Brea Office Park Bought With Plans for Future Costco

Developer and Brea native Dwight Manley has closed his purchase of a business park in Brea, clearing the way for the Orange County city’s first Costco location.

Hines offloaded the Beckman Coulter Campus at 200 South Kraemer Street in Brea for $140 million, the Orange County Business Journal reported. Hines previously acquired the five-building office and industrial complex in 2018 for $115 million. The property totals 576,234 square feet across nearly 34 acres.

Last month, Brea city leaders agreed to a 50-year sales tax rebate with Dwight Manley if he executes a lease with Costco as officials hoped to bring the big-box store to the city, the Los Angeles Times reported. The Brea City Council voted to give Manley a year to bring Costco to Brea once his acquisition of the 34-acre property was complete.

Under the agreement, Manley will receive a 100 percent rebate of the sales tax revenue generated by a future Costco location in the first two years. Over the course of the 50-year deal, the city would collect 42.5 percent of the sales tax. The deal works out to approximately $50 million in sales tax for the city and $83.5 million reimbursed to Manley. “This is the skinniest developer deal I’ve ever heard of,” Manley told the city council of the agreement at the time.

“Costco does not enter into agreements with cities,” Manley said. “It’s up to the property owner. They’ve had property owners do this in many instances where cities participated because they wanted a Costco.”

While Manley was negotiating with Hines, other bidders were interested in purchasing the site for other purposes, including an Amazon warehouse or high-density housing.

Costco is in the process of growing its presence in Orange County.

Last year, the wholesaler acquired two sites in Mission Viejo and Lake Forest in two separate deals to build new Costco locations. In Mission Viejo, Costco bought a former Bed Bath & Beyond at 25732 El Paseo for $14.4 million with plans to tear down the building and build a new fueling station with 40 pumps spanning more than 17,000 square feet next to I-405. In Lake Forest’s Foothill Ranch neighborhood, Costco picked up the defunct Regal Cinema at Foothill Ranch Towne Center for $12.5 million and is looking to replace it with a 160,811-square-foot store. — Chris Malone Méndez