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Restaurants, grocery stores follow tried & true rules in deciding whether to locate in Manteca

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Manteca Police officer David Bright waited on tables at Chili’s during a Tip-a-Cop benefit for a non-profit.

HIME ROMERO/Bulletin file photo

POSTED May 3, 2014 1:24 a.m.

Mayor Willie Weatherford wants to see a Texas Roadhouse restaurant in Manteca.

He can wish all he wants. It isn’t going to happen for a long time.

The reason is simple. Manteca is too close to Tracy. And the Tracy franchise has a clause in its contract that essentially prevents a Texas Roadhouse from opening in Manteca. That could possibly change if the Tracy location happens to fold or the population of both cities reach a mega-number that creates a saturation of consumers making a restaurant in Manteca feasible.

The Texas Roadhouse example underscores a wide array of factors that concerns ranging from restaurant chains and car dealers to big and small box retailers to grocery stores use to determine where they will locate stores.

Those factors include:

• Demographics ranging from population base, age composition of a city to median household income.

• Traffic count in terms of both local consumers and freeway travelers.

• Proximity to other restaurants or stores of the same chain.

• Market saturation with similar types of stores.

• Changing retail dynamics underscored by on-line shopping and the shift of some stores — Target, Wal-Mart and Kmart — into new retail territories such as competing directly with grocery stores.

u Real estate prices and developers’ willingness to cut deals for anchor tenants or package enough potential tenants to make a retail project plausible.

• • •

Why isn’t council getting more stores, restaurants for Manteca

Weatherford and the rest of the City Council are constantly bombarded with questions as to why doesn’t the city go after a certain restaurant or store.

“Every year high school students as part of a senior class project write us letters saying there is nothing to do in Manteca and why doesn’t the city get another movie theater or a skating rink,” Weatherford said. “There is nothing the city can do. It’s the market.”

That doesn’t mean the city doesn’t do what it can to encourage retailers and restaurants to consider Manteca.

Besides making their presence known at the International Shopping Center Convention — the largest annual gathering of retailers in the world — and promising to fast track building applications when they come in for an actual retail project, the city has few direct roles they can play.

The two biggest examples of how far a city can go to encourage retailers to pick them over another location are Bass Pro Shops and Costco.

Bass Pro Shops have required direct or indirect municipal concessions of some type for each of their 66 locations. In Manteca’s case, it put in place one of the cleanest ones in terms of protecting the city from financial risk. The developer — Poag & McEwen — made financial concessions to secure Bass Pro that was looking at several nearby locations including Modesto. The deal essentially splits sales tax generated from The Promenade Shops at Orchard Valley anchored by Bass Pro for 35 years between the city and the shopping center owner.

Costco had a similar deal that lured it to Manteca instead of building a second store in Modesto or a location in the future in Lathrop.

• • •

Card swipe data tracks where consumers live

Costco didn’t just willy nilly pick Manteca. They used hard data from Costco card swipes of their members to determine where shoppers in their stories reside. The Modesto and Tracy stores had a high level of Manteca shoppers. As a result, they created capacity in Modesto while expanding into a growing location that could also serve South Stockton, Weston Ranch, Lathrop, Ripon, and Escalon.

“Stores track the ZIP Code where their customers come from by credit card use,” noted Manteca’s economic development specialist Don Smail.

They use that information to help plan expansion strategy and whether it makes sense.

It is one reason why Trader Joe’s isn’t warming up to an idea of a Manteca location any time soon.

The Southern California-based chain already has locations in Modesto and Stockton. Both are close enough to serve Manteca. Yet at the same time the traffic count of Manteca residents in those two stores isn’t high enough to overcome over shortcomings the Manteca market poses for them such as population.

That doesn’t mean firms like Trader Joe’s and Starbucks aren’t driven by grassroots movements. When Smail was working in economic development in Butte County, Chico residents mounted a petition drive and made personal visits to Trader Joe’s corporate headquarters in Southern California. After Trader Joe’s looked at demographics, the situation — the closest store was 63 miles away in Sacramento and Chico was a college town — Chico got their store.

In Oroville, they landed a Starbucks by lobbying the coffee chain with hard facts. Oroville was the largest city in California without a Starbucks and its daytime population — lots of county workers — helped provide a round the clock demand.

• • •

Weekday lunch critical for some restaurant chains

Daytime lunch trade is a big factor in Manteca’s ability to land restaurants.

Developers such as Poag & McEwen have had numerous inquiries but one of the biggest concerns restaurants chains have is the weekday lunch traffic.

Most restaurants require both a dinner and a fairly robust lunch trade.

Manteca doesn’t have an high concentration of office workers. The many independents among the city’s 157 purveyors of food and drink are situated close to what employers that Manteca has to reel in lunch trade.

A commercial broker noted a chain such as Mimi’s might like the evening business potential with commuters as well as the weekend trade jacked up by the pull of Big League Dreams and Bass Pro Shops in Manteca, but they are nervous about weekday lunch traffic. As the city grows that becomes less of an issue. Still, Manteca could do well with a pump in the arm by securing larger office operations.

That is the hope behind the city’s deal that got San Joaquin County to commit to developing a county services office complex for Manteca, Tracy, Lathrop, Ripon and Escalon residents on Daniels Street east of Airport Way. Between workers and the public accessing the offices, Smail said the county center would be a solid building block to attract additional restaurants in the vicinity of Airport Way and the 120 Bypass.

• • •

Restaurants like freeway traffic

That said, restaurant representatives had indicated they like the traffic county on Highway 99 and the 120 Bypass that is pushing 200,000 vehicles a day between them.

That — plus the fact Yosemite Avenue/East Highway 120 is the main route to and from the Sierra for Bay Area residents — is one of the reasons Panera Bread is locating on East Yosemite Avenue, about two blocks from where Sierra travelers make the transition from highway to freeway making it an ideal place to stop to eat.

Manteca is working with private property owners such as the Fiore Family that owns Center Appliance in trying to position the city so it can capitalize on the new Lathrop Road interchange on Highway 99. 

When completed, the modern interchange will have easy on an off access to the only large scale and smaller parcels ready to develop in an urban area that also is heavily used by local consumers on the Highway 99 corridor between Turlock and Galt.

Smail said the new realignment of Crestwood Avenue plus the shifting on Main Street has made 10 acres that the Fiore family owns ideal for development as well as land on the northwest corner of the interchange. Not only are they readily accessible to water and sewer but the city worked with PG&E getting the utility to oversize underground electric service when  the new Center Appliance store was built plus road improvements started.

Smail said the result is “development ready” parcels that are critical for restaurants that typically want to move fast.

“It is important to have sites where a restaurant can come in and all they have to do is the curb cuts,” Smail said.

In some instances, a restaurant wants to locate in a specific area such as in the Woodbridge Shopping Center at Lathrop and Union roads due to its proximity to a solid customer base such as the age-restricted Del Webb at Woodbridge neighborhood.

That is what Perko’s would like to do. But developer Bill Filios can’t justify making the investment in additional buildings until they have other tenants lined up. They are currently working on some leads through a commercial broker.

• • •

Manteca being at bulls-eye of million consumers is a

double edged sword

Sometimes the reasons why stores don’t locate in Manteca is because owners of prime commercial land in Manteca won’t play let’s make a deal by selling sustainably below market value.

Principals in various land partnerships along the 120 corridor during the past seven years — including just recently — have been contacted by real estate agents representing retailers such as Wal-Mart that was interested in building a Super Wal-Mart and WinCo Foods. No deals were made as in each case the retailer was offering prices sustainably below market.

“They (bigger retailers) believe they can get concessions as an anchor tenant,” Smail noted.

Smail noted that the biggest advantage Manteca may have can often work against it.

“We’re at the bulls-eye,” Smail said in reference to a million customers within 20 to 30 minutes of Manteca with Tracy, Modesto and Stockton all being within 15 minutes.

Smail noted that it can work for firms that want to be centrally located such as J&M Equipment and Frito-Lay. Both firms combined Stockton and Modesto operations into a new Manteca location.’

Retail and restaurants can be trickier.

“Sometimes a firm will look at Manteca and pass because they have stores in Tracy, Modesto and Stockton that cover the Manteca market,” Smail said.

That’s why Best Buy opted to close the Manteca store when the electronics chain was forced to scale back its operations three years ago.

“The Manteca store from what we were told was doing quite good, actually better than they anticipated,” Smail said. “The problem was they had to close stores. They looked at the market and there were stores in Tracy, Modesto, Stockton, and Riverbank that could all serve Manteca customers.”

Closing any of the other stores, Smail noted, would have put significantly more consumers out of close proximity to a Best Buy location.

“The best a city can do is to make it attractive and as easy as possible for a retailer or restaurant to locate here,” Smail said. “It’s up to the business to make the decision.”

Even so, a lot of people criticize the city staff and elected leaders for not going after the right restaurants.

“It’s market driven,” Weatherford said of the decision making process. “The city has little to do with it.”

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