A long-discussed Costco project in Downey has moved significantly closer to becoming reality, but residents should understand what has—and has not—been approved. On June 23, 2026, the Downey City Council approved a Master Development Funding Agreement intended to support a new Costco warehouse and gas station along Firestone Boulevard.
The decision establishes the financial and development framework needed to move the proposal forward. It does not mean construction can begin immediately, and it does not provide a guaranteed opening date. Environmental review, planning approvals, dealership relocation, building permits and construction must still be completed.
For Downey residents, the project could create new shopping options, jobs and additional city revenue. It could also change traffic patterns along an already busy commercial corridor. This guide explains the planned Downey Costco location, the development timeline, the public investment and the major questions residents should continue following.
Readers interested in other city changes can explore our Downey local business coverage, community updates and guide to the best things to do in Downey in August 2026.
What Downey Approved and Where the Costco Would Be Built
Where Is the Planned Downey Costco Location?
The proposed Costco site is on the north side of Firestone Boulevard and covers approximately 13.6 acres. The property includes the vacant former All American Home Center site and the land currently occupied by Downey Nissan.
This location is important because it would allow the warehouse to occupy a large commercial property along one of Downey’s main east-west corridors. The site is surrounded by established retail, automobile, restaurant and service businesses, making it suitable for a large commercial project but also raising questions about vehicle access and congestion.
Former All American Home Center and Downey Nissan Sites
The Costco warehouse and fueling station would not be built only on the vacant home-center property. The proposal also requires the existing Downey Nissan dealership site, which means the dealership must move before the Costco portion of the project can begin.
Under the approved framework, Downey Nissan would relocate to a new site across Firestone Boulevard. The future dealership property covers approximately 5.1 acres, with additional nearby land considered for parking. After the new dealership is completed and operating, the current Nissan buildings could be removed to make room for Costco.
This arrangement explains why the project has a longer timeline than a normal warehouse built on completely vacant land. The city, property owners, Costco and Downey Nissan must coordinate two connected developments rather than one standalone construction project.
Residents who want to monitor official records can use the City of Downey’s Agendas and City Documents portal. Future agreements, environmental documents and public hearing notices may appear through city channels as the proposal advances.
Why Downey Nissan Must Relocate First
The project is divided into two principal phases. The first phase is the design, approval and construction of the replacement Downey Nissan dealership. The second phase is the demolition of the current dealership and construction of the Costco warehouse and gas station.
Costco is expected to provide up to $20.8 million toward building the replacement dealership, including construction, permitting, impact fees and related development costs. The property owner is expected to contribute up to approximately $1.6 million through cash, property and site improvements.
The City of Downey approved approximately $10.5 million in participation. About $10 million is intended for a lease-cancellation payment connected to the dealership relocation, while approximately $500,000 is intended to cover environmental and entitlement review costs.
The city’s contribution is coming from its General Fund Economic Opportunities Reserve. City staff reported that reserves would remain above the recommended minimum identified in its financial analysis, although some community observers have asked for more explanation about how the lease-cancellation payment was calculated.
When Could the New Downey Costco Open?
There is no confirmed Downey Costco opening date as of July 2026. Costco has not listed the location as an upcoming warehouse, and the city’s funding agreement should not be treated as a grand-opening announcement.
The preliminary development schedule presented with the project includes approximately 10 to 12 months for environmental review and land-use entitlements. Construction of the replacement Nissan dealership could then take about 12 months. Costco construction would begin after the dealership relocation and could require another 12 months.
Environmental Review, Entitlements and Construction
If the phases proceed consecutively without major delays, the complete process could take close to three years from the 2026 agreement. That makes 2029 a reasonable working estimate, but it is an inference rather than an official opening year.
Large development schedules frequently change because of environmental findings, design revisions, utility work, permit conditions, financing, construction costs or legal challenges. Residents should be cautious about social media posts that claim a specific opening month before Costco or the city publishes one.
The project must undergo review under the California Environmental Quality Act, commonly called CEQA. That process helps decision-makers examine potential environmental effects and determine whether mitigation measures or additional studies are required.
Topics reviewed may include transportation, vehicle circulation, air quality, noise, construction activity, greenhouse-gas emissions, utilities, drainage and nearby land uses. The exact scope and conclusions will depend on the environmental documents prepared for this specific proposal.
The City of Downey publishes reports on filed, approved and completed projects through its Development Activity Reports page. State environmental documents may also eventually appear through the official California CEQAnet database.
What the Costco Project Could Mean for Downey Residents
The strongest argument for the development is its potential economic effect. City officials estimate that the Costco could generate more than $3 million in annual sales-tax revenue after opening. Officials have said that revenue could help replenish the reserve money used for the project and support services such as public safety, infrastructure, parks and community programs.
The proposal is also expected to create construction employment during both development phases and permanent jobs when Costco begins operating. The city has described the employment potential as hundreds of jobs, although a final position count, hiring schedule and list of available roles have not been published.
Jobs, Revenue, Traffic and Public Questions
Residents interested in employment should not submit personal information to unofficial social media accounts claiming to recruit for the Downey location. Costco states that applications for new warehouses under construction typically become available closer to opening. Legitimate opportunities should appear through the company’s official careers website.
The agreement also references possible future sales-tax-sharing arrangements. A proposed $3 million agreement with Costco and a separate $2 million agreement involving Downey Nissan would need to return to the City Council for future consideration. Details such as payment formulas, durations and the final amount retained by the city had not been finalized when the original funding agreement was approved.
What Residents Should Watch Next
Traffic will likely remain the most visible community concern. A major warehouse and fuel station can attract substantial customer traffic, deliveries and vehicles waiting to refuel. Firestone Boulevard already serves numerous businesses and connects several surrounding communities, so driveway placement, turning movements, intersection operations and pedestrian safety will matter.
It is too early to state exactly how much congestion the project would create or which roadway improvements will be required. Those conclusions should come from the project’s transportation studies and entitlement conditions rather than guesses based on other Costco locations.
Residents should watch for information about entrances and exits, traffic signals, delivery routes, gas-station queuing, pedestrian connections, bicycle access and construction detours. They should also review whether proposed improvements address traffic entering nearby streets rather than focusing only on movement inside the development site.
Another issue is how the project affects existing businesses. A Costco could attract more regional shoppers to Downey, potentially increasing activity for nearby restaurants and services. At the same time, smaller retailers may face stronger competition in categories sold by a warehouse club. The actual effect will vary by business type, customer base and location.
Community
Community members will have opportunities to follow the project through City Council meetings, Planning Commission hearings, environmental notices and published staff reports. Useful participation should focus on specific issues supported by evidence, including traffic safety, local hiring, public financing, landscaping, noise, operating hours and neighborhood access.
The most accurate summary is that Downey has approved an important financial agreement that makes a Costco development possible, but the warehouse is not ready for construction or opening. The Nissan relocation, environmental review, planning approvals and two major construction phases still stand between the current agreement and a completed store.
Downey Daily will update this guide when the city publishes environmental documents, approves final entitlements, releases construction dates or confirms an opening schedule. Until then, residents should rely on official city records and Costco announcements rather than unverified opening dates circulating online.
Follow our local business section for future development updates, visit our Downey food and dining guides, and explore more community activities through our Downey events coverage.
Last updated July 23, 2026. Development plans, financial agreements, construction schedules and design details may change as the project completes environmental and entitlement review.
