HAWTHORNE : Costco Files $1-Million Claim on Loan to City

Retail giant Costco Wholesale Corp. has filed a claim against the city and the Community Redevelopment Agency of Hawthorne for nearly $1 million, saying agency officials have failed to make payments on a $5.1-million promissory note.

Under an agreement signed by a redevelopment agency official in 1987, Costco opened a store on Marine Avenue. In return, the redevelopment agency agreed to pay Costco $5.1 million with a rebate of sales and property taxes generated by the store.

According to the claim, filed May 19, neither the redevelopment agency nor the city has made payments on the note for more than three years. Costco is asking for $953,000 in back payments.

“The Costco site has been generating money and the city has been collecting the taxes but they haven’t made payments,” said Michael Greene, Costco’s attorney.

Greene estimates that Costco pays the city more than $600,000 a year in taxes.

The acting director of the redevelopment agency, Bud Cormier, said he does not know how much the city has collected from Costco or paid to the redevelopment agency, but he confirmed that the agency has not paid Costco.

“The city is in financial straits,” Cormier said.

Deputy City Atty. Kunle Aderonmu said the city has made an offer to settle the case based on what it can afford but declined to comment on the terms of the offer.