Costco to build full-size warehouse beneath ~800 apartments in South LA — a first for the retailer
Costco and developer Thrive Living will build a full‑size 185,000 sq. ft. Costco beneath roughly 800 apartments at 5035 Coliseum Street in Baldwin Village/Baldwin Hills, South Los Angeles, with openings expected in 2027, including affordable units and many construction jobs.
- Mixed‑use first: The project pairs a full‑size Costco (≈185,000 sq. ft.) at street level with ~800 apartments above, a U.S. first for Costco’s retail model.
- Affordability & jobs: About 184 units are reserved for lower‑income households; project estimates up to 400 permanent Costco jobs and thousands of construction jobs.
- Privately financed & AB 2011: Roughly $425 million in private financing; cited as the first LA/California project approved under AB 2011’s streamlined rules.
Project overview
Site and scope: Thrive Living plans an 800‑unit apartment complex rising above a roughly 185,000‑square‑foot Costco at 5035 Coliseum Street in Baldwin Village/Baldwin Hills, South Los Angeles. The scheme includes two levels of underground parking beneath the store and residential amenities such as a rooftop pool and fitness center.
Groundbreaking was held in September 2024; construction is expected to last about 2–2.5 years, and Costco CEO Ron Vachris said the store should open in 2027.
What the plan looks like
Thrive Living frames the project as a reuse of an underused commercial site into a housing‑rich, jobs‑rich mixed‑use property. The design places the Costco at street level, with two basement parking levels under the retail footprint and residential towers above — stacking retail, parking and housing.
Costco’s role and rationale
“get closer” — Costco CEO Ron Vachris described the Baldwin Village arrangement as a way to reach denser urban markets where a traditional 25‑acre site isn’t available, and to ease congestion at busy Southern California warehouses.
Key point: Costco will be the anchor tenant and will not own the building; it will pay long‑term rent to support the project’s financing. Industry coverage notes this would be the first U.S. example of a residential building constructed directly above a full‑size Costco warehouse.
Housing details and affordability
Of roughly 800 apartments, about 184 units (~23%) are set aside for lower‑income households targeted at 30%, 50% and 80% of AMI. The remaining ~616 units are described as workforce or naturally occurring affordable housing (aimed near 120%–150% of AMI), rather than luxury product.
Financing note: Thrive says the project is privately financed and does not rely on low‑income housing tax credits or typical government subsidy programs.
Financing, cost and partners
Cost & capital: Thrive founder Ben Shaoul has described total development cost at roughly $425 million. The model leverages private capital and steady rental payments from Costco as the anchor to make the affordable unit mix financially viable without large public subsidies.
Partners: The Housing Authority of the City of Los Angeles (HACLA) is listed as a partner in the effort.
Regulatory angle: AB 2011 and approvals
The Baldwin Village project has been cited as the first development in Los Angeles and California approved under AB 2011 (the Affordable Housing and High Road Jobs Act). AB 2011 allows streamlined, ministerial approval of certain affordable multifamily projects in commercial zones when they meet set affordability and labor standards, speeding entitlement timelines.
Local officials and architects also note zoning incentives and permitting approaches that encourage stacking housing over big‑box retail in corridors where land is constrained.
Community and economic impact
Jobs: The retail footprint is estimated to support up to 400 permanent Costco jobs and thousands of construction jobs during build‑out. Thrive and local officials emphasize local hiring and Costco’s track record of hiring from nearby neighborhoods.
Local context: Baldwin Hills/Baldwin Village is an area with economic need; proponents argue the project can deliver more housing units, on‑site jobs, and access to a major retailer that provides groceries and household goods at scale.
Potential concerns and tradeoffs
Residents and leaders will watch operational details closely. Key issues include:
- Traffic and deliveries: Managing delivery operations and service access to limit congestion will be essential.
- Parking and safety: Underground parking and strict management plans are required to separate freight/service routes from resident access.
- Affordability permanence: Advocates will press for clarity on long‑term tenant protections and the actual durability of affordability commitments.
- Neighborhood character: Neighbors may worry about how a large chain and scale of development affect local retail and identity.
Why national observers are watching
Architects, affordable housing developers and planners see this as a potential template for converting underused big‑box sites into housing without heavy public subsidy. If the model delivers promised affordability levels while relying on private capital and anchor‑tenant rent, it could be replicated in other constrained urban markets.
Implications for the United States
Economic impact
- Jobs: Private development tied to major retailers can create construction and hundreds of retail positions, potentially benefiting high‑unemployment areas.
- Private financing appeal: A privately financed, affordable‑unit mix may appeal to cities reluctant to grant large subsidies if anchor rents support viability.
Political consequences
- Local control vs. speed: AB 2011 raises questions about balancing faster approvals with robust community input.
- Policy model: Some policymakers may champion this as a market‑based housing solution; others will scrutinize how incentives shaped approvals.
Social effects
- Housing availability: Adding ~800 units, with ~23% reserved at lower incomes, could ease housing pressures in a high‑cost metro.
- Community disruption: Planners must manage local impacts to avoid displacement of small businesses and neighborhood burdens.
Cultural relevance
In neighborhoods like Baldwin Hills/Baldwin Village, projects that combine jobs and housing can be framed as revitalization; supporters highlight practical benefits, while critics worry about chain‑store influence on local character.
Practical applications for other regions
Replicability hinges on three elements: a deep‑pocket anchor tenant willing to lease, a developer capable of safely stacking uses, and local rules (like AB 2011) that permit streamlined approvals. Design and management for deliveries, parking and resident safety — plus enforceable hiring and affordability commitments — are crucial.
For further reporting
Local stakeholders, labor groups, housing advocates and city officials will be important sources as the project moves from groundbreaking to occupancy. Watch for detailed traffic studies, final permitting documents, and any community benefit agreements that spell out hiring or tenant protections.
Sources and reporting
Reporting and coverage include: Fox Business, Housing Finance, Multifamily Dive, and Entrepreneur. These outlets summarize statements from Thrive Living, commentary on AB 2011, and remarks by Costco CEO Ron Vachris.
