The finishing touches on a textbook example of how redevelopment agencies were able to change the economic futures of California communities are in the process of being made.
On Thursday, the Manteca Planning Commission will review plans for a 7,560-square-foot retail building directly behind the Chevron gas station at Yosemite and Spreckels avenues.
The city’s Community Development Service is processing an application for ProLogis to build a 305,000-square-foot distribution center on Spreckels Avenue between J&M Equipment and American Modular Homes.
Plans for the final three medical buildings representing 25,039 square feet to be built off of Norman Drive are also being processed
The three projects are the final pieces of the transformation of the abandoned Spreckels Sugar plant into the 360-acre economic juggernaut dubbed Spreckels Park that enabled the now defunct Manteca Redevelopment Agency to:
*Build the $28 million Big League Dreams sports complex.
*Construct the initial extension of Daniels Street complete with underground infrastructure west of Airport Way to allow development of Costco and The Stadium Retail Center now anchored by Kohl’s.
*Generated funding for the Juniper Apartments to provide workforce housing.
*Partial funding of the diverging diamond interchange at Union Road and the 120 Bypass.
It wouldn’t have been possible with a nearly $8 million RDA loan — attacked by critics at the time as “corporate welfare” — needed to extend Spreckels Avenue from the edge of the Food 4 Less property to Moffat Boulevard.
The city through the RDA that captured incremental property tax increases from property within its boundaries that included a large swath of “old” Manteca was able to leverage more than $60 million in bonds. That was thanks to the massive infusion of annual property taxes diverted from large distribution centers such as Ford Company’s West Coast Small Parts Distribution Center, Home Depot, Target, American Modular Dryers’ Ice Cream and more.
The Spreckels Park project was the textbook candidate for RDA assistance. The sugar plant’s closure had created a potential for major blight at the most visible location in Manteca — the northwest corner of the 120 Bypass and Highway 99 interchange. The closure also cost Manteca 220 private sector jobs.
The California Legislature created the redevelopment agency law in the 1950s to help local jurisdictions that opted to form them fight blight and to spur economic development in their communities. Twenty percent of all RDA expenditures had to go toward affordable housing projects.
Former Gov. Jerry Brown pulled the plug on RDAs in 2010 in a bid to avoid state budget cuts during the Great Recession. That allow property taxes to be redirected back to the schools which enabled Sacramento to reduce money needed to fund public education. As a result, the state avoided layoffs at its various bureaucracies.
The developers of Spreckels Park — led by Mike Atherton — couldn’t get bank financing to demolish the four 15-story sugar solos, warehouse, and the sugar beet processing factory.
Banks were leery of the risk given the factory had been in operation for more than 75 years and there could be serious environmental remediation issues that hadn’t been identified.
The sale of the land to a Lodi builder for the 166 home Curran Grove neighborhood on the southeast corner of Powers and Yosemite avenues helped bolster what funding the partners had secured to pay for the demolition and grading of the land.
But they still had to make the parcels beyond the perimeters along Yosemite Avenue and Moffat Boulevard marketable. It was key given builders of distribution centers want land that was ready to develop and do not want to deal with the lag time requiring sewer, water, streets and other infrastructure to be extended to parcels.
The partners had already taken on great financial risk and burned through substantial money preparing the site for development leaving little in the way of resources they needed to put in place key infrastructure essential to market and develop the interior of the business park.
The sections along Yosemite Avenue — the Food-4-Less store anchoring the first phase of Spreckels Marketplace, Chevron, Jack-in-the-Box and Home Depot — could be developed as they relied on existing infrastructure. Banks would not lend to them even with what success AKF had already enjoyed.
That is when the approached the City of Manteca for a $7 million redevelopment agency loan.
That is where the $7 million RDA loan came in.
The developers started talking to the city about the possibility of the RDA loan.
The council majority led by Mayor Bill Perry was supportive but by the time AKF was in a position to seek execution of the RDA loan agreement Carlon Perry had been elected mayor and Denise Giordano to the City Council. Both opposed RDA in general as corporate welfare and were dead set against Manteca RDA getting involved with the Spreckels project.
After a 3-2 vote where Perry and Giordano came up on the losing end the $7 million loan was executed.
The RDA loan to complete Spreckels Avenue and extend water, sewer and storm drains was paid back in full with interest three years ahead of schedule. It was the only major RDA loan ever executed by the city that got every penny back plus interest instead of forgiving part or all money loaned based on performance targets such as job creation and increased sales tax.
The Spreckels Park project was a textbook case of what RDAs were supposed to do. It took a shuttered sugar refinery that no private sector lenders would sign on to, eliminated blight, increased the jobs that were lost 12-fold, and stimulated the local economy.
The shot-in-the-arm that the assessed value of the Spreckels Park development gave the RDA with essentially 100 percent of all new value being placed on the RDA tax rolls can’t be over emphasized. One $25 million distribution center alone generated $250,000 in annual taxes.
To contact Dennis Wyatt, email dwyatt@mantrecabulletin.com
