Santa Clarita / Antelope Valley : Lancaster City Council OKs Burlington Store Lease

The city of Lancaster does not yet own the building, but already it has leased it.

The City Council on Monday approved a lease agreement with Burlington Coat Factory Warehouse of Lancaster Inc. for use of the building now housing Costco Wholesale Corp.

Costco, which recently merged with Price Club, has submitted plans to open a larger warehouse store across the street from its current location.

Lancaster plans to buy what will become the old Costco building, located in the Valley Central Shopping Center south of Lancaster Boulevard at 25th Street West, for $6.9 million.

Burlington Coat, which operates like an outlet, selling clothing and some housewares, will then lease all but about 6,000 square feet of the 126,804-square-foot building from the city. Over the life of the 21-year lease agreement, the city expects to receive $19.3 million from the warehouse store.

Besides the lease payments, Lancaster officials have estimated over the next 21 years that Burlington Coat will generate $6.4 million in sales tax revenues for the city. The warehouse store will also employ 125 people.

The city’s projections were questioned Monday night by resident and former Lancaster planning commissioner Fred Brodish.

In an angry exchange with the council, Brodish accused the city of accepting inflated sales projections from Burlington Coat at face value. He also said the discount store would lead to the demise of small retailers.

City officials, however, countered that Lancaster lacks an adequate number of apparel shops. Too many residents are buying clothing, shoes and the like outside of city limits, council members said, costing the city sales tax revenue.

“I think the Burlington deal is going to be a good deal for the city,” Mayor Arnie Rodio said.

Rodio said that the city worked hard to persuade Burlington Coat to come to Lancaster and that the sales tax revenue the store will generate will mean more services for residents.

“We’re losing a lot of tax dollars in Lancaster to Palmdale,” Rodio said.

Palmdale is home to the Antelope Valley’s only enclosed shopping mall. Besides Lancaster residents going there to shop, the city has also lost retail businesses because of the mall. Sears and J. C. Penney closed their Lancaster stores to open outlets at the mall.

Councilman George Runner said, “We’ve decided we’re going to aggressively protect our sales tax base.”

Once the city buys the Costco building, Runner said it does not intend to keep it as a long-term investment.