Costco marks its debut in Mendocino County with Ukiah store

Hundreds of eager shoppers were staged outside when Ukiah's brand new Costco opened its doors to the public Thursday, welcoming customers who began arriving before sunrise to peruse the aisles of the long-awaited store, a first for Mendocino County.

Even before its debut, the national warehouse chain boasted about 9,000 members in the Ukiah Valley, offering some guarantee of success as it tests out its new market area, a company representative said.

And there seems to be little doubt about demand among community leaders, for whom the huge new store marks the city's arrival.

“It's almost like it puts Ukiah on the map,” Mayor Kevin Doble said. “Just the sheer market area of Costco would bring people to our town that ordinarily wouldn't come here, and I think that's always good for a city, when you're in an area where you can be somewhat remote or isolated. I think it will be a really good thing for our community.”

Thousands of Costco members for years have taken their hard-earned cash out of Ukiah, the seat of Mendocino County, to spend at existing Costco stores across the Sonoma County line, in Santa Rosa and Rohnert Park. The new location is expected to draw those local consumers and others from around Mendocino and Lake counties, as well as southern Humboldt and northern Sonoma counties.

General manager Michael Wiederholt said he expected about 5,000 shoppers on weekends and 2,500 customers daily on weekdays.

City officials anticipate about $2 million a year in sales tax revenue from the store, based on Costco sales projections, increasing general fund revenue by about 11 percent, Ukiah Finance Director Dan Buffalo said.

About half that would be divided between maintaining public safety services and improving city streets under voter-approved ballot measures, he said.

But he and other officials also hope having the popular retail outlet helps further establish the city of 16,000 people as a regional hub, bringing more people into other stores and restaurants, and potentially encouraging other large-scale companies, like Target, to set up shop.

Costco's efforts to open in town have been formally underway since 2011, though the company's interest in having an inland Mendocino County store reportedly dates back earlier. But between environmental review and two legal challenges, delays pushed back the start of construction until last fall.

The 141,000-square-foot store is at 1275 Airport Park Blvd. on the south end of town, on 15 acres the city had purchased with redevelopment funds and later sold to Costco to ensure the store became a reality.

It's next to Walmart, Friedman's Home Improvement Center, Food Maxx and Staples, among other retailers and restaurants.

The city also dedicated about $4 million to road improvements at the Highway 101/Talmage Road interchange and Airport Park Boulevard, though Doble said the work was long needed to facilitate build-out of the business park, beyond just Costco.

The new store employs 230 people, more than half of them full-time. Though 40 were transferred from other Costco locations in California and as far away as Virginia, 190 were hired locally from the communities of Ukiah, Laytonville, Cloverdale and Lake County, company representatives said.

Wages start at $14 an hour, said Wiederholt, the general manager. The company is known for providing good working conditions and benefits for its employees.

“We want to take care of employees and make sure that people who have made a commitment to come work for the company can have a livelihood and take care of themselves and their families,” said Drew Sakuma, vice president of operations in Costco's Northern California Regional Office. “And we know if we hire full-time employees, they're more committed. They're going to do a good job, and they're going to be very loyal.”

Costco's arrival in Ukiah is not without worry that smaller, local stores could suffer as customers flock to the retail behemoth, which has about 523 locations in the United States and last year brought in $126.2 billion in revenue.

“The local businesses that support our community are vitally important,” Mendocino County Sheriff Tom Allman posted Tuesday on Facebook. His message welcomed Costco but reminded residents of the value of local merchants. “The thousands of dollars of donations they give, the real estate that they occupy and the thousands of jobs that our local residents have cannot be forgotten. I will continue to support our local small businesses and hope you will also.”

Most so far are looking on the bright side and hoping that everything shakes out to the benefit of the city and the business community as a whole.

“Just like with any new business, everybody definitely has their concerns, and everybody knows that there's going to be little bit of a transition period,” said Julia Siderakis, president of the Greater Ukiah Chamber of Commerce.

With the increased consumer traffic in town and the recapture of Costco sales that otherwise would be made in Sonoma County, she said she hopes business owners will find an equilibrium in which all profit. Siderakis also noted that Costco is stocking locally made wines and other products, such as Gowan's ciders and Pamela's Products gluten-free baked goods and mixes. They also have printed gift cards for a variety of independent, locally owned restaurants.

At the 43-year-old Ukiah Natural Food Co Op, General Manager Lori Rosenberg said it's too early to say what kind of impact Costco will have on the locally focused grocery store, which provides 106 jobs, 57 of them full-time.

More than 7,000 people are members, though anyone can shop at the 6,800-square-foot store on South State Street, she said.

“I'm looking at it as an opportunity for having other people come to Ukiah and have an interest in exploring other business in town,” Rosenberg said.

Chris Rehm, who for nearly two decades has operated Ukiah Optical in the Pear Tree Center, said he thought the Costco “might hurt my business a little bit, but it's good for the town.”

The small shop where he works with one other employee is filled with an estimated 500 frames, and he prides himself on his customer service.

“The town has not been growing,” said Rehm. “You see a lot of vacant storefronts. In the long run, it may be good for the town and bring in other business, hopefully.”

Gina Vaughan, a pharmacy technician at Myer's Pharmacy, opened in 1982, similarly expressed confidence in the independent store's strong personal attention to customers and staying power.

The shop employs local people who know their customers and their families by their first names.

“Everybody likes the new stuff, and it's shiny and it's exciting,” Vaughan said of Costco. “But long lines, everybody and their brother is there. People already are talking about avoiding it the first few months.”

There's no question the new store had a good day Thursday, with the first customers arriving at 3 a.m. and 300 to 400 gathered outside when the doors opened a bit earlier than the scheduled 8 a.m., after a formal ribbon-cutting. By 1:30 p.m., about 2,000 people had come through, Assistant General Manager Hunter Granstra said.

“Everyone is so excited today,” Granstra said. “The energy in this building is unreal.”

Carts rolling across the gleaming floors were laden with oversized packages of paper towels, flats of bottled water, bulk fruits and vegetables. Other goods on the shelves ranged from a $179, 93-inch plush teddy bear - one of which took a tumble from its perch - to a $4.99, 12-ounce package of plump blackberries.

Potter Valley resident Debbie Rensen, 65, said she has been a Costco member since the early 2000s. She came to opening day for shampoo, but found herself leaving with a large pack of Racer 5 IPA beers, sponges, a doormat and an assortment of other items she loaded into her black Jeep in the strong summer heat.

“A lot of people are worried about this putting other businesses out of business,.” she said. “I don't think that's going to happen, because I'm still going to Friedman's for garden supplies and things like that, and I'm still going to go to the co-op for the organic things we get there. I've always gone to Costco and places here, and I plan to keep doing that.

You can reach Staff Writer Mary Callahan at 707-521-5249 or mary.callahan@pressdemocrat.com and Hannah Beausang at 707-521-5214 or hannah.beausang@pressdemocrat.com.