Council approves Costco depot annexation, certifies EIR and pre-zones site M‑1

The Tracy City Council on March 4 voted to certify a final Environmental Impact Report (EIR), adopt a Mitigation Monitoring and Reporting Program (MMRP) and approve a development review permit for the “Tracy Costco Depot Annex” project, a proposal to annex about 104.46 acres at 1600 West Schulte Road and build two warehouse buildings totaling roughly 1,700,000 square feet.

Project planner Genevieve Federighi told the council the annexation area is “about 104 acres” and that the development review permit would allow two buildings, one about 544,000 square feet and the other roughly 1,200,000 square feet, with truck queuing designed to keep backups off Schulte Road. Federighi said the city will submit a petition to the San Joaquin Local Agency Formation Commission (LAFCO) to add the property to city limits and that the proposed zoning for the site is light industrial (M‑1).

Nut graf: The council’s decisions clear the way for Costco Wholesale to expand its Tracy logistics campus, subject to LAFCO approval of annexation and the city’s implementation of mitigation measures spelled out in the final EIR. The EIR identified some significant and unavoidable impacts (including air quality and vehicle miles traveled) while the applicant agreed to additional sustainability measures incorporated into the project description.

Environmental consultant Elise Laws summarized the CEQA review history and the document’s conclusions, saying the city prepared a draft EIR, a recirculated draft EIR focused on air‑quality and greenhouse gas analyses, and a final EIR. She told the council that “there were a few significant and unavoidable impacts in the draft EIR” and that the recirculated draft EIR maintained those unavoidable air‑quality impacts despite additional mitigation measures. Laws noted the final EIR includes a Mitigation Monitoring and Reporting Program listing timing, implementation responsibility and enforcement for each measure.

Costco director of real estate Christine Lasley said the two new buildings would augment the company’s existing Tracy campus, which she described as supporting Northern California logistics. “Currently, we employ over 1,200 employees at the distribution campus, an additional 200 people at the Tracy retail store,” Lasley said, and she said the project could add about 250 jobs. Lasley described employee amenities, large areas reserved for on‑site solar and a commitment to sustainability; she said Costco would purchase up to 3.4 megawatts from PG&E and generate a minimum of 3.8 megawatts on site.

Public comment included organized labor and environmental groups. Liz Sutton and Manuel Zapata of Sheet Metal Workers Local 104 urged approval, citing construction jobs and commitments to hire apprentices. Eric Parfrey of the Sierra Club said Costco’s settlement with the Sierra Club (a private agreement) includes measures the group expects to become a higher standard for future large industrial projects. Kevin Carmichael, representing San Joaquin Residents for Responsible Development, outlined additional measures Costco agreed to in private negotiations addressing valley fever dust controls and emergency response plans related to battery systems; he told council those measures resolved residents’ earlier objections and asked the council to approve the project.

Council discussion referenced fiscal and service impacts. Ms. Schneider asked the council to reflect in the fiscal documentation that the property not be detached from the Tracy Rural Fire District to keep approximately $600,000 in parcel tax revenue with the fire district; planning staff confirmed that amendment was added to the resolution and the ordinance title. Council members asked about truck routing; traffic engineers said truck traffic would be routed to International Parkway and Interstate 580/205 and prohibited from turning toward Coral Hollow because Coral Hollow is not a truck route.

The council voted unanimously to adopt the resolution certifying the final EIR, adopting the MMRP and related findings and to approve the development review permit and the city’s petitioning LAFCO for annexation. The council then introduced and waived full reading of an ordinance pre‑zoning the property M‑1; that ordinance will take effect if and when the property is annexed. The motions passed on roll call votes with Mayor Areola, Councilmembers Nygaard, Bedoya and Evans, and Mayor Pro Tem Abercrombie voting yes.

The project still requires LAFCO approval for annexation before pre‑zoning becomes effective and includes mitigation and monitoring the city will be required to enforce under the MMRP. The final EIR and errata are part of the public record and include mitigation measures staff said are intended to reduce many impacts to less‑than‑significant levels, while noting some air‑quality and VMT impacts remain significant and unavoidable.

Ending: Staff and applicant representatives said they will return with next steps for LAFCO submittal and permit implementation; the applicant told the council it hopes to begin construction in spring if approvals proceed.