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Will fees kill SaveMart store?
Council balks at major road fees that could be death knell for new retail
It will cost $150 million to replicate the Jack Tone/Highway 99 interchange in Manteca as the proposed Raymus Expressway/Highway 99 interchange. - photo by HIME ROMERO/The Bulletin

A $150 million interchange that Manteca leaders have no inkling of how they will pay to fund could end up killing a long-awaited SaveMart store at Woodward Avenue and Atherton Drive as well as costing the city a proposed 120,000-square-foot furniture store along the 120 Bypass as well as other future retail.
A representative of a development firm that is submitting plans for the 85,000-square-foot shopping center in South Manteca that SaveMart has already signed on as the anchor told the Manteca City Council Tuesday the proposed increased major road fees being charged to growth would kill the project.
The proposed road fee would take the overall fees for the project from $2 million to $3.5 million for a 75 percent jump. It would mean fees would cost $25 per square foot or a third of the $75 per square foot cost to build the retail complex that could have as many as 15 additional storefronts. SaveMart alone would provide 100 jobs.
Developer Bill Filios told the council he is working with a major furniture company that wants to build a 125,000-square-foot store — the same size as the Target Store in Spreckels Park — along the 120 Bypass. The major road fee increase would send the Public Facilities Improvement Plan fees for the proposed store to $4.5 million.
“They would be paying more in fees than for the land,” Filios said. “It would be impossible to do the deal.”
Councilman Richard Silverman believes the sensible thing to do is to drop two new interchange projects for the major road project list that comes in at $306 million over the next 20 years that growth would pay. In many cases the fees will cover just 30 percent of planned work.
Silverman’s suggestion would be to drop two new interchanges on Highway 99 — one for the future extension of Lovelace Road north of Lathrop Road and the other for the Raymus Expressway south of Austin Road.
The $306 million includes $15 million or roughly a third of the $45 million cost for Lovelace. It also includes $75 million for the Raymus interchange or half of the $150 million cost. That interchange is more expensive as the freeway would have to be shifted to the east as was done on Highway 99 and Jack Tone Road in Ripon to accommodate ramps as well as to have the overcrossing clear the Union Pacific Railroads tracks. Dropping the two interchanges would slice $90 million off the $306 million project list and allow fees to be slashed 29 percent across the board.
The city has no funding source identified for the non-growth portion of the needed major road work including the other half of the $150 million for the Raymus interchange and the remaining $30 million for the Lovelace interchange.
The council ended up declining to adopt the new fees. Instead they instructed staff to set up workshops within 45 days to find ways to pare the list of projects. Council noted that while the fees have been a work in progress for 10 years, adding a few months to the process “to do it right” made sense.
The council rejected the idea of tapping into reserves or the general fund to pay down road fee charges for retail or business parks. Silverman likened such a move as “robbing Peter to pay Paul” as it would take money away from other projects the community has expressed a desire for such as an aquatics center.
By not adopting fees and adding at least another 45 days before any action is taken, the SaveMart project could avoid paying any increased fee for major roads. Fees are collected before a building permit is issued. The applicable fees in place at the time the permit is issued are what are charged, not fee increases yet to be made.
“We (Manteca) can’t put up a no business sign,” Silverman said.
Councilwoman Debby Moorhead — who along with colleague Gary Singh — will be the council representatives at the fee workshops agreed.
“The fees are way too high,” she said.
Filios stressed the need for infrastructure such as interchanges and that developers were willing to pay for them. Built he added they have to be reasonable.
He noted Federal Express originally looked at Austin Road Business Park to put in place their 800,000-square-foot facility that eventually ended up in Tracy. Filios said they picked Manteca as their top choice but once they saw the Austin Road interchange they essentially said “no way.”
Of the $306 million the proposed road fees are based on, a half is to cover interchange work. Besides the Lovelace and Raymus interchanges the fees would generate:
u$12 million for the McKinley Avenue/120 Bypass interchange first phase. Funding for the balance has been identified.
u$5 million to complete loop ramps at the McKinley interchange at a future date.
u$10 million for a third of the cost of improving the Airport Way/120 interchange.
u$10 million for a third of the cost of improving the Main Street/120 interchange.
u12 million for the Union Road/120 Bypass interchange.
u$10 million to widen Louise Avenue across Highway 99.
u$10 million to widen Cottage Avenue across Highway 99.

To contact Dennis Wyatt, email