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Miracle on the 120 Bypass
Manteca sales up 7.6% while other cities tank
Bass Pro Shops is leading the Manteca taxable sales miracle. - photo by HIME ROMERO
Call it the “Miracle on the 120 Bypass.”

City after city in California experienced significant drops in taxable sales — often in the double digits — in July, August, and September of this year compared to the same period in 2008.

It was the same in San Joaquin County with one big exception – Manteca.
While taxable sales in neighboring cities such as Stockton plunged 18.6 percent and in Tracy 9.8 percent they shot up 7.6 percent in Manteca.

It happened despite Mervyn’s going out of business and two new car dealers closing – Manteca Dodge and Sexton Chevrolet – as well as other vehicle sales dropping off significantly.

How did it happen?

Five words: Bass Pro Shops and Costco.

Bass Pro Shops, which has already attracted more than 2 million visitors this year, is drawing in money from a 100-mile radius. Costco essentially stopped a major bleed of Manteca consumer dollars to the warehouse chain’s stores in Modesto and Tracy and has also pulled customers in from neighboring cities as well.

Bass Pro Shops and Costco were two highly criticized deals made possible by a limited sales tax sharing plan pieced together by the City Council under the leadership of Mayor Willie Weatherford.

“We were fortunate to have a council that understood the importance of changing the way we did business in Manteca and to rely on something else besides property taxes.” Weatherford said.

As for those who believe the deals with big mistakes and would only reduce municipal sales tax receipts, Weatherford said, “the numbers don’t lie.”

Bass Pro Shops and Costco aren’t the only success stories along the Highway 120 Bypass. Both Kohl’s as well as Ross Dress for Less are exceeding sales projections for their Manteca stores.

The strong retail market has allowed Kitchell – the developers of Stadium Retail Center – to secure a major fabric retailer to fill the space vacated by Circuit City. That store is expected to open by the second quarter. They have also obtained another major national clothing retailer that will also open in the coming months.

Meanwhile, work is underway on the Lifestyle Outlets at Manteca that will open sometime in mid-2010 between Bass Pro Shops and JC Penney. The outlets, coupled with Bass Pro Shops and the 16-screen Kerasotes Showplace Theatre, are expected to provide Manteca with a major jump in taxable retail sales.

Manteca also aggressively took steps to retain B.R. Funsten – one of the city’s top 10 generators of taxable sales through its showroom at its flooring products distribution center in the Manteca Industrial Park. After working with the city and getting an expedited approval and construction process, B.R. Funsten abandoned plans to move to Stockton and expanded instead in Manteca to retain 120 jobs plus the sales tax receipts.

Manteca’s 7.6 percent increase of taxable sales contrasts with California as a whole that saw a 14.8 percent drop in the third quarter compared to the same time period in 2008.

Manteca is also faring significantly better than the rest of the state and county when it comes to taxable sales in the first two quarters of the current fiscal year compared to the same time last fiscal year.

Manteca’s sales tax after six months came to $3,810,985 compared to $3,856,595 for the previous year. While that $45,610 decline in tax sales is a 2.1 percent drop it was much better than the statewide drop of 17.8 percent. It also was much better than anywhere in San Joaquin County with the next best performing city – Tracy – coming in with a 17.6 percent drop.
Ripon taxable sales for the partial fiscal year comparison dropped 39.9 percent, Escalon 29.4 percent, Lathrop 29.1 percent, Lodi 21.3 percent, and Stockton 20 percent.

In full year comparisons using the third quarter as the final quarter Manteca dropped 2.2 percent. Again, the state was such worse dropping 15.7 percent. San Joaquin County saw Ripon drop 38.7 percent, Escalon 30.9 percent, Tracy 19.2 percent, Lodi 20.2 percent, Stockton 16.6 percent, and Lathrop 16.2 percent.

Sales taxes are critical for cities as they represent one of the top two sources of revenue to operate the general fund. Property tax is the other.

If the trend holds and property valuation remains relatively close to what it was on Jan. 1, 2009 Manteca’s projected deficit for the fiscal year starting July 1 could be less than $1 million. That assumes the state doesn’t take any more money.