Catoosa County will spend an additional $49,000 this year in interest payments on the $4.9 million it borrowed to develop the site for the new Costco.
The interest rate charged by Northwest Georgia Bank will increase to a minimum of 3.25 percent -- up almost 1 percent from the previous 2.275 percent and bringing the county's annual interest payment to $159,000.
But county officials are pleased with the Costco project because the store, located at Interstate 75 and Cloud Springs Road in Fort Oglethorpe, reportedly had $75 million in annual sales since opening more than a year ago. That translates into $2.25 million in annual sales tax revenue split among Catoosa County, its cities and the school district, according to Catoosa Chief Financial Officer Carl Henson.
"It was a good project," Henson said. "Sometimes you have to have an incentive package to get these businesses. This was a good one."
The county's interest payments went up because the one-year temporary financing it arranged to pay for the site work expired in January and had to be renewed for a year.
"This is in line with other banks," Henson told the County Commission this week before its members voted unanimously to approve the higher interest payment.
Currently, the county is paying only interest on the note, but eventually, commissioners must decide how to pay off the $4.9 million principal.
Commissioner Jim Cutler said paying off the principal should take three to four years, but Costco sales taxes will continue to flow into county, city and school coffers.
"Long after [the principal is paid], it will continue to be a revenue source," Cutler said. "Costco was a tremendous investment by the county and was an investment for the future."
County Attorney Chad Young said Catoosa, its cities and schools share 3 cents of sales tax from every dollar spent at Costco.
"Essentially, 3 cents of every dollar spent stays in Catoosa," Young said.