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Great Wolf is also a great deal for Manteca as it is not the Rose Motel
PERSPECTIVE
great wolf
The finished 500-room Great Wolf hotel and indoor water park resort on Daniels Street that is targeted to open on Dec. 17.

Great Wolf is not the Best Western. Nor is it the Inn by the Station that when it opened more than 70 year ago as the Rose Motel was the premier motor lodge in Manteca located on Moffat Boulevard that doubled as old Highway 99.

And 70 years from now the Great Wolf is highly unlikely to deteriorate to the level of the Inn by the Station where rooms are rented by the week.

That is not to dis the Inn by the Station which is certainly much better kept today than just four years ago. It’s more to do with the fact hotels that are true resorts — whether they are the Disneyland Hotel in Anaheim or on a stretch of world class beaches — are not subject to the same dynamics as a hotel along a busy freeway.

As such, they are constantly being refreshed and the attractions that make them a resort being rethought.

It would have been nice if the world had never heard of COVID-19 and Great Wolf had opened as planned in early July. But going forward Manteca will find it will benefit greatly from Great Wolf.

Toss aside the Keystone Cops routine at the city’s finance department, the essence of the Great Wolf deal cannot be denied. And that is even if the city did indeed receive shoddy legal advice regarding the price attached to 30 acres of wastewater treatment plant land a previous city administration and council leveraged into a $180 million private sector investment.

Based on 70 percent occupancy when the resort does open and thanks to a 3 percent hike in room taxes voters approved after the Great Wolf deal was inked, the city will receive close to $1.8 million a year in the first full-year of operation.

The original deal’s projected city net of roughly $800,000 annually could be wiped out for a few years if the city’s legal advice it took to the bank was off the mark on how to factor the value of the land into the equation.

But when all is said and done it will be no different than two other tax sharing deals — Costco and Bass Pro — that have worked out quite will for Manteca. The best example is the Costco split. The Bass Pro deal obviously would be even better if the developer had bothered to make a serious effort to fill in-line shop space.

Sometime this fiscal year the final payment to Costco is being made.

Manteca lured Costco in 2008 despite the community’s demographics not meeting their criteria. City leaders also heard through commercial developers that Costco was considering a second Modesto location. In lieu of that they were pondering a store locating somewhere along the Interstate 5 corridor in a game of wait and see in terms of how Lathrop and River Islands developed.

Data collected by Costco showed Manteca residents in 2006 where making $6 million in taxable purchases at its warehouse stores in Modesto and Tracy.

To land Costco and to do so before locating a second store in Modesto or one in Lathrop became more appealing, Manteca asked Costco what it would take to get them to build in Manteca. Costco pushed for a permanent sales tax split. Manteca said no way. Costco then came back with a sales tax deal that would allow them to recoup the $3.7 million it would take to build the Manteca store with no interest factored into the equation.

Under the deal Costco would get 45 percent of the sales tax they collected each year until they recouped the $3.7 million.

While Costco was being paid back is $3.7 million, Manteca would pocket $4.5 million. Based on the 12 years to pay back the amount, the sales tax generated from the Manteca store averaged $880,000 on an annual basis.

That also means Costco for the last 12 years averaged collecting $440,000 in Measure M public safety tax on top of the city’s sales tax. Without Costco, Manteca would have had 2½ less police officers or firefighters or a combination thereof.

Let’s not forget that the city will see a more than $400,000 bump in sales tax revenue now that Costco is paid off. And it’s just in time for the COVID-19 hit in taxable sales. Costco is one of the brick and mortar concerns that did not get ravaged by the pandemic.

And while Manteca might eventually have beaten out Modesto or Lathrop, the Great Recession hit just as Costco opened. The odds of a Costco store being built in Manteca’s during at least eight of the last 12 years was slim to none.

The Bass Pro deal, while not as lucrative, also gave Manteca tax dollars it would not have otherwise seen. Close to 96 percent of all Bass Pro sales are to non-city residents.

The 35-year split that gives the center developers part of the sales tax collected is money the city never would have been able to get.

While the Costco deal brought taxable consumer dollar spending back to Manteca and pulled some away from Lathrop and Ripon, the Bass Pro deal brought dollars in that would never have been spent here given the 100-mile radius retailer could have located anywhere and certainly wouldn’t open stores in neighboring cities.

The Great Wolf deal works on the same principle. It’s not a hotel. It’s a resort with a 100-mile draw that could have ended up in Brentwood or Gilroy.

For those hell-bent on discrediting previous councils, it should be noted the city will be receiving room taxes — even will the split is in place for the 25-year max on the original 9 percent tax — it would not have received from typical hotel guests. Great Wolf is a resort and not just a hotel.

Just like a traveler who is not going to spend a minimum of $250 on a room overnight with no intention is using the attractions Great Wolf offers, no family is going to travel to Manteca to spend two days in a standard hotel and that be the entire reason for their mini-vacation.

Also let’s not forget the 550 jobs, of which half are full-time.

Even if the bulk of them pay $15 to $18 an hour, Manteca needs those jobs as well given most will be filled by college students and those seeking their first job.

There were those back in 1990 that slammed a redevelopment deal that bought four homes on a former country lane where Denny’s is today, to make it possible for the building of Walmart and the Mission Ridge Shopping Center because Walmart only offered mostly minimum wage jobs.

It ignored the fact a lot of Manteca residents were driving at the time to Modesto and Stockton to work at minimum wage jobs due to the dearth of the employment opportunities in Manteca. It also glossed over the reality Manteca residents were indeed driving to Walmarts out of town to do their shopping due to limited shopping options in Manteca.

Great Wolf at the end of the day will generate a positive impact on the city’s budget. An analysis — just like the one the current city leadership used for The Trails subdivision — showed the property and sales tax that Great Wolf will pay on top of the room tax it generates will more than cover the cost of potential police and fire services the resort may need.

It also will mean 550 people will have jobs.

And — except for the $10.7 million to extend Daniels Street and infrastructure that will also open up nearly 100 acres of city land for private sector development that will generate property sales, jobs, sales tax, and property tax — Great Wolf has not cost the city a dime.

Even growth fees coming out of the sales tax split are being covered by taxes on guests.

Great Wolf, once the dust settles in the finance department, will be what it always was— a shrewd move on the part of city leaders that brought a 500-room hotel and resort to Manteca that will see more than $50 million at a minimum flow into city coffers over the next 25 years.

 

This column is the opinion of editor, Dennis Wyatt, and does not necessarily represent the views of 209 Multimedia.