Colorado-based McWhinney Corporation wants a Northern California Great Wolf Lodge resort location that makes sense financially.
The City of Manteca has 140 acres of municipal property they want put back on property tax rolls in such a manner that maximizes revenue for expanding police and fire services and doesn’t put the city at financial risk.
Against that backdrop, the City Council unanimously agreed Tuesday to step up efforts to try and secure what could be a 400-room resort hotel with a 75,000-square-foot indoor water park plus conference center by entering into an exclusive negotiating agreement with McWhinney. It supersedes s a previous negotiating agreement entered into 18 months ago directly with Great Wolf.
Great Wolf will now serve as a managing partner while McWhinney - with a number of large scale Colorado investments - will be the developer.
The pay day for the city ultimately could be $4 million annually in additional room taxes, 414 permanent jobs and 156 part-time jobs, 400,000 yearly visitors, 1,000 construction jobs, and cement Manteca as a legitimate tourist attraction.
The agreement immediately opens the door for more intense scrutiny of costs the city and McWhinney would incurr. That means Marshall Linn of the Urban Futures public finance services and bond administration firm who has advised Manteca on the financial nuances of project such as the wastewater treatment plant, surface water treatment plan, Orchard Valley, Big League Dreams, Spreckels park redevelopment and other major initiatives over the past 30 years will start more intense number crunching. His work will also include vetting various financing scenarios to make the project work.
One thing those scenarios will not include is putting current sources of municipal money into - or putting Manteca at risk - for the Great Wolf private sector venture. Instead, municipal funds will be utilized to develop the infrastructure in the public right of way for the future extension of Daniels Street to open up 140 acres of municipal owned land between the wastewater treatment plant and the 120 Bypass just east of McKinley Avenue for development.
Linn said the city essentially has the money on hands it needs with $45 million of unspent redevelopment agency bond proceeds that the state will be returning to the city for economic development purposes
McWhinney, however, is seeking financial assistance for the project that was estimated to go as high as $200 million when a 600-room hotel was on the table.
Among public financing options Linn said could possibly work include:
• Community facilities district: A CFD would float bonds in turn secured by revenue from a specific benefit area which in this case would be the 35 acres immediately west of Costco that McWhinney seeks to acquire for the resort. The bonds would be secured by the Great Wolf Resort improvements. If the resort fails for some reason, the lenders would repossess the Great Wolf complex leaving the city whole. A similar arrangement was approved for The Promenade Shops at Orchard Valley anchored by Bass Pro Shops.
• A mini redevelopment agency. The state, after doing away with RDA, created a mechanism that allows local government to effectively cerate a mini-RDA where the city’s share of property tax from a specific area’s improvements financed by bonds would go to pay the money back. The big difference is such a mechanism does not divert future property taxes that belong to other districts such as schools and instead it goes to the agency entitled to receive them whether it is schools, fire districts, irrigation districts or the county. The property taxes - that would have gone to the city - would secure such bonds.
• Special transit occupancy or motel taxes: A special taxing zone with a 15 percent motel tax as opposed to the current 10 percent motel room tax that applies elsewhere in the city and would not be changed. This at one point was estimated to be able to generate at least $4 million a year. Bonds would be secured only by the taxes generated within the special district via room taxes.
Elected leaders, though, have made it clear they want an option that not only protects the city but also can generate a new and substantial source of revenue to fund city services by essentially taxing visitors.
Should a CFD or mini-RDA work for McWhinney’s need and the motel tax was kept unencumbered the city could potentially generate 25 percent of its existing general fund budget to run the city in a single year from Great Wolf. In public safety personnel equivalents of police officers and firefighters, that comes to at least 30 positions that could be funded annually if the numbers pan out.