The Manteca Unified school board has upped the ante for the Manteca City Council’s drive to gain approval of the California Legislature to allow Inner City Action to purchase the Qualex building on Industrial Park Drive for $1 for the purpose of housing a permanent homeless resource center.

The bottom line would require the council to agree to forfeit at least $750,804 from the city’s share of the sale of two other RDA auction properties not tied to a housing bond to keep the school district whole if the state doesn’t backfill the money Manteca Unified would be forgoing to make the Qualex sale work. The fair market value of the Qualex property has been pegged at $1.5 million. Given Manteca Unified is entitled to 50.05 percent of the proceeds that comes to $750,804. 

The city needs to get the taxing entities eligible to receive a proportional split of sale at auction of the property at 555 Industrial Park Drive as purchased by the Manteca Redevelopment Agency to agree to forgo their share of a sale to the highest bidder. State law dismantling redevelopment agencies require property held by a RDA that wasn’t connected to a viable project at the time of the disbanding of agencies to be sold and the proceeds split. In the case of the Manteca RDA this includes 10 taxing entities including the City of Manteca.

The Manteca Unified board on Tuesday approved the proposal school officials have described as a “win-win situation” for the district and the city.

The gem property at the upcoming auction of RDA holdings is located on Daniels Street across from the Stadium Retail Center and Big League Dreams and down the street from where the 500-room Great Wolf indoor waterpark resort is being built.

Some commercial real estate brokers believe the undeveloped property could fetch as much as $4 million at auction, if that happens, city’s 14.78 percent share of that sale would come to $600,000. If the third parcel sells for at last $1 million the city would be entitled to another $150,000 leaving them with just enough to cover the Qualex proceeds the school district stands to lose. The City of Manteca would get the money back only if the state makes up for the loss from the Qualex action.

Given that is a dicey proposition the City of Manteca could end up forfeiting $971,000 — covering the $750,804 the district would be giving up and the $221,752 the city would be entitled based on the market value of Qualex.

The district — if the Daniels Street and Qualex properties sold at the noted values at an auction — would realize $2.7 million.

District Superintendent Clark Burke noted the school board’s policy has been to use one-time money for one-time expenditures. In the past the board has committed its share of “pass through funds” from the RDA to school construction projects. The school district is in need of funds to help situate Manteca High and other district campuses within the City of Manteca to accommodate enrollment growth from more than 8,000 housing units that the city has already approved.

Also on Tuesday City Manager Tim Ogden indicated the Delta College trustees were in support of the Manteca plan and directed their staff to prepare a formal resolution to that effect. That represents $96,601 of the $1.5 million. The board of the Reclamation District 17 agreed to forgo its $24 share. 

The San Joaquin Mosquito & Vector Control District declined to support the city’s effort. They are entitled to $10,022 from the Qualex sale based on a $1.5 million market value.

The South San Joaquin Irrigation District split 2-2 and did not give any indication they would reconsider. The SSJID share is $77,420.

Yet to take a position is the San Joaquin County Board of Supervisors ($291,313); San Joaquin County Office of Education ($25,115), Stockton-San Joaquin Library System ($24,467), and the San Joaquin County Flood Control Agency ($2,302).

Manteca Unified

statement text

The following is the complete of the statement regarding the Manteca Unified board’s position:

“(Board) President (Stephen) Schluer announced that Manteca Unified School District supports the City’s important efforts to address the homeless crisis in our community and the District is certainly a willing partner in the City’s initiatives.  The District, however, is also compelled to allocate its own resources towards assisting all children, including homeless attending the District’s schools.  

“These efforts including counseling initiatives and training our teachers and staff about the importance of how to interact with children experiencing the social emotional trauma of homelessness. For this reason, the District must ensure that it is allocating its resources to the children attending the District first, before allowing those resources to be used by our City partner or other local agencies for other initiatives.  

“The City has publicly assured us that the District will be compensated by the State for any reduced revenue the District would forfeit by permitting its 50.05% interest in the Qualex property to be sold at below market value; we have not verified this at this point.  However, the District has not received that assurance directly from the State.  Consequently, the District’s Board of Trustees has authorized the Superintendent to engage with City leadership to organize a win-win scenario for both the City and the District. The City has a 15% interest in several Successor Agency assets.  

“The District proposes that the City enter into a Memorandum of Understanding or “MOU” with the District wherein the City will agree to remit to the District all City revenue from the sale of these other assets until such time as the District receives its fair market value of a Qualex sale on the open market or until such time that the District is made whole by the State.  If the District later receives those full true-up funds from the State related to Qualex, it will remit the necessary portion of those funds to the City so that the District receives the fair market value for Qualex, but not more.  

“The point of this effort is to ensure that the City can implement its important initiative on homelessness, but at the same time, the District timely receives the full amount of the revenue it needs from the sale of Successor Agency assets to support its core mission – the education and welfare of the students of the Manteca USD – a mission that cannot wait for an uncertain reimbursement from the State.”

To contact Dennis Wyatt, email dwyatt@mantecabulletin.com