Costco incentive advances as Sam’s Club lines up second Tucson location

TUCSON, AZ (March 6, 2026) — The Tucson City Council approved the next step toward a site-specific sales tax development agreement with Costco Wholesale for a new retail warehouse and fuel station planned at 9748 E. Old Vail Road on Tucson’s southeast side, which would add a fourth Costco warehouse in the greater Tucson area. While a separate big-box project — a proposed Sam’s Club near Swan Road and East 29th Street — continues moving through the early development pipeline.

Costco: five-year reimbursement tied to “unrestricted” city sales tax

City materials describe the Costco project as a 158,000-square-foot warehouse with an associated fuel facility on a roughly 22-acre vacant site near the Rita Ranch area. The project is tied to an incentive structure that reimburses Costco for eligible costs associated with public infrastructure and related improvements needed to develop the site.

According to the city-commissioned economic analysis, the proposed incentive would run for five years and reimburse Costco 45% of the City’s unrestricted sales tax revenues generated by the project (excluding construction sales tax). The analysis estimates the incentive value at about $7.3 million over the term.

The same analysis projects the project would generate about $22.7 million in city taxes over five years, while the City would retain the remaining share of retail sales tax plus one-time construction sales tax — estimated at about $15.2 million over the same period.

Jobs, payroll, and site activity

The economic analysis projects the store could employ up to 320 workers with a combined annual payroll of about $13.5 million.

On the planning side, the City of Tucson’s development tracking system shows a completed pre-application entry for the site referencing “New Costco coming to the Area” at the Old Vail Road address.

Sam’s Club: land deal signals new southeast-side big-box push

Separately, a Sam’s Club affiliate has purchased about 27 acres near the southeast corner of Swan Road and East 29th Street, a location just north of Davis-Monthan Air Force Base, positioning the site for a potential second Sam’s Club in Tucson. Reporting on the transaction places the purchase price at about $21.75 million.

Incentive watch: Unlike the Costco item advanced by the Council, public reporting to date has not indicated a City of Tucson tax incentive connected to the Sam’s Club site.

What happens next

For Costco, the notice of intent sets the stage for final negotiations and formalization of the development agreement, which typically defines eligible reimbursable costs and the mechanics for verifying revenue and reimbursements during the term.

For Sam’s Club’s site, the next public milestone would likely include submitted development plans, any rezoning or PAD actions as needed, and a traffic/infrastructure review tied to site design at Swan and 29th.

This report is based primarily on the Tucson Mayor and Council study session on March 3, 2026, along with related City staff presentations and public comments.