ESCONDIDO — Costco has backed out of its offer to purchase the former Sears building lease at the North County Mall.
The city of Escondido announced Costco Wholesale had retracted its offer to purchase the lease from Transformco, the parent company of Sears, just before Thanksgiving.
According to Teresa Collins, deputy director of communications for Escondido, the company asked the city to stop working on the development application that was previously submitted.
Escondido City Council approved the new lease agreement in June 2022.
Costco paid all fees necessary as part of the application process, and staff had been working on the application and was prepared to bring the project forward to the Planning Commission in the near future.
The city owns seven of the eight parcels that make up the North County Mall property. Six of those seven parcels are leased to tenants, including the mall, which rents Parcels 2, 5, 7 and 8.
The former Sears store is located on Parcel 1. Transformco’s rights to that lease end in 2041.
“It is uncertain what their next steps are at the old Sears site,” Collins said via email.
The city had anticipated $35 million in capital investments made to the property with Costco there. Costco would have paid a base rent of $100,000 per year.
Neither Costco nor Transformco responded to The Coast News’ requests for comment and additional information on why Costco backed out and what Transformco plans to do with the site.