Brea's Costco Tax Deal Differs from Fountain Valley's Store Setup

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Brea has proposed a controversial 50-year sales tax sharing agreement with Costco, unlike the existing Costco store in Fountain Valley that operates without any special tax deals. Experts and local leaders are sharply divided on whether Brea's arrangement overpays the developer, shifts risk onto taxpayers, and could distort how cities compete for big-box retailers across the region.

Why it matters

The debate over Brea's Costco deal highlights the broader challenges cities face in attracting and retaining major retailers. While Fountain Valley's Costco operates without special incentives, Brea is offering a long-term tax sharing arrangement, raising questions about the appropriate balance between business attraction and protecting taxpayer interests.

The details

Brea's proposed 50-year agreement would give Costco 50% of the sales tax revenue generated by the store, a deal that some experts argue overpays the retailer and shifts financial risk onto the city. In contrast, Fountain Valley's existing Costco operates without any such tax-sharing arrangement, representing a different approach to landing and keeping big-box stores.

• Brea has proposed a 50-year sales tax sharing agreement with Costco.
• Fountain Valley's existing Costco store operates without any special tax deals.