Three of the four biggest retailers when 2019 rolls around along the 120 Bypass will have been snared with the help of sales tax sharing deals aimed at preventing regional retailers that draw from a 20 to 100 mile radius from locating in Lathrop, Tracy, Modesto, or Stockton.
The latest deal was unanimously approved Tuesday by the Manteca City Council to secure a 130,000-square-foot Living Spaces Furniture showroom and warehouse along the extension of Atherton Drive that is now under construction southwest of the Union Road and 120 Bypass interchange.
Mayor Steve DeBrum noted the deal allowed Manteca to beat a neighboring city in landing the furniture retailer whose representatives say they draw from a 50-mile radius. That means Manteca — based on projected annual sales of $35 million — will end up splitting an estimated $350,000 in local sales tax. The deal call for the split to be 50-50 of whatever is actually generated — whether it is annually higher or lower than $350,000 for 10 years or $3 million, whichever is reached first.
Based on the projections, Manteca while the split is in effect would receive $175,000 in general fund sales tax, $20,000 in property tax, and $175,000 in restricted Measure M public safety tax. Manteca’s leaders point out the $370,000 a year the city will receive while the terms of the split are in effect is $375,000 that would have been lost to another city. After the terms are fulfilled, Manteca would receive all of the sales tax.
It is somewhat different than a sales tax split deal with Costco expected to be done by 2020 that covered the entire tab for the wholesale retailer’s cost of building a store in Manteca. The deal that brought Bass Pro Shops — a retailer with a 100-mile regional draw — to Manteca was actually made with the developer of The Promenade Shops at Orchard Valley. It is a 35-year sales tax split capped at $35 million. However, if the center doesn’t generate that much through the split after 35 years, the city is not obligated to make up the difference.
While they did not get a sales tax deal, rare is any retailer or service along the 120 Bypass that didn’t benefit directly or indirectly from some type of city investment related directly to the development of their site.
Redevelopment agency funds made it possible for the developer of the Mission Ridge Shopping Center anchored by Walmart and Safeway to secure needed land. Walmart — along with Costco and Bass Pro Shops — are expected to be the three largest generators of sales tax along the 120 Bypass by the end of 2019.
The RDA put in place the $10 million plus extension of Daniels Street west of Airport Way and needed infrastructure that allowed the Stadium Retail Center anchored by Kohl’s to be built.
The Orchard Valley sales split essentially paved the way for JC Penney and other concerns in that center.
The only businesses along the 120 Bypass that did not receive direct or indirect municipal assistance are Sizzler’s, McDonald’s, AM/PM Arco station, and the new gas station/convenience store being built on the southeast side of the Main Street/120 Bypass interchange.
Great Wolf Lodge — a 500-room resort and indoor water park expected to break ground this summer west of Costco — was snared with a 25-year hotel room tax split.
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