Costco at Napa Pipe

This is the look of the proposed 150,000-square-foot Costco store planned as part of the Napa Pipe site redevelopment.

County supervisors have delivered a stern message to the city of Napa: Agree by June 23 to provide water for Napa Pipe or the county could explore alternate water sources.

Supervisors on Tuesday voiced disappointment that the city has yet to provide a will-serve letter for Napa Pipe water. They said the county’s state-mandated housing plans and even the proposed Costco could be at risk, unless water can be found.

“At some point, we have to do something,” Supervisor Alfredo Pedroza said. “It’s time we bring this to a conclusion.”

Other supervisors agreed. City Community Development Director Rick Tooker explained the city’s efforts to protect its interests, but the Board of Supervisors wanted action on a matter it had hoped to wrap up several months ago.

“I’m exasperated,” Supervisor Diane Dillon said before she and her peers agreed that they need a resolution at their June 23 meeting.

Pedroza said an agreement between Costco and the Napa Pipe developers includes a 120-day feasibility period that will expire in about 90 days. Not having available water is a feasibility issue.

Another issue is the county’s state-mandated obligation to provide room for 180 housing units in rural areas from 2014 to 2022. Napa Pipe is the county’s key to meeting this requirement.

The state required the housing part of the county’s general plan to say that, should the city of Napa not agree to provide Napa Pipe water by June 30, the county would look at groundwater and other water sources. Supervisor Keith Caldwell said the county must comply or risk facing a lawsuit by housing advocates.

“I don’t understand the reluctance to issue a will-serve letter,” Caldwell said.

Napa Pipe is to be built on a 154-acre former industrial site along the Napa River south of Kennedy Park. It is to have up to 945 residences, a hotel, stores, offices, parks, trails and a warehouse-type store that has been announced as a Costco.

In December, the Board of Supervisors approved a 20-year development agreement giving Napa Redevelopment Partners the right to build Napa Pipe, provided it can secure water. For several years, the plan has been that the city of Napa would provide water. Voters in November authorized the city to annex the unincorporated land someday.

But the Napa Pipe project has been an intricate dance among the county, city and developer. A key issue for the city has been that Costco be built before the housing. The city has declined to issue a water will-serve letter while it’s addressed this and other matters with the developer.

Tooker told supervisors that the city understands it can’t require a private company to build a store. Should housing be built before Costco, the city wants the developer to pay the $1 million-plus annually that a county/city economic study says Costco would generate for city coffers.

The county’s agreement with Napa Redevelopment Partners allows housing to be built without Costco after two years. In return, it requires Napa Redevelopment Partners to make in-lieu payments designed to cover fire, police and other services for the project.

But those required annual payments are $214,000 for the first housing phase of the development, Tooker said. This would result in the city losing $2.5 million in revenues over the first three years, as compared to Costco being built.

In addition to providing Napa Pipe with services, the city is to agree to take on 80 percent of the county’s future state-mandated housing requirements to help protect rural agricultural land, Tooker said. It’s only with access to funds that this proposed agreement succeeds, he said.

Keith Rogal of Napa Redevelopment Partners said his company has no power to guarantee Costco will be built or stipulate when it will be open. He called the city’s proposed $1 million in-lieu payments “a very large tax.”

“I could say, ‘What’s one million dollars between friends?’ ” Rogal told supervisors. “Well, at some point it’s just too much.”

County Housing and Intergovernmental Affairs Director Larry Florin said the in-lieu payment called for in the development agreement resulted from negotiations.

All parties said they believe Costco is coming. Tooker said the chances are probably one in 1,000 that a large earthquake, a major national terrorist event or some other factor would derail the Costco plan.

“This money issue is a red-herring,” Dillon responded. “It’s a one-in-1,000 thing. If that one-in-1,000 things happens, we have worse things to worry about.”

Dillon expressed concern that a one-in-a-million worry will arise next. She mentioned the possibility of having a meeting between the Board of Supervisors and City Council to work things out.

Tooker mentioned one issue that he believes is now wrapped up. That involves the intersection of Highway 221 and Kaiser Road near Napa Pipe. Having the developer pay for building an extra left turn lane should ease predicted traffic problems there, he said.

“Is there one thing or several things, because honestly, the goal post keeps moving,” Caldwell said at one point.

Tooker didn’t see the goal posts as moving, adding the city voiced its concerns before the county approved the Napa Pipe development agreement. He saw potential for the water issue to be worked out quickly.

Supervisors at this point will settle for June 23. But that would likely require the City Council to address and resolve the water issue at its June 16 meeting.

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Napa County Reporter

Barry Eberling covers Napa County government, transportation, the environment and general assignments. He has worked for the Napa Valley Register since fall 2014 and previously worked 27 years for the Daily Republic of Fairfield.

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