Costco Eyes a Manhattan Site But Draws Political Opponents

A plan for a Costco store in a Manhattan West Side residential project is drawing opposition from local elected officials, labor unions, and community groups, who may block the outlet from opening at a time when New York consumers could use the access to the lower prices available at the discount chain.

In bringing one of the nation's largest big-box chains to a site along the West Side Highway between West 59th and West 61st streets, Extell Development Co. faces an uphill climb. Previous efforts to open Costco stores on West 23rd Street and Tenth Avenue and on West 55th Street and Tenth Avenue in Manhattan were scrapped after being met with local opposition in 2000. The warehouse store, which sells products to members who pay an annual fee, offers cut-rate prices on everything from electronic appliances to gourmet cheese, wine, and home furnishings.

The district's City Council member, Gale Brewer, is voicing objections to the proposed store, and the chair of the council's zoning committee, Tony Avella, says he would likely oppose the plan as well. The development requires the area to be rezoned, meaning that the council, which typically defers to the affected district's representative, would have to approve the inclusion of the store.

The council has already barred Wal-Mart from opening in the city, at a cost estimated in the millions of dollars in lost sales tax revenues. Now the Costco plan is shaping up as another test of the city's hospitality — or hostility — to business at a time when Wall Street is suffering and city and state officials are warning that the city and state budgets are facing deficits in the years ahead.

Ms. Brewer said Costco raises particular concerns because it relies on bulk purchases for the majority of its business, so using a car is the most convenient way to carry goods from the store.

"I can't even imagine it," Ms. Brewer said in an interview yesterday. "I assume you need a car to go to Costco, and I thought we were promoting public transportation and bicycles and greening. Already, if you drive in that area now around rush hour you can't cross 72nd Street for 20 minutes."

Representatives from Extell discussed building a 150,000-square-foot Costco store with 2,300 parking spaces as part of a 3.3 million-square-foot residential development in Riverside South at a community board meeting Wednesday, according to the New York Observer's real estate Web log.

Costco already has a toehold in the outer boroughs, with warehouse stores in Sunset Park in Brooklyn and Long Island City in Queens. Critics claim that traffic-plagued Manhattan would be unable to handle the influx of cars created by the store.

A member of the New York State Assembly, Linda Rosenthal, who represents the district, says that her main concern is increased traffic but that she is also worried that the store could displace existing businesses.

"I don't want them to be competitors to our local stores," Ms. Rosenthal said yesterday in an interview. "I'd like an explanation of how the developer believes the Costco can be sited with minimum dislocation to small businesses and with a minimal influx of cars."

A spokesman for Extell, George Arzt, said the Costco store's design could be changed from its usual format to fit in Manhattan.

"I think if you take a look at Home Depot on 23rd Street and other stores such as Bed Bath & Beyond, you'd see they're very different than other locations," Mr. Arzt said in an interview yesterday. "Stores in urban areas tend to redesign."

Costco possesses some traits that distinguish the company from other big-box chains that have failed to enter the city, most notably Wal-Mart. While anti-Wal-Mart sentiment was driven partly by concerns about the chain's labor policies and opposition to unionization, many Costco locations employ union workers represented by the Teamsters, and the company has a reputation of paying living wages and benefits. Costco's approach could make it more tolerable to unions and the elected officials who count on their support.

The director of special projects for UFCW Local 1500, the grocery workers' union, Pat Purcell, said Costco is "clearly the lesser of evils" among warehouse chains, noting that anti-Wal-Mart groups sometimes held it up as a model big box company. Nonetheless, he warned that the store's location would displace small businesses and cause congestion in the area.

"It's less about which retailer and more about the retail model and the location being inappropriate," Mr. Purcell said in an interview yesterday. "I can't see people going for it."

Supporters of the store argue that Costco's low prices will broadly benefit the community. The chairman of the retail leasing and sales division of Prudential Douglas Elliman, Faith Hope Consolo, said the store could boost property values.

"I think it would only enhance the neighborhood," Ms. Consolo said yesterday in an interview. "There's always going to be traffic, but for what it brings — new employment, low-price products, revenue that was not there — it's worth it."