Costco opening new warehouse under affordable housing complex in South LA

South LA Costco housing project breaks ground

According to Thrive, Costco's new state-of-the-art store will feature fresh produce, healthy food options, optical services, a pharmacy, and delivery services for the community.

SOUTH LOS ANGELES, Calif. - Costco is embarking on a landmark expansion strategy in South Los Angeles, integrating a new warehouse store directly beneath a massive residential complex. 

The project, located in Baldwin Village, recently broke ground and will feature 800 apartment units, nearly a quarter of which are reserved for low-income residents. 

What we know:

FOX 11 first told you about real estate firm Thrive Living's plan for the mixed-use building located at 5035 Coliseum Street in 2023. 

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The project will convert an unused five-acre commercial site in Baldwin Village into a state-of-the-art Costco offering fresh produce, optical services, a pharmacy, and delivery services for the community. 

Above the retail space, 800 apartments will be constructed, with 184 units (23%) dedicated to low-income households. 

The remaining units are earmarked as non-subsidized affordable and workforce housing for seniors and families, including those with Section 8 vouchers. 

Residents will have access to a fitness center, high-tech shared workspaces, study spaces, community rooms connected to courtyards, and a rooftop pool.

Timeline:

The project officially broke ground in January 2026. 

According to Thrive, construction is expected to take about two and a half years to complete. 

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Costco CEO Ron Vachris confirmed during the company's first-quarter fiscal year 2026 earnings call that the warehouse is slated to open in 2027, FOX Business reports.

What they're saying:

"We couldn't be happier to redevelop this underutilized property into a community asset that creates jobs, generates tax revenues, and addresses the shortage of affordable and workforce housing," Ben Shaoul, founder of Thrive Living, said in a statement.

Governor Gavin Newsom praised the initiative, stating, "Today, Thrive Living and Costco are breaking ground in more ways than one, with an incredible collaboration that uses our new state laws to transform an underutilized space into a prosperous housing project and ret1ail center."

Los Angeles Mayor Karen Bass added, "We are breaking with the old ways of doing things and moving Los Angeles forward. Unprecedented action driven by urgent collaboration in both the public and private sector is what is expected and that's what we are delivering today."

Why you should care:

This development is the first in the U.S. to use Costco as an anchor tenant for a mixed-use housing project. 

It serves as a test case for AB-2011, a California law designed to streamline approvals for affordable housing projects to combat the state's housing shortage. 

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Beyond housing, the project is expected to create up to 400 permanent jobs at Costco and support thousands of additional jobs during the construction phase.

By the numbers:

• $425 million: Total Investment
• 800: Total Residential Units
• 184 (23%): Low-Income Units
• 5 acres: Site Size
• 400: Projected Permanent Jobs

What's next:

As construction progresses, Costco plans to monitor this "creative way" of reaching members to see if it can be replicated in other high-volume, space-constrained markets. 

Meanwhile, the company continues to see record growth, with CFO Gary Millerchip reporting unprecedented holiday sales in e-commerce and fresh food departments during the most recent quarter.