Land once attached to the wastewater treatment plant could end up being the most potent tool at the City of Manteca’s disposal to help generate more tax revenue and jobs.
The economic potential was reaffirmed in an additional legal review by an independent counsel concerning the legality of the deal that made it possible to sell Great Wolf almost 30 city-owned acres at a tenth of their appraised market value.
The $675,000 sale price as opposed to the market value of $6.75 million helped leverage a deal that will generate $32.3 million to the city’s coffers over the 30-year period as well as generate 500 plus direct jobs. Once voters in 2018 increased the city’s hotel room tax to 12 percent, it increased the bottom line to the city over the indoor water park resort’s first three decades of operation from $32.3 million to $74.3 million or an average of $2.4 million a year.
Great Wolf is now scheduled to open March 22.
Land deal legal under
California state law
The deal was legal pursuant to California Government Code 52201. The state law allows the conveyance of land by a government entity for less than fair market value if it can generate substantial economic and fiscal impacts for a city. It is the same statute cities up and down the state have used for similar deals.
The city has more than 80 acres purchased in 1966 for potential treated wastewater spray fields that envisioned for the family entertainment zone (FEZ) bookended by Great Wolf and the city-owned Big League dreams sports complex. The average cost per acre was $700 an acre.
Based on the assessed value of the price per acre of the Great Wolf site, an acre site for a restaurant or a climbing gym could have a market value of $225,000 an acre. A proportional deal based on job and sales tax generation means the city could sell an acre for $22,500 to help seal a deal for a business to locate in the FEZ where it would benefit not only from the 1 million annual projected visitors to Great Wolf and BLD, but also the 900,000 plus consumers within a 30-minute drive.
The city, meanwhile, would have a hard cash return of $21,800 per acre based on the 1966 purchase price of $700 an acre.
Similar job and sales generation plans are used by cities such as Tracy to pay cash incentives to new firms that open with the more jobs and sales tax they generate, the higher the incentive. The big difference is such plans are citywide and apply to everything from restaurants to distribution centers. In Manteca, the land incentive would be tied directly to FEZ development and only for specific entities that fit into the FEZ theme.
The City of Manteca used similar criteria using the economic muscle of the now defunct redevelopment agency to justify upfront assistance to pay down infrastructure or to make loans for actual construction of commercial buildings that were forgiven after “x” amount of years if agreed upon sales tax and job generation goals were met.
Manteca Development Group, led by local developed Bill Filios, is devising a master plan for the FEZ working with the city at no cost. The arrangement allows for them to get paid if and when they secure users for the FEZ.
That essentially makes the developers an extension of the city’s economic development effort that won’t get paid unless they produce tangible, concrete results. As such it eliminates financial risks to the city between devising a master plan, marketing the property, and handling the bulk of negotiations. The only way the developers get a return on their investment of time and money is to produce results.
The backbone for the FEZ was put in place as part of the $10.5 million that Manteca invested in extending Daniels Street to McKinley Avenue. The investment of residual RDA bond sale receipts was the only money Manteca spent to make the Great Wolf deal possible.
In doing so not only was the main access street built to open FEZ to development but the backbone of infrastructure such as sewer, water, storm, and wastewater lines as well as communication lines needed to develop the rest of the 80 acres are in place.
The Daniels Street also put in place three cross streets — all stubbed except for those accessing Great Wolf — with traffic signals.
Endless potential
seen for Manteca FEZ
The FEZ is sign as a long-term way of strengthening the city’s economy and municipal tax receipts needed to pay for city services.
The FEZ is where Manteca believes the potential is endless for everything from restaurants, venues such as laser tag, golf driving ranging, and go-carts to climbing gyms and more.
The goal is to aim for growing family recreation market dollars that can’t be “disrupted” by the movement of business to the Internet by building off two draws.
The first is the 1 million annual visitors the existing Big League Dreams and Great Wolf will draw.
The second is the primary and secondary “stay-at-home” recreation market that has 2.5 million people.
Of those consumers, 900,000 are within a 30-minute drive of the FEZ site along the 120 Bypass that is today accessed via Airport Way and will be accessed by the new McKinley Avenue interchange sometime this decade. Manteca happens to the center of a triangle with Modesto, Stockton, and Tracy on various points.
Another 1.6 million people are within 30 to 60 minutes and reaches as far north as Elk Grove, as far east as Pleasanton, and as far south as Merced.
The secondary market that has an additional 9.5 million consumers within one to two hours and encompasses San Francisco, San Jose, Oakland, Santa Cruz, Sacramento, Roseville, Yuba City, Napa, Vacaville Fresno and points in between those
The potential of tapping into that market was outlined in a 2017 conducted by Entertainment+Culture Advisors (ECA) based in Los Angeles and Hong Kong.
Catering to the primary market is considered critical as it is a more solid base for supporting such endeavors during the week plus is much more likely to produce repeat customers.
18.5 million people
FEZ could draw from
Other opportunities the ECA explored are adventure attractions action sports parks, and participatory sports facilities.
The ECA study noted when the primary and secondary markets are combined with the overnight tourist market based on hotel occupancies from Turlock to Lodi and west to Tracy, there are 15.2 million possible consumers the FEZ could target. The overnight tourist market includes 1.8 million leisure tourists and 1.5 million business tourists.
The average household income based in 2016 data of those within 30 minutes of the FEZ site is $71,268 while it is $97,009 for consumers 30 to 60 minutes away. That compares to $99,536 in Oakland and $128,985 in San Jose.
The average age within 30 minutes is 33 years while it is 35.8 minutes within 30 to 60 minutes. That compares to 38 years in both Oakland and San Jose.
Of the households with 30 minutes, 45 percent of the households have children while 43 percent have children within 30 to 60 minutes. That compares to 31 percent in Oakland and 36 percent in San Jose.
Households within 60 minutes of the FEZ site plus those in Oakland and San Jose spend 4 percent of their household budget on entertainment and recreation.
It should be noted it took 12 years from the time Great Wolf first approached Manteca about siting an indoor water park here to get the ball rolling with the initial study until construction was completed last year.
The BLD complex — owned by the city and leased by a Southern California firm — took eight years from when the first study was done until the first pitch was thrown.
To contact Dennis Wyatt, email dwyatt@mantecabulletin.com
