Brian Sharp

@SharpRoc

Deep in the massive CityGate development on the city's south side, the expansive steel frame canopy of a new Costco warehouse is the center of activity.

Workers walk the roof's edge, or stand in motorized lifts, moving this way and that, up and down.

Within the next 30 days, construction should begin on four new retail buildings at the corner of East Henrietta and Westfall roads — bringing the project closer to curbside and making its impact more visible.

At nearly $200 million, CityGate is the largest of several transformative projects underway or nearing completion across the city.

The project by Anthony J. Costello & Son Development is roughly a decade in the making and underwent several revisions, finally gaining traction with the addition of Costco in summer 2013. Costco hopes to open in the spring. Five Star Bank announced this week that it would open its first city branch at CityGate next fall, and developers are finalizing leases with four restaurants as well as a large retailer, nearly all of which they say will be new to Rochster. They also have a letter of intent from Hyatt House for a 150-room hotel.

"You are energizing an area that ... has been off the tax rolls for the better part of a century," said developer Anthony Costello.

All remaining construction should be underway by spring, including a 500-car parking garage, an avenue of shops, and 300 apartments catering to young professionals. The first residents should move in late next year, or early 2016.

The impact has yet to be realized, as stores have yet to be announced or open, said Richard Rowe, owner of Rowe Photo and a mainstay on Mt. Hope since 1969.

"But so far, everybody is thrilled," Rowe said.

Why?

When Costco opened last month outside Syracuse, the store draw large crowds and started a price war on gasoline that has driven rates down there below $2.90 a gallon.

The national retailer — which reportedly pays an average hourly rate of $20 an hour — is projected to generate $200 million in annual sales, translating to $16 million in sales tax revenue.

Once fully built and occupied, CityGate could generate almost $29 million in sales tax revenue, according to projections Costello provided to the city, and create more than 1,000 permanent jobs.

Costco would pay an estimated $118,000 in property taxes after tax abatement the first year, compared to the $68,000 Costello said he was paying on the entire site. Payments would increase annually.

CityGate is projected to generate a net $16 million in property tax-related payments over a 20-year period after abatement. The abatement covers the same period and redirects 75 percent of payments back into the project.

CityGate adds to a boom in south-side investments, also including Brooks Landing, College Town and, closer to CityGate, Brickstone. Just over the border in Brighton, The Reserve (another Costello project) totals 70 acres and promises more than 300 housing units, all for sale rather than rent like at CityGate. Improvements to roadways and Interstate 390, bike lanes and better lighting should improve access.

"I think it is going to be a reinvention of what the city is about," Rowe said.

The area is becoming one where people can live, work, play, Rowe said, "without ever having to go to a mall." Where there used to be one Main Street now the city is developing several. And where there were neighborhoods centered around ethnicity, Rochester is organizing around interests, he said, likening the College Town/CityGate area to that of Park and University avenues.

Costco is sure to be the draw. But it won't be the only attraction. CityGate also will provide greater canal access, including boat launches, trails through the site and a corner park along which restaurants will have outdoor seating.

BDSHARP@DemocratandChronicle.com

Twitter.com/sharproc

About this series

Each Friday, the Democrat and Chronicle will highlight projects that are transforming Rochester. The 10-week series will focus on big developments, from College Town to Midtown and the Inner Loop. But transformation takes many forms, large and small. Share pictures of how you see your city changing on Twitter or Instagram, and tag them #transformroc, or email bdsharp@DemocratandChronicle.com.

Coming next week: A look at transit with the new bus and train stations.