The finishing touches to a classic example of how redevelopment agencies were able to change the economic future of California communities are being worked on.

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 Department 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 25,039 square foot medical buildings to be built off Norman Drive are also being worked on.

The three projects are the final pieces in the transformation of the derelict Spreckels sugar factory into a 360-acre economic juggernaut dubbed Spreckels Park that enabled the defunct Manteca redevelopment agency to:

* Build the $28 million Big League Dreams Sports Complex.

* Build the initial extension of Daniels Street with underground infrastructure west of Airport Way to accommodate the development of Costco and the Stadium Retail Center now anchored by Kohl’s.

* Funding generated for Juniper apartments to provide housing for the workforce.

*Partial funding for Union Road Diamond Interchange and 120 Bypass.

This would not have been possible with an RDA loan of nearly $8 million – attacked by critics at the time as “corporate welfare” – needed to expand Spreckels Avenue from the edge of the Food 4 property. Less at Moffat Blvd.

The city, through the RDA, which captured the additional property tax increases on properties within its boundaries, which included a large swath of “old” Manteca, was able to raise over $60 million in obligations. This is thanks to the massive injection of annual property taxes diverted from major 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 ideal candidate for RDA assistance. The sugar plant closure had created major burn potential at Manteca’s most visible location – the northwest corner of the 120 Bypass and the Highway 99 interchange. The closure also cost in Manteca 220 jobs in the private sector.

The California Legislature created the Redevelopment Agencies Act in the 1950s to help local jurisdictions that chose to form them fight the blight and stimulate economic development in their communities. Twenty percent of all RDA spending was to go to affordable housing projects.

Former Governor Jerry Brown ended the RDAs in 2010 in an effort to avoid state budget cuts during the Great Recession. This allows property taxes to be redirected to schools, which has allowed Sacramento to reduce the funds needed to fund public education. As a result, the state avoided layoffs in its various bureaucracies.

Spreckels Park developers – led by Mike Atherton – were unable to secure bank financing to demolish the four 15-storey sugar solos, warehouse and sugar beet processing plant.

Banks were wary of the risk given that the plant had been in operation for more than 75 years and there could be serious environmental remediation issues that had not been identified.

The sale of the land to a Lodi builder for the 166-home Curran Grove neighborhood at the southeast corner of Powers and Yosemite avenues helped bolster the financing the partners had secured to pay for the demolition and leveling of the land.

But they still had to make packages beyond the perimeters along Yosemite Avenue and Moffat Boulevard marketable. This was critical given that builders of distribution centers want land ready for development and don’t want to deal with the lag time of extending sewers, water, streets and other infrastructure to plots.

The partners had already taken great financial risks and spent substantial funds to prepare the site for development, leaving few resources they needed to put in place the key infrastructure essential for the commercialization and development of the park’s interior. ‘activities.

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. The banks were not lending to them even with the success that the AKF had already enjoyed.

That’s when they approached the city of Manteca for a $7 million loan from a redevelopment agency.
That’s where the $7 million RDA loan came in.

Developers began talking to the city about the possibility of an RDA loan.

The majority of the council led by Mayor Bill Perry was supportive, but by the time the AKF was able 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 strongly opposed to Manteca RDA becoming involved in the Spreckels project.

After a 3-2 vote where Perry and Giordano came out the losers, the $7 million loan was executed.

The RDA loan to complete Spreckels Avenue and extend water, sewer and storm sewers was repaid in full with interest three years ahead of schedule. It was the only major RDA loan ever executed by the city that recovered every penny plus interest instead of forgiving some or all of the loaned money based on performance goals such as job creation and the increase in sales tax.

The Spreckels Park project was a textbook case of what the RDAs were supposed to do. It took a closed sugar refinery that no private sector lender wanted to buy into, eliminating the blight, multiplying the jobs lost by 12 times and stimulating the local economy.

The punch in the arm that the assessed value of the Spreckels Park development has given the RDA with essentially 100% of any new value placed on the RDA tax rolls cannot be overstated. A single $25 million distribution center alone generated $250,000 in annual taxes.

To contact Dennis Wyatt, email [email protected]

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