will have 725 parking spaces.

Dave Holappa, president of  Holappa Commercial Real Estate, said Tuesday they had "successfully reinstated a purchase agreement with the developer." Holappa said he couldn't elborate on the terms of the agreement.

Earlier this year KBJR 6 reported Costco had altered course on its plans and would not build a store in Duluth. At that time the city said it was hopeful Costco would "choose to revisit its decision."

Mayor Emily Larson issued a statement Tuesday saying projects like Costco take time.

“Together with Costco, the City of Duluth never stopped working every angle to bring this project to our region. While there are public processes yet to come at both the City and the County, we are ready to move forward, and thank Costco and our dedicated staff for continuing to work together.”

The Duluth Planning Commission gave the green light last November to start building the discount warehouse chain.

Construction is expected to be completed in the fall of 2021.

The county will hold a public hearing on the tax batement financing request on Tuesday, July 28 at 9:45 a.m. at the St. Louis County Government Service Center in Virginia.

Kevin Jacobsen

News Director

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