500-room hotel is key to municipal room tax revenue ranging from $990,000 to $7.7 million over 10 years

Manteca is riding the wave of change when it comes to how millennial parents spend family vacations.

Change?

They’ve given up one big trip a year in favor of a series of smaller trips that are a four-hour drive or less from home.

And in terms of top destinations, it’s Great Wolf Resort.

The indoor water park now has 20 locations, including its 500-room hotel in Manteca.

The Chicago-based company will open additional resorts in the Houston area and Naples, Florida, this year.

When a 23rd location opens in Connecticut in 2025, Great Wolf will have a resort within a four-hour drive of 90 percent of the nation’s 333 million residents.

CoStar – a company that tracks real estate-related data – reports that Great Wolf has 8,700 rooms.

That’s more than double the 4,300 the resort company had a decade ago in 2014.

The occupancy rate is also increasing.

This is an increase from the 65% room occupancy rate cited in an analysis of Great Wolf by an independent firm leading to the City Council signing an agreement to bring Great Wolf to Manteca in 2018.

It is now around 80 percent.

It’s no coincidence that Great Wolf ended up in Manteca.

It was part of a methodical effort by the council at the time to put in place long-term solutions to help Manteca cope with the changing economic landscape.

While vacations as a whole take a hit during economic downturns, “staycations” – trips within easy driving distance – generally benefit.

This was highlighted in region 209 during the Great Recession.

Many destination ski resorts have been hit hard, while resorts like Bear Valley in western Seirra, Alpine County, located within driving distance of major metropolitan areas such as San Jose and San Francisco, have recorded numerous reservations.

Originally, Manteca executives sought to build traditional outdoor water parks on urban land near the Big League Dreams sports complex.

When word spread, three companies were interested in locating outdoor water slides in Manteca.
But when Manteca executives caught wind of indoor water parks — a foreign concept to most Californians at the time — and looked at the economic impact they had on communities, they shifted gears.

An indoor water park offered the benefits the city was looking for:

*This is an activity that cannot be supplanted by the Internet.

*It performs quite well during recessions.

*It generates jobs on a large scale, especially per square foot compared to distribution centers.

*Jobs are a combination of entry-level jobs and jobs that pay for experience.

*It does not require heavy vehicle traffic.

*Its peak traffic demand (people driving to and from the station) does not coincide with significant travel times in the morning and afternoon.

*This would significantly raise Manteca’s visibility.

*This would allow Manteca to collect taxes to help pay for city services, essentially without dipping into the pockets of local residents, since almost all guests do not reside in the city.

The city invested redevelopment agency money into extending Daniels Street and infrastructure to McKinley Avenue to make city-owned properties marketable for a water park and future businesses that would integrate well in a family entertainment zone.

Just as importantly, Manteca invested in a lengthy and costly environmental approval process for a proposed 500-room indoor water park.

This pre-approved EIR was one of the main reasons why – when Great Wolf was ready to move to Northern California – other suitors such as Brentwood and Gilroy were left behind.

Great Wolf is the main reason Manteca’s room tax revenues have increased 6.7 times since 2014, when they were $990,000 to $7.7 million annually.

This figure is a bit misleading.

That’s because of a 25-year city tax sharing agreement that Manteca made with Great Wolf to seal the deal.

The city collects 25 percent of the amount each year, then Great Wolf receives the next $2 million.

Third on the list is an annual payment for 10 years ($67,000) covering the purchase of the land.

In addition to the $450,995 in deferred growth fees, Manteca receives each year over 20 years.

After that, for the first 10 years, Great Wolf receives 75 percent of the remaining occupancy tax and the city 25 percent.

This split shifts to a 50-50 split over the remaining 15 years.

Once 25 years have passed, the entire tourist tax returns to the city.

During the current financial year

this translated to $3,598,537 for Great Wolf and $2,018,787 for the city.

The 12 percent lodging tax means Great Wolf generates $5.6 million of the $7.7 million the city collects in total.

Unlike other agreements with Great Wolf, such as in Graden Grove, Southern California, where the city essentially helps ensure that Great Wolf covers development costs by putting up the general fund as collateral, Manteca taxpayers have not never been counted.

Instead, for 25 years, they receive a smaller but growing share of lodging taxes that wouldn’t have been collected if Great Wolf hadn’t built here.

As an unexpected bonus, the state mandate that prevented Great Wolf from opening when it was completed in 2020 and sat unused for the better part of a year due to the pandemic, does not did not have an impact on municipal coffers as was the case in Garden Grove, which still had to pay money. toward Great Wolf’s payment of construction loans.

Room taxes now represent 10 percent of the city of Manteca’s general fund revenue.

It falls behind property taxes at 39 percent and sales tax at 26 percent.

Overall, Manteca is expected to have $73.8 million in general fund revenue in the fiscal year beginning July 1 to operate daily city services such as police and fire protection, street maintenance and park maintenance.

To contact Dennis Wyatt, email [email protected]