The possibility of a 650,000-square-foot retail development on Tsawout First Nation land is being explored by a Vancouver property development company, reviving rumours that Costco could be looking at a Central Saanich location.

PDG Property Development Group, which is also involved in a major retail development on Tsawwassen First Nation land, is working with Tsawout on a retail development feasibility study, Keith McRae, PDG acquisitions and development director, confirmed Thursday.

But it is too early to say whether the development will go ahead, McRae said, and no potential clients have been approached.

"It's in the early feasibility discussion stage. We have to make sure it's a feasible development site before we can make recommendations to tenants," he said. "I have no idea if Costco is interested."

Rumours of Costco opening a second Greater Victoria location in Central Saanich have been flying around for nearly 10 years, but the company is not about to tip its hand.

Costco's reply, as ever, was short and sweet Thursday when asked about persistent rumours it has been in discussion with Tsawout.

The company said there was no public information available on a new opening in Victoria. "Our corporate policy is to not comment on specific markets," said Costco co-founder Jeff Brotman.

Any retail development hinges around access to the site, McRae said.

The exact location of the proposed development has not been decided, but it is likely to be close to the intersection of Pat Bay Highway and Mount Newton Cross Road. The highway runs through reserve land. A McDonald's restaurant, gas station and other retail outlets already stand on Tsawout land at the intersection.

Central Saanich Mayor Alastair Bryson said he has heard some development is on its way. He said it's public knowledge the Tsawout have approached the provincial transportation ministry to discuss improved access to their lands from the highway.

"We have invited the Tsawout to bring their plans and inform us as to what is happening in the near future," said Bryson, adding nothing has come to council yet.

"We are aware that there is an interest with both First Nations in our community, the Tsartlip and the Tsawout, in having economic development on their reserves, and Central Saanich is working on updating our servicing agreements with the First Nations to allow them to meet their desires," he said. "Obviously, there has to be some to and fro because a significant amount of services are linked up."

The transportation ministry offered no insight on the issue, noting the Tsawout are one of a number of stakeholders whose interests will be considered as the long-term strategy for the highway is studied.

The ministry is spending $200,000 to update a 2007 plan for the corridor running from Swartz Bay ferry terminal to the McKenzie Avenue interchange.

The strategy will include transit enhancements, such as support for rapid bus service and park-and-ride areas, and the possibility of a highway connection for planned growth and development at the Tsawout First Nation. The plan is to be completed by December.

Tsawout Chief Harvey Underwood did not return calls Thursday, but the band website emphasizes maximizing employment for band members through development.

McRae said a decision is not imminent.

PDG, which bills itself as "Western Canada's pre-eminent shopping centre development company," has been talking to the Tsawout for about six months, McRae said.

"But I think Tsawout have been looking at this for the better part of 13 years," he said.

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