Dallas city leaders Wednesday approved more than $3 million in tax money handouts to lure new businesses.
In sharply divided votes, opponents complained Dallas is too easy with the economic development cash and should be using it to boost southern Dallas. The incentives Wednesday were in Uptown and North Dallas.
Costco received $3 million to lure the company's first Dallas store to a site on the Central Expressway at Churchill Way near LBJ Freeway. North Texas Costco stores are all outside the Dallas city limits, but supporters said the company has 50,000 members who live in Dallas.
"We're getting a property that has lay fallow for almost 20 years, developed and on the tax rolls, as well as we're recouping all the sales tax we're leaking to Plano," said Councilman Lee Kleinman, who represents the area around the new store site.
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The company must hire hundreds of new workers to receive the money paid installments over several years.
Councilman Philip Kingston said Costco has been seeking Dallas sites for years and would have come to the city without the grant.
"Their primary competitor has managed to make two sites within three miles of this site work, without asking for a dime," Kingston said.
Kleinman said Costco sites in the suburbs were cheaper and the company refused to build on the same Dallas site in the past without the incentive.
"That's prevented them from coming to Dallas for a long, long time," Kleinman said. "They have been looking for 10 years in Dallas for a site where they can make the math work."
Councilman Erik Wilson said there is plenty of available land in his far southern Dallas district.
"I've always said in the southern sector, grocery stores are like unicorns. We know they exist but we just haven't seen one," Wilson said.
Supporters said sales and property taxes from the North Dallas Costco site will benefit the entire city.
The City Council vote in favor of the Costco incentive was 10 to 5. The company has already applied for permits to start construction.
A closer 8 to 7 vote approved a $75,000 grant to lure advertising firm Saatchi and Saatchi to a new Uptown office building at 2021 McKinney Avenue.
One of the firm's largest clients is Toyota, which is moving its U.S. headquarters to Plano.
Kingston called the Saatchi and Saatchi grant a "waste of money." He insisted the ad firm would have chosen Uptown Dallas to satisfy the company's young, professional workers without cash from taxpayers.
"We are the insecure teenager of Texas cities if we really believe that it isn't the urban core that is drawing this tenant to this world-class building," Kingston said.
Councilwoman Carolyn King Arnold complained that both incentives should have been used in southern Dallas to reverse generations of neglect.
"It's what I call economic apartheid, segregation, and we're supporting it," Arnold said.
Dallas Economic Development officials said the firm was considering other sites outside Dallas before the incentive was arranged.
Mayor Mike Rawlings welcomed the ad company after the vote.
"We want as many Californians moving here as possible, ok, and you're going to make our city better," Rawlings said. "They're one of the best companies in the world. We're glad to have you here."
The new building where Saatchi and Saatchi is leasing space is expected to be ready this summer.