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Manteca’s retail future: City makes its own luck

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POSTED January 17, 2010 1:10 a.m.
Manteca made a 35-year sales tax sharing deal to make it possible for Poag & McEwen to build The Promenade Shops at Orchard Valley to land the 900-pound gorilla of 100-mile radius retailing – Bass Pro Shops.

That means giving up 55 percent of the local sales tax generated by all stores at the center – up to $1 million a year – for 35 years. It landed Bass Pro Shops. Manteca wouldn’t have gotten the Disneyland of outdoor retailing if it didn’t have a private sector development in place that could snag it.

However, the odds are Manteca would eventually snag a JC Penney, Best Buy, and the usual retailers that locate in lifestyle centers or malls. So in order to catch Bass Pro Shops, the city had to forgo 55 percent sales tax through the year 2044 from stores though they’d probably get eventually as the population base grows.

That isn’t the case anymore due to what could best be described as luck and timing.

Poag & McEwen has leased Craig Realty the in-line space that has been vacant for close to a year plus three new building under construction. Craig Realty – which specializes in upscale outlet store centers – will end up with just less than 300,000 square feet of retail.

The odds previously were thin to none that Manteca would ever land outlet stores.

That means the sales tax from those outlet stores are in the same category of Bass Pro Shops. It represents retail sales Manteca never had a chance of securing until the sales tax deal was cut. That obviously isn’t the case with JC Penney or Best Buy. The odds are Manteca would have had a Best Buy in the next few years and possibly a JC Penney by mid-decade.

It gets better. AKF Development is in the process of developing more than 50 acres of retail to the west of Orchard Valley on the either side of South Union Road with Atherton Drive’s future extension cutting through the project.

Manteca will still attract retailers based on local market demographics as the city grows. The pull of the regional center anchored by Bass Pro Shops with the outlet stores will enhance Manteca’s appeal to retailers. But they can’t obviously locate in Orchard Valley and they also want to be as close as possible to the center. That’s where AKF’s Union Crossing enters the picture.

And none of the sales tax at Union Crossing will be split. There is also ample commercial between the Highway 120 Bypass and Atherton Drive between Union Road and Main Street that would appeal to retailers that like free-standing buildings or else for other centers to locate.

Such synergy can be seen in Vacaville around that city’s outlet stores. The outlets were built first and eventually the entire area became choked with retail shopping that often draws out-of-city shoppers who are there for the outlets.

Bass Pro Shops has also kept Manteca near the top of the list for retailers that are in financially stable shape and are looking to expand with the approaching economic upturn. Study after study has declared retailers that plan to expand are being more careful at picking locations with optimum pull. Bass Pro Shops has a 100-mile draw. Some of that may bring shoppers into the outlets. But more important, Bass Pro Shops with the outlets and the 16-screen Kerasotes Showplace Theatre is the real deal for a Northern San Joaquin Valley draw being at the bull’s eye of 1.2 million consumers in a 30-mile radius.

That is where Manteca will rack up the sales tax.

The first seven months of operations at Orchard Valley yielded $26.7 million in sales. Bass Pro Shops was open the entire time, Best Buy for two months, and JC Penney for six weeks.

That $26.7 million when divided by Manteca’s 67,000 residents reflects sales of $398.50 per capita.

It is obviously that every man, woman, and child in Manteca did not drop $398.50 each in seven months at Orchard Valley. The lion’s share of the money flowing into Orchard Valley is from outside of Manteca.

Add the potential for outlets and you understand why some cities think Manteca is lucky to be positioned as they are in terms of retail.

But then again, you make your own luck.

To contact Dennis Wyatt, e-mail dwyatt@mantecabulletin.com

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