Manteca elected leaders may be perplexed as to why Tracy is landing jobs but NBC’s Today Show isn’t.
The NBC News segment broadcast July 26 focused on Tracy as one of the nation’s communities riding the e-commerce wave. It quotes Tracy Mayor Robert Rickman as saying Tracy is “a fulfillment center boomtown.”
The broadcast noted, “Amazon, Costco, Crate and Barrel, FedEx, Medline, Safeway, Smuckers, and U.S. Cold Storage have all set up shop. Tracy town leaders have been planning for years to transform the farmland into a launch pad for the new e-commerce economy by annexing underutilized land for redevelopment, new infrastructure, tax rebates, tax deferment, and other incentives.
“So far, it’s paying off. Since 2014, net job growth is at over 6,000; sales tax revenue has gone up 35 percent; and property tax revenues are up, said Rickman. The town’s population has almost doubled, going from 50,000 in 2000 to 90,000 this year. New hotels, roads, restaurants, and a sports center for the town are being built.”
The latest employers preparing to locate in Tracy are Zinus Furniture and Contract Metal Products. Zinus Furniture has leased a 644,000-square-foot building where it will locate its global headquarters and regional distribution center. It will create 170 to 200 jobs in Tracy. Contract Metal that provides precision metal products for tech firms is relocating from Fremont into a 64,000-square-foot building
Incentives have played a big role in Tracy’s success story as well as having available land and spec buildings needed to snare employers.
Manteca Councilman Richard Silverman noted during a June council meeting Tracy and other cities such as Lathrop were cleaning Manteca’s “clock” when it came to landing jobs in the red-hot distribution center sector of the economy.
Of the available space for business park type employers inventorying existing space in San Joaquin County that is 5,000 square feet or larger Stockton has 52 percent of the overall total or 6.1 million square feet, Lathrop 18 percent or 2.1 million square feet, Tracy 12 percent or 1.4 million square feet, Lodi 10 percent, of 1.1 million square feet, unincorporated parts of the county 6 percent or 680,000 square feet, and Manteca 1.8 percent or 212,000 square feet.
As for existing, planned and future land set aside for industrial uses Manteca has one-seventh that of Stockton, just more than one-fifth of Tracy, under a half of Lathrop and even a third less than Ripon.
The Tracy City Council as of July 1 stepped up its game when it comes to incentives in a bid to attract jobs.
Manteca’s elected leaders and city staff have batted around the idea of incentives over the past several years but haven’t done anything beyond talking save for negotiations that are now ongoing for a specific employer — a destination indoor waterpark resort hotel. They have decried the loss of redevelopment agencies that Gov. Jerry Brown pulled the plug on to balance the state budget. Tracy, even without a RDA, has put incentives in place.
Some of those incentives actually take a page from Manteca’s playbook in the first decade of this century when they used sales tax splits to secure Bass Pro Shops and Costco. In both cases, Manteca is ahead of the game given sales tax paid at Bass Pro comes from a customer base of which nearly 98 percent would not have shopped in Manteca in the first place. Costco brought significant sales tax Manteca residents had been spending in Costco stores in Modesto and Tracy plus snared consumer tax dollars from Lathrop, Ripon, and other nearby communities.
The expanded incentives Tracy has adopted vary based on the type of employer.
Office and Industrial
The effort aimed at snaring employers that have operations classified as offices or industrial uses incentives that may include:
uBuilding and planning rebates up to 75 percent maxed out at $20,000.
uHigh wage incentive of $1,000 per eligible employee per year up to five years with the qualifying salary. That means new companies must create or relocate a minimum of 250 jobs with a least half of those jobs at the head of household wage level adopted annual by the Tracy City Council. That threshold is currently at $72,000 a year. Existing firms must expand their workforce by at least 25 percent with new head of household jobs.
uSales tax rebates or direct financial assistance.
Tracy offers rebates of sales tax as well as building and plan fees as incentives to attract “unique” retail businesses that identify the City of Tracy as the point of sale and are not currently within the municipality’s primary trade area.
To qualify a “unique business” as defined by council resolution needs to provide five years of actual sales data for its two closet locations. Such business could qualify for sales tax and permitting rebates.
uA minimum of $10 million in annual sales qualifies for a 20 percent rebate of the portion of the sales tax collected by the city. The sales tax rebate expands to 50 percent for businesses generating $30 million or more in annual sales. That means an online retailer locating its point of sale in Tracy or a firm such as American Modular that produces portable classrooms generates $30 million in annual sales, they would receive a $150,000 annual rebate in sales tax based on the city receiving a penny on the dollar in sales tax or $300,000 from $30 million in sales.
uBuilding and planning fee rebates of up to 75 percent capped at $20,000 are also available.
The city has also set aside an incentive fund for small employers with five to 25 workers to receive rebates on building and planning fees that is on a first-come, first-served basis until the money is gone.
Tech & Innovation
To lure tech-based employers as well as to assist those already in Tracy to expand that range from research and development to services and advanced manufacturing, the city offers:
uAn expedited plan review rebate of up to $5,000.
uA use tax rebate of up to 50 percent.
uHigh wage incentives of $1,000 per eligible employee per year up to five years.
uBuilding and planning fee rebates up to 75 percent capped at $20,000.
Hospitality, Entertainment & Recreation Incentive Program
Tracy offers incentives for “unique” firms providing jobs in the hospitability, entertainment, and recreation sectors that may include hotel room tax rebates, direct financial assistance, building and planning fee rebates, and/or sales tax rebates.
“Unique” firms must generate a minimum of $10 million a year in sales tax or operate a minimum of 250 overnight rooms at one location.
Manteca is using a room tax rebate as one bargaining chip to secure the indoor waterpark destination resort on 60 acres of city-owned land west of Costco along the 120 Bypass. The proposal is to put in place a 15 percent transit occupancy tax for that property — as opposed to the existing 10 percent elsewhere in Manteca — and do a split with the resort operator.
Tracy also has a “Grow Tracy Fund Loan Program” for firms that generate between $500,000 and $20 million annually in revenues. Loans can range from $100,000 to $2 million with a payback of up to 25 years.
To contact Dennis Wyatt, email firstname.lastname@example.org