By allowing ads to appear on this site, you support the local businesses who, in turn, support great journalism.
If Great Wolf doesn’t open in 2021 City of Manteca will pocket $402K
wolf den
One of the specialty Wolf Den rooms with a separate area for kids.

Manteca will collect $402,000 from Great Wolf in 2021 even if the resort doesn’t open until a year from now.

That represents Manteca’s cut of the $1.87 million property bill Great Wolf is on the hook for including direct property tax and property tax for in lieu vehicle fees the state commandeered years ago.

At the same time how Manteca structured the deal with Great Wolf in a manner that avoided what Garden Grove did in Southern California means the city isn’t on the hook to pay for anything. Had Manteca devised a deal like Garden Grove the city’s general fund would be paying out hundreds of thousands today for the 500-room resort even though it has yet to open.

That’s because of the previous council’s refusal to have taxpayers on the hook for any incentive required to land the indoor water park.

The Garden Grove deal put that city’s taxpayers on the hook for a $42 million bond requiring annual principal and interest payments. It was floated to underwrite part of the $300 million 600-room hotel that was built in that city. In addition up to 80 percent of the room tax collected also is making its way back to Great Wolf. Those subsidies account for 23 percent of the overall Garden Grove project.

By contrast the room tax deal split Manteca negotiated subsidized 22.22 percent of the local resort.


Even if there was no room

tax revenue Manteca would

be ahead $524,000 annually

when Great Wolf is open


Even if the city did not collect a penny in room tax on the 500-room Great Wolf resort whose opening is being held at bay by the COVID-19 pandemic, the City of Manteca general fund will see an increase of $524,000 annually in net revenue when the water park is up and running.

That — just like the room tax revenue split — is based on a 74 percent occupancy rate.

Exhaustive analysis of the project contained in two key documents — the Great Wolf Economic Development Subsidy Report and the Great Wolf Economic Opportunity Report — counters claims by some at city hall that Manteca got a raw deal in dealing with Great Wolf. The studies that are required by state law before subsidies of any type can be granted a developer even if it is merely splitting tax revenue a project creates are the building blocks required to legally justify the development deal the city inked with Great Wolf.

The city will receive $661,000 in taxes annually of which $402,000 Manteca will collect in 2021 even if the resort doesn’t open. That’s because they are the property taxes and in lieu fees that will go to the city. The balance of the $661,000 reflects mostly $246,000 in sales tax Great Wolf won’t receive unless they have guests spend money in their restaurants and shops.

When the resort is up and running it will cost the city $238,000 annually in general fund expenses to serve it. That includes police services pegged at $109,000, fire services at $79,000 and road-related maintenance at $24,000.

That would leave a $524,000 annual net to the city’s general fund after expenses are factored in and without receiving a penny in room tax. It also excludes the annual generation of $123,000 in Measure M public safety tax that would almost cover the salary and benefits of an additional police officer.


Great Wolf is now

Manteca’s largest

property tax payer


There is a $524,000 annual net to the city before a penny of room tax is considered that reflects the fact even without their doors opening Great Wolf is now the largest taxpayer in Manteca with a property assessment of $186 million. That translates into an annual tax bill of $1.86 million of which $402,000 goes to the city. That includes $239,000 in direct property tax and $163,000 in property tax in lieu of vehicle fees that the state commandeered years ago.

All of the agreements with Great Wolf is based on the split of the 9 percent room tax that was in place at the time the deal was executed. The 9 percent number is repeatedly referenced. Voters, after the fact, hiked the room tax to 12 percent.

The agreement between Great Wolf and the city has the resort getting the first $2 million in revenue from the 9 percent room tax for the first 25 years. After that, certain costs are paid back including the developer for specific costs and the city for growth fees the resort incurred and paying for the 29 acres the city sold to Great Wolf.

Those fees come out of a 75-25 split of the 9 percent room tax receipts beyond the initial $2 million that goes to Great Wolf.

Manteca’s 25 percent split after the third year and first full year of operation when other costs are paid off first will come to $320,000 based only on the 9 percent room tax. All of that money is earmarked either to pay for the land or pay down growth fees tied to the Great Wolf project.

It isn’t until the third year of the deal that represents the first full year operating as city outlays—  delayed payment of growth fees etc. — start to be paid back that the city receives $332,557 in unencumbered revenue from the room tax.

Non-encumbered room tax going to the city from the 9 percent doesn’t start flowing until the fifth year when it comes to $309,000. By the seventh year which is the fifth year of operation it is at $711,000. It starts climbing substantially after that as the growth fees due to the city and land costs are paid off.

After the 10th year, the room tax split goes to 50-50. The split ends after 25 years when all of the room tax goes to the city.

Current city administration is correct in contending the Great Wolf deal as structured per se will only net Manteca $332,557 after the first full year from room tax alone. That description isn’t accurate, however, as that is money due specific growth fee accounts as well as payment for the 29 acres from the wastewater treatment plant site used to build Great Wolf. As such, it will not simply flow into the general fund.


Overall, Manteca’s general

fund will see a net gain of

$1.9M during first full year


It is more accurate, based on projections, that Manteca will have a net gain of $524,000 in the general fund after expenses such as police and fire in the first year. That excludes the $123,000 in public safety tax the city will collect. The net general fund gain when the first room tax that goes to the city isn’t already earmarked will be in excess of $1.2 million in the fifth year of operation.

But once the additional 3 percent of room tax being collected that is outside of the Great Wolf agreement, the city after the first full year of operating will receive $1.4 million in additional room taxes.

Coupled with the next gain from sales and property taxes after deducting general fund expenses to service the Great Wolf resort, Manteca will have over $1.9 million flowing into the general fund that isn’t earmarked to pay growth funds.

That $1.4 million generated from the additional 3 percent sales tax is never touched by Great Wolf.

The current city leadership has questioned whether the current contract city attorney firm that approved the deal in the first place was making the correct legal call in allowing the city to sell 29 acres for $675,000 that they bought originally for $20,200 in 1971 that had a market value of $6,750,000 at the time of its sale to Great Wolf.


If they can find a legal

opinion to counter advice

already received it could

also undermine the FEZ


The city’s attorney made a finding pursuant to California Government Code 52201 that it was legal to sell the land for $675,000. That’s because state law allows the conveyance off land by a government entity for less than fair market value of it can generate substantial economic and fiscal benefits for the city. It is the same statute used by cities up and down the state for similar deals.

In the case of Manteca, it was determined Great Wolf in its first 30 years of operation would generate $32.3 million in net income to the city over 30 years after all municipal costs are factored in including police and fire protection.

The determination was made prior to voters in increasing the room tax. That now means Manteca will see a net $74.3 million or an average of $2.4 million a year for the next 30 years in exchange for selling the land at 10 percent of its market value or for $5.485 million less to Great Wolf.

If the current city management succeeds at finding a legal opinion that goes counter to what their current legal firm that is also now serving as the contract day-to-day city attorney after John Brinton retired provided regarding the Great Wolf deal, the city would likely have to increase the money from their share of the 9 percent room tax for costs they encumbered to pay off the land.

Whether that money goes to the general fund or the wastewater enterprise account is another issue. If it can legally go to the general fund then the city will simply be diverting money back to itself to cover $5.8 million of value gain on an original $20,200 investment.

And I’d they do happen to shop around and find a legal opinion that says the city can’t sell the land for less than market value because it doesn’t meet the legal requirements of the state code, it could also put in jeopardy any deals they would like to make in the future to use discounted land prices as an incentive to lure private sector investors to develop the 100-acre family entertainment bookended by Great Wolf and the Big League Dreams sports complex.

The delayed opening means room tax reimbursing the city for growth impacts Great Wolf creates won’t be flowing into city coffers sooner instead of later. However, with Great Wolf not yet open there are no growth-related impacts occurring.

Great Wolf’s opening is set for March 23. It is the fourth opening date after pandemic restrictions forced previous postponements.


To contact Dennis Wyatt, email