Citing financial considerations relating to the deal, Atlas Investment has terminated its option to purchase the former Costco Warehouse property in Warrenton.
Gary S. Gilbert, a principal with the Portland, Ore.-based investment company, confirmed to Coast River Business Journal that his firm notified Costco officials of Atlas’ decision around Feb. 17. Atlas held the option on the Costco property for about three months.
"We had to cancel our option," Gilbert said. "It was a simple matter of arithmetic."
Atlas planned to redevelop the former Costco Warehouse Store into a multi-user commercial development.
However, Gilbert told CRBJ that Atlas was unable to find a way to cover the cost of the property and improvements with just the lease payments paid by tenants - and keep the rents at market rates.
He added that current economic conditions, especially the difficulty in obtaining loans, also made the project untenable.
"It seemed that every time we turned around, there was another roadblock in our way," Gilbert said.
"As soon as we saw it wasn’t going to work, we (turned it back) into Costco’s hands," he said.
Atlas Investments owns Youngs Bay Plaza, located adjacent to U.S. Highway 101, in Warrenton, and hoped to develop the former Costco property into another successful commercial venture that would attract several retail tenants.
Gilbert declined to say whether Atlas had been negotiating with any retail companies on leasing any of the Costco property prior to its decision to terminate its option.
One retailer that has been rumored to have at least an interest in relocating to the Warrenton area possibly in the former Costco building is Jo-Ann Fabrics & Crafts.
Kevin Beagle, a real estate representative for Jo-Ann Fabrics corporation, declined to say whether the company was looking to re-locate from its current site in Astoria.
Messages left for an official in Costco’s real estate office were not returned by press time.
The former 70,000 sq. ft. Costco building was closed in late November when the company opened its new members-only warehouse retail store at nearly twice the size of the old building.