Costco ends its plans for gourmet shop in Bellevue
Costco Fresh was to open this fall in Bellevue, but Chief Executive Jim Sinegal said the Issaquah-based chain of warehouse clubs, which is grappling with rising expenses, has decided to mothball the idea. Costco opened an experimental furniture and home-furnishings store in Kirkland last year and plans to open 27 warehouse clubs this year and 35 more in 2004.
"I think our focus is better placed on those items and not new concepts," Sinegal said. "We've just got more than enough things to concern ourselves with."
Costco will continue experimenting with fresh-food offerings at its warehouse stores, Sinegal said.
Costco hasn't decided what it will do with the former Kmart site at 15015 Main St. in east Bellevue, Sinegal said. The site has been vacant since Kmart closed last year as part of bankruptcy proceedings.
"Either someone else will want it, or we'll want it," Sinegal said.
The 106,000-square-foot store would have been the first Costco in Bellevue. It would have been smaller than an average Costco, which is usually about 136,000 square feet.
Costco Fresh was to focus on gourmet groceries and include a pharmacy, bakery, olive bar, deli, cafe, garden center and photo and optical departments. Products would be packaged in smaller quantities, and membership would be required.
The company signed a long-term lease in September with the property owner, Nat Franklin of Franklin-West. Franklin would not disclose the terms of the lease but said he was surprised at the change in plans.
"I was informed about this (Thursday)," Franklin said. "Costco has been forthright with me, and they came to tell me personally. Both of us will work together, though, to make this a fantastic center. We have a large number of tenants who want to be here."
Costco's application for the store still is under design review. The company has not yet contacted Bellevue planners to withdraw its application.
"Until we get an official withdrawal, we'll keep reviewing it," said Ann Rennick, an associate city planner.
While Costco Fresh may not be coming to east Bellevue, a warehouse store could be.
In October, Costco Chairman Jeff Brotman said the company was looking to add a warehouse club in Bellevue. The company has two warehouse stores on the Eastside — in Issaquah and Kirkland — and plans to open one next year in Woodinville.
A community representative said neighbors would be disappointed to not get Costco Fresh.
"This comes as news to me," said Ken Seal, a member of the East Bellevue Community Council. "But I think the community would be happy even if Costco opened one of their warehouse stores there."
Plans for the site will be discussed Tuesday at the community-council meeting.
Costco appoints two to board
SEATTLE — Costco Wholesale said yesterday that former U.S. Senator Dan Evans and philanthropist William H. Gates have been appointed to serve on the company's board of directors.
Evans, also a three-term governor of Washington state, runs a consulting firm.
Gates, a former attorney and the father of Microsoft Chairman Bill Gates, is chief executive of the Bill & Melinda Gates Foundation. Both men also are on the University of Washington's Board of Regents.
Kristina Shevory: 206-464-2039 or kshevory@seattletimes.com
Business reporter Jake Batsell contributed to this story.