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500-room hotel key to municipal room tax receipts going from $990,000 to $7.7 million over 10 years
GREAT WOLF: HOWLING MANTECA SUCCESS STORY
great wolf
Guests enjoy one of the many features of the Great Wolf indoor water park.

Manteca is riding the wave of change in terms of how millennial parents vacation as a family.

The change?

They’ve ditched one big trip a year in favor of a series of smaller trips that are a drive of four hours or less away from home.

And in terms of the destinations leading the charge is Great Wolf Resort.

The indoor water park now has 20 locations including its 500-room hotel in Manteca.

The Chicago-based firm is opening additional resorts this year in the Houston area and Naples in Florida.

When a 23rd location opens in Connecticut in 2025, Great Wolf will have a resort within a four hour driving distance of 90 percent of the country’s 333 million residents.

CoStar — a firm that tracks real estate related data — reports Great Wolf how has 8,700 rooms.

That’s more than double the 4,300 the resort firm had a decade ago in 2014.

Occupancy rate is also up.

It’s gone up from the 65 percent room occupancy rate that was cited in an analysis of Great Wolf by an independent firm leading up to the City Council inking a deal to bring Great Wolf to Manteca in 2018.

It is now hovering around 80 percent.

It wasn’t by chance Great Wolf ended up in Manteca.

It was part of a methodical effort by the council at the time to get in place long-term solutions to help Manteca weather the changing economic landscape.

While vacations as a whole take a hit during economic slumps, “staycations” — trips within an easy driving distance — typically benefit.

It was underscored in the 209 region during the Great Recession.

Many destination ski resorts were hit hard while resorts like Bear Valley in the western Seirra in Alpine County that were in drivable distance from major metro areas such as San Jose and San Francisco had brisk bookings.

Originally, Manteca leaders were courting traditional outdoor waterparks to build on city land near the Big League Dreams sports complex.

When the word got out, there were three companies interested in locating outdoor waterslides in Manteca.
But when Manteca leaders got wind of indoor water parks — a concept foreign to most people in California at the time — and examined the economic impact they had on communities, they shifted gears.

An indoor waterpark resort provided pluses the city was looking for:

*It’s a business that can’t be supplanted by the Internet.

*It performs fairly well in recessions.

*It generates jobs on a large scale, especially in a per square foot comparisons with distribution centers.

*The jobs are a combination of entry level and those that paid for experience.

*It does not require heavy truck traffic.

*Its peak traffic demand — people  driving to and from the resort — doesn’t coincide with heavy commute times in the morning and afternoon.

*It would significantly raise Manteca’s profile.

*It would provide a way for Manteca to collect taxes to help pay for municipal services essentially without tapping the pockets of local residents as almost all guests are non-city residents.

The city funneled redevelopment agency money into extending Daniels Street and infrastructure to McKinley Avenue to make city owned property marketable for a waterpark resort and future ventures that would fit well with a family entertainment zone.

Equally important, Manteca invested in a time consuming and costly environmental approval process for a 500-room indoor waterpark project.

That pre-approved EIR was a big reason why — when Great Wolf was ready to locate in Northern California — other suitors such as Brentwood and Gilroy were left in the dust.

Great Wolf is the main reason why Manteca’s room tax receipts have gone up 6.7 times since 2014 when they were at $990,000 to $7.7 million annually.

That figure is a little misleading.

It’s because of a 25-year room tax sharing agreement Manteca entered into with Great Wolf to seal the deal.

The city each year collects 25 percent off the top, then Great Wolf gets the next $2 million.

Third on the list is an annual payment for 10 years ($67,000) cover the purchase of the land.

Next to the $450,995 in deferred growth fees Manteca receives annually over 20 years.

After that, for the first 10 years, Great Wolf receives 75 percent of the remaining room tax and the city 25 percent,

That split switches to  a 50-50 split in the remaining 15 years.

Once 25 years has passed, all room tax goes to the city.

In the current fiscal year

 that translated into $3,598,537 for Great Wolf and $2,018,787 for the city.

The 12 percent room tax means Great Wolf is generating $5.6 million of the $7.7 million the city is collecting overall.

Unlike other Great Wolf deals such as in Graden Grove in Southern California where the city essentially help ensures Great Wolf covers development costs by putting the general fund up for collateral, Manteca taxpayers were never put on the hook.

Instead, for 25 years they receive  a smaller but growing share of room taxes that would not have been collected if Great Wolf did not build here.

As an unexpected bonus, the state mandate that prevented Great Wolf from opening when it was completed in 2020 and sat for much of a year unused due to the pandemic, did not impact municipal coffers as it did in Garden Grove that still had to pay money toward Great Wolf’s payment of construction loans.

Room taxes now account for 10 percent of the City of Manteca’s general fund revenue.

It is behind property taxes at 39 percent and sales tax at 26 percent.

Overall, Manteca is expected to have $73.8 million in general fund revenue during the fiscal year starting July 1.to operate day-today municipal services such as police and fire protection, street upkeep and park maintenance.

 

To contact Dennis Wyatt, email dwaytt@mantecabulletin.com