Faye Garneau, executive director of the Aurora Avenue Merchants Association, is well known for her pro-business screeds in the association's monthly newsletter. Hardly a month goes by that Garneau doesn't rail against taxes, zoning restriction, or parking changes that might affect the bottom line for the businesses under her watch.

April was no exception: Garneau took on the neighborhood planning process. "The neighborhood planning process and the design review processes were supposed to be about the business community and the neighborhoods working together to make the project acceptable to both," Garneau wrote. "Actually, the process is being used to 'stop' any changes that may interrupt someone's life." Crazy Republican talk? Hardly.

Garneau is onto something: It seems the Haller Lake Community Council was up to its old tricks. The northeast Seattle neighborhood--tucked between Aurora Avenue North and I-5 just south of NE 130th Street, encircling the lake it's named for--is notorious for being overly hands-on when it comes to the neighborhood planning process. The group, several hundred members strong, has been credited with stopping a few neighborhood development proposals over the years, including a garbage transfer station, a medical-waste incinerator at nearby Northwest Hospital, and a bus barn for Metro.

Lately, the council set its watchdog eyes on Costco, which proposed a three-story warehouse on NE 125th Street and Aurora, its first new Seattle store since the inaugural warehouse was built in SoDo in 1983. The Haller Lake Community Council's vision for the neighborhood, spelled out in its neighborhood plan, doesn't include boxy warehouses. Instead, the council wants pedestrian-friendly, smaller-scale commercial development, on par with something like University Village. The new Costco obviously doesn't fit that vision.

Moreover, the community council was concerned that traffic from the warehouse, which hawks everything from discount tires to plasma TVs and 48-roll packs of toilet paper, would spill into the residential neighborhood. But instead of letting Costco redirect traffic back to Aurora or other main streets, the neighbors wanted Costco to remake their neighborhood, closing off two east-west streets to prevent customer traffic from shortcutting through the residential neighborhood. In order to close those streets, the city would likely require that a third street--Stone Way North, which from 115th to 125th Streets is more of a nature trail than a road--be reopened to cars to ease traffic flow. The budget-crunched city can't pay for that, so neighbors were potentially looking to Costco to absorb the cost.

The store, however, had already agreed to $1 million in mitigation, including new sidewalks, a traffic light on Aurora Avenue North, and a landscaped buffer between the back of the store and the residential neighborhood. "I really thought that Costco had addressed their concerns, and to great expense," says Garneau. "Honestly, Costco bent over backwards." Indeed, the store was looking at installing sidewalks and even new sewers on streets a block away from the project. The neighborhood's requests that the company close or open other streets, on top of making infrastructure improvements, seemed to be taking mitigation demands too far.

After a year of navigating the city's planning process, Costco suddenly pulled the plug on the project in early April, withdrawing its permit application with the city. Folks like Garneau at the merchants association--a group that was excited to add Costco to the retail mix of Aurora--are pointing the finger at Haller Lake residents (and the city's design process), saying the neighborhood's mitigation demands chased off an exciting development that was poised to create a few hundred well-paying local jobs, and would have poured money into the city's tax coffers. The average Costco store pulled in $112 million in sales last year (the company is number 29 on the Fortune 500 list, with $45.5 billion in annual revenues).

The idea of paying to reopen Stone Way could have been the last straw for Costco, which was already facing a years-long planning process (given the increasing neighborhood demands, and the chance that neighbors would appeal city approvals of the project). To Aurora business owners, well versed in navigating the planning process, it's no wonder Costco bailed.

"I guess I'm flattered by their assertion that we have that much power," says Haller Lake neighbor Dave Nurney, who since 1978 has lived near the proposed Costco site, and headed up the Haller Lake Community Council's Costco committee for the past year. Though Nurney, a civil engineer, won't take all the credit for fending off the Costco development, he does admit Haller Lake's concerns likely had something to do with the company's decision. "We're a factor, I suspect," Nurney says. "They knew that by and large the neighborhood opposed what they were trying to do."

Costco has not officially announced why it dropped the Aurora project, and Costco's real-estate director, Peter Hahn, declined to comment on the decision. He referred questions to Costco founder and CEO Jim Sinegal, who did not return calls.

Now that the new Costco project is dead, Aurora is mourning the loss of the new jobs and tax revenues. Costco employees--there were estimated to be up to 450 positions at the new store--make $40,000 a year after four years, and the company is known for providing great health and retirement benefits (to the chagrin of its stockholders). Over at Mayor Nickels's office, where job creation is a focus of this year's agenda--especially in sectors other than Nickels' pet biotech industry--staffers say they're committed to helping Costco build a second Seattle store. "They want to look at alternative sites," says the mayor's spokesperson, Marianne Bichsel. "That [Aurora] location turned out not to work."