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Another hotel-water park player?

Mayor wants Great Wolf assurances they are serious

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Another hotel-water park player?

The lobby of a Great Wolf Lodge hotel.

Photo contributed/

POSTED May 7, 2014 1:47 a.m.

McWhinney Development wants to invest $150 million in Manteca to build a 500-room hotel with an indoor waterpark.

That will require the city’s help putting in place a financing mechanism to pay for roughly $30 million in infrastructure to service the resort envisioned on city-owned property west of Costco.

How serious the Colorado-based firm that’s backed by the $161 billion worldwide holdings of the Apollo investment group is about the venture was called into question Tuesday night by Manteca Mayor Willie Weatherford.

Not only is he frustrated that the negotiations have dragged on for 42 months, but he said it “just rubs me the wrong way” that no representative from McWhinney was on hand Tuesday to speak in support or answer council questions on an extension of the exclusive negotiations pact with the city through June 30, 2016.

He also isn’t happy about reports that another developer is considering pursing a hotel and waterpark of its own on the Interstate 5 corridor within miles of the proposed Great Wolf site.

And while Weatherford made it clear he isn’t against the project although he is reserving final judgment until he sees financial numbers and land lease details, the mayor has concerns that foot dragging could put nearly four years of work to waste if another competitor beats Great Wolf to the punch.

That’s why he — as an elected official — wants reassurances in person from McWhinney representatives that they are still committed to moving forward before the council votes on the extension of the exclusive negotiating pact. The extension includes additional language that bars the city from entering into talks with any other developer for a waterpark/hotel and prevents McWhinney from entering talks for a waterpark/hotel resort with any municipality within a 90-mile radius of Manteca.

Steve DeBrum and Vince Hernandez — the two council members the mayor appointed several years ago to serve on the Great Wolf negotiating committee — both emphasized that McWhinney is earnest and committed. They each noted, however, the rest of the council isn’t privy to as many details as they are so they felt it would be appropriate to have a McWhinney representative address the council on the extension.

The council postponed voting on the extension until such a meeting could be arranged. City Manager Karen McLaughlin said she will try to make arrangements for the May 20 council meeting that takes place the day before McWhinney representatives are scheduled to participate in the groundbreaking ceremonies for a Great Wolf in Garden Grove in Southern California. 

“I believe in the project,” DeBrum said.

DeBrum said McWhinney representatives have indicated they want to break ground in Manteca before the end of the year.

That could happen given the environmental impact report would be finished in June and should complete the review process and be ready for potential adoption by the council this fall. McLaughlin noted the council can’t consider approving — or rejecting – a development agreement with McWhinney until the EIR process is complete.

She added the negotiations are continuing on the land lease, infrastructure financing, and development agreement while the EIR work is being done. McWhinney representatives were last in Manteca three weeks ago. They also are in contact with city staff three or four times a week by phone.

 “There’s been a lot of heavy lifting,” DeBrum said of the Great Wolf negotiations. “We’ve come a long way but there are still a lot of questions to answer.”

McLaughlin, in  response to a question from the mayor, said the elimination of the redevelopment agency threw a monkey wrench into the process several years ago since RDA funds at one point were going to help pay for infrastructure.

She added that the city staff wants to make sure that all legal requirements of the environmental review process are met before moving forward.

McLaughlin again emphasized that she has no intention of devising any deal that puts the city’s general fund at risk. 

The city manager noted that the city’s financial consultants as well as McWhinney are well aware of that position.

McWhinney is basing negotiations on a 290,000-square-foot hotel with 500 rooms – with a possible future expansion of 200 rooms – along with an 85,000-square-foot indoor water park and a 20,000-square-foot conference center. A possible expansion would add 79,000 square feet to the water park and double the size of the conference center.

McWhinney and the Apollo Group that acquired Great Wolf Resorts several years ago project a 71.1 percent occupancy rate as being reasonable and conservative.

Based on that, Manteca would have a positive cash flow of $1.4 million a year initially into its municipal coffers from room taxes, sales taxes and property taxes directly tied into Great Wolf after annual debt payments are made. At 71.1 percent occupancy, the city’s receipts keep escalating annually, reaching $3.6 million in 2030. Then in 2045, when the bonds are paid off, Manteca could see $7.1 million flowing into municipal coffers to help pay for everything from police and fire to parks.

McLaughlin in the past has stressed that Manteca has made it absolutely clear to McWhinney that it won’t put the taxpayers on the hook for even a penny of any bond debt connected with Great Wolf’s public infrastructure.

That way if the resort water park swims, Manteca will be in the money along with having helped create 414 permanent jobs and 156 part-time jobs with an annual payroll of $9.4 million and the overflow spending of 400,000 yearly visitors.

If it sinks, then Manteca is out nothing but it would have infrastructure for private sector use as well as a big private sector project that investors would make sure was put to some use so they could get their money back.

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