Is a 500-room Great Wolf Resort Lodge worth howling about for Manteca?
The answer in terms of environmental and economic impacts could come as early as June 2.
That’s when a series of documents that need the blessing of elected municipal leaders is tentatively scheduled for City Council review. Approval of the documents that include an environmental impact report, a financial analysis and a developer’s agreement would clear the way for the $139 million project on 30 acres currently owned by the city just west of Costco along the 120 Bypass.
The Great Wolf project will be discussed by the council at their Jan. 20 meeting for the purpose of extending a non-binding memorandum of understanding.
The current MOU was adopted last January before developers put up $300,000 to pay for the city’s cost of conducting environmental studies and a project specific financial analysis.
At the same time last year the council extended an exclusive negotiating agreement between the city and McWhinney Development along with Manteca Development Group through Jan. 31, 2015 with the city manager having the option of extending it for 30 days if needed. That exclusive negotiating agreement is expected to be extended as well on Jan. 20.
City Manager Karen McLaughlin on Monday said McWhinney is still pushing for Manteca as their second Great Wolf Resort in California.
The documents reference to the possibility of leasing the 30 acres owned by the city just west of Costco along the 120 Bypass to McWhinney for 99 years.
Manteca is currently in negotiations with Colorado-based McWhinney Development to build a 500-room resort hotel encompassing 290,000 square feet, an 85,000-square-foot indoor water park, 20,000-square-foot conference center and public parking.
A future expansion is envisioned that would add 200 more rooms as well as a 76,000-square-foot addition to the water park and double the size of the conference center.
The first part of the Great Wolf project represents a $139 million investment. Great Wolf projects a $9.4 million annual payroll with 414 permanent jobs and 156 part-time jobs. They also expect 400,000 annual visitors.
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Project would generate $6.5 million a year in taxes
In a financial analysis document delivered on Nov. 21, 2013 by MuniCap Inc. — a firm specializing in public financing – a 5 percent private lodging tax would generate $2.3 million a year using 2019 as the base year. That is in addition to $4.2 million projected from the basic 9 percent transit occupancy room tax, the city’s share of property taxes and its cut of general sales tax connected directly with the resort project.
An estimated $2 million would be generated in 2019 that would be in excess of annual payments. The type of bonds is critical to the deal as well. Of that, $1.4 million would flow into municipal coffers.
Manteca is insisting on certificates of participation (COPS) to finance improvements associated with the actual building of the resort. That means the city will have no responsibility for the repayment of the COPs other than from the increase in tax revenues provided by the Great Wolf Lodge. If the resort fails to generate the room tax, sales tax and property tax isn’t large enough the city is not on the hook to make up the difference.
While that increases the risk to those who purchase the COPs, the appeal is the income tax exemption on interest that the COPs carry. Over the life of the 30-year payment of the $30 million for municipal improvements needs to make the site ready for development including streets as well as pipe for sewer, water, and storm service, the holders of the COPs would collect $46 million in tax-free interest on top of $30 million in principal.
Great Wolf also intends to level a private lodging tax of 5 percent to finance bonds for a Community Facilities District for site improvements directly related to the resort project. That is designed to cover about $23 million worth of on-site infrastructure.
The CDF would generate $600,000 in revenue in 2019 beyond the debt repayment.
That means $1.4 million is the number Manteca leaders are working with to determine by early 2015 whether Great Wolf is something that they want to see go on the 30 acres the city owns. That is what would be left over after the city room taxes, sales taxes and property taxes generated by Great Wolf that Manteca could use for other purposes.
The $1.4 million surplus projected in 2019 would grow to $2.5 million annually by 2029, $3.6 million annually by 2030 and $4.2 million the year the bonds are paid off in 2044. Then in 2045 Manteca would receive a projected $7.1 million a year from room, sales, and property taxes connected specifically with the Great Wolf resort.
That is in addition to $81,000 a year starting in 2019 in Measure M sales tax generated by Great Wolf guests that could not be used for bond repayments and must be spent on public safety personnel. That represents s either one police officer or one firefighter,
The scenario assumes McWhinney builds a 500-room resort hotel that maintains 71.1 percent occupancy.