Costco moves forward in East Lyme

East Lyme — Despite a delay in the groundbreaking, town officials and developers said proposed plans for a Costco big-box store at Gateway Commons near Interstate 95’s Exit 74 are moving forward.

The Costco store would serve as the initial phase of the retail component proposed for the Gateway Commons development, a 200-acre site between Exits 73 and 74. Gateway developers have built 280 apartments near Exit 73 as part of that development, and recently proposed an additional 120 rental units to be built out over upcoming years.

The proposed 158,684-square-foot Costco store, which would include an on-site gas station, was approved by both zoning and inland wetland commissions earlier this year. The store is expected to break ground in 2019, according to Newton Brainard, vice president of development and acquisition for The Simon Konover Co. of West Hartford, which is developing the Gateway site with KGI Properties of Providence.

Though earlier projections had detailed a September groundbreaking for the Costco building, a lengthier-than-expected permitting process delayed the project, Brainard said Monday.

Town officials, as well as Brainard, could not state an exact start date for the project, though plans are still steadily underway, they said.

“Once we have all our permits in hand, we will have a better ability to pinpoint when exactly we are going to begin,” said Brainard. “We are ready to go; we just need to get through these permits and we will move forward.”

Zoning official Bill Mulholland said developers overseeing the Costco project recently submitted a building permit application with the town. The application is yet to be approved by both the town’s building and zoning departments but will be reviewed by Nov. 1, building official Steven Way said.

How fast officials can grant that permit depends on whether the application adheres to the state's building code stipulations, many of which were recently changed, Way said. After an approval, however, developers must then wait through an additional 30-day appeal period before moving forward.

The building permit application submitted earlier this month required a non-refundable payment of about $200,000, Mulholland said.

“Costco wouldn’t spend that sort of money if they weren’t serious about moving forward,” Mulholland said. “At this point, the developers are getting their ducks in a row and getting through additional permits before moving forward.”

Brainard agreed Monday, saying, “It doesn’t appear that the project will fall through at this point. The tenants, or Costco, have written a very large check for the building permit, so I think that is a very good sign.”

Additionally, developers must obtain a sewer permit from the town’s Water and Sewer Commission, Brainard said. A hearing for that permit is scheduled for next month.

On a state level, Brainard said developers are also waiting for encroachment permits from the Office of the State Traffic Administration and the Department of Transportation. Developers, as well as town officials, met with the state's District 2 DOT to discuss the finer details of that permit last week — another positive sign, according to Mulholland, who was at that meeting.

The permits are one of the final remaining steps to allow for developers to build out the temporary roadway infrastructure planned by Exit 74 — changes that are being deemed necessary to open the store.

Brainard said plans for that roadway include extending the I-95 southbound on- and off-ramps at Exit 74 to a frontage road that will run by Pools Etc. That road will allow drivers coming off the interstate to either turn left toward Costco or right toward Route 161, after hitting a stop light, he said.

The state approved a permit for those changes in August. Those adjustments would be the first in a long line of changes set to take place beginning in 2021, as the state also plans a long-term project to fix and redesign the Exit 74 interchange.

Brainard could not say Monday when the Exit 74 off-ramp construction is likely to begin, stating that developers must obtain the encroachment permit before dates could be established. He also said that, based on discussions held with DOT about the off-ramp changes, he is not expecting a major disruption in traffic flow during and after construction.

He said the plan is to build the interior road leading up to Costco first, and then, "over a night or two," extend the on- and off-ramps to that road.

“The big disruption won’t be until the state redesigns that part of the highway. That will be a big disruption,” Brainard said. “Our disruption won’t be very big. Most of what we are doing is on-site, so for the public it won’t be a big disruption.”

Plans to construct the Costco store are still expected to take place over 90 days next summer, according to a previous timeline, with a grand opening scheduled for November 2019.

First Selectman Mark Nickerson was not available for comment before deadline, though he has stated to The Day in the past that the town has been planning for the Gateway district for about 20 years. It is the only remaining area in town identified for a major commercial development, he said.

He called Costco a "natural fit" and a "premier anchor store" for the Gateway parcel. He also said he believes Costco will serve as an economic driver to the town, adding stability to the town's tax base, creating jobs and bringing people into town, who then will visit the boardwalk, downtown, other shops and restaurants.

Costco also will serve as a catalyst for stores to locate to Gateway and for improvements to the nearby road infrastructure, he said.

KGI Properties and Simon Konover had received initial approval from the Zoning Commission in 2008 for their master plan for 425,000 square feet of retail space that would include one big-box store (now Costco) and five smaller "junior anchor stores," near Exit 74, and a residential area by Exit 73 on a total 200 acres of land.

The plans stalled for several years after the 2008 recession, but the developers began to build 280 apartments for the residential phase of the development near Exit 73. Those units opened in 2015.

m.biekert@theday.com

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