August 2019 Cities Past Issues Public Sector

Manteca, California – Creating options for work

August 9, 2019

Manteca, Calfornia, CA, Del Webb Skyline.

Manteca, California

Creating options for work

Business View Magazine interviews representatives from Manteca, California, as part of our focus on best practices of American towns and cities.

Manteca is a city of 21 square miles in San Joaquin County in California’s Central Valley, 76 miles east of San Francisco. It was founded in 1861 by Joshua Cowell, who claimed around 1,000 acres and built houses on what is now the corner of Main and Yosemite. In 1873, the Central Pacific Railroad laid track directly through the area. The residents wanted to refer to their new train station as “Cowell Station,” but there was already a Cowell Station near Tracy. The residents agreed to change the name to “Monteca.” But this was misprinted as “Manteca” (Spanish for “lard”) by the railroad, and the misspelled version was eventually accepted as the name of the town, becoming a town-wide in-joke, laughed at for generations. In 1918, Manteca was incorporated as a city, and Joshua Cowell became its first mayor.

Manteca fashions itself the “Family City,” and lies at a crossroads of major highways and railroads. As recently as the 1970s, Manteca’s economy was based existed primarily on agriculture, and was still barely a stop between two freeways, Interstate 5 and State Route 99. The continuing rise in Bay Area housing prices caused Bay Area residents to look further eastward for cheaper places to live. Since the construction of the 120 bypass portion of State Route 120, Manteca has become a popular choice for these commuters, with population figures rising dramatically each decade since the 1990s. Based on January 2019 estimates, 83,178 called Manteca home, an increase of 2,700 in the past year alone, a 3.4 percent growth rate.

Recently, Business View Magazine spoke with Don Smail, Manteca’s Economic Development Manager, who offers a thoughtful and thorough presentation of the current trends and projects impacting the city and its residents – focusing, particularly, on the need to develop more stay-in-town opportunities for a workforce that must travel many miles to and from their places of employment.

Manteca Transit Center

“I think we’re in an interesting dynamic right now,” Smail begins. “We are part of what we are calling ‘Greater Silicon Valley,’ associating ourselves with the phenomenon of the great economic engine of 2.5 percent unemployment areas to the west in Santa Clara County, Silicon Valley, the East Bay, etc. We have become a commuter bedroom community for that area, which requires a four-hour, round-trip commute. We’re building more than 500 houses a year and we think the long distance commute lifestyle is not sustainable. Only for so long, will people put up with that kind of a crazy commute just for their career.”

“We already have a unique and different cadre of workers here that we never had before,” he continues. “These are technology workers who are part of the Silicon Valley and Bay Area economy and they are residents here. Now, we have an opportunity to find ways to get them to shorten their commute by staying local and finding methods and means to help their current companies and others to consider expansion opportunities, or co-work spaces, or something similar, in our community. As well, we, as a community, are stepping up and identifying more areas of land within our municipal boundaries that are suitable for industrial or commercial development, something we have not done well, historically.”

“We’re trying to meet the market demand that this shortage of affordable land for commercial and industrial development is creating. The high price of housing is driving people to put up with these extraordinarily difficult commute times and we’re saying ‘They’re here now, they’re part of our community, so let’s keep them local.’ That’s our strategy.

“We try to identify companies that have clusters of workers, because, if it’s just a single worker here or there, we may be able to put them into an office complex or co-work space or something where it’s basically an annex where maybe they go into the office two days a week and the other three days they’re not working from home, per se, they’re working at that local annex office that has a conference room they could lease as needed, has high-speed bandwidth, document processing on-site – all those sorts of amenities one would expect to have in an urban setting.” Towards that end, the City Council recently approved an RFP seeking development of a Class A Office Business Park on a prominent 8.5 acre parcel of city-owned land fronting on Highway 120, an ideal site for this type of office project.

“We are seeking to offer those locations here, but we’re also trying to identify individual companies that have larger footprint space requirements. Those that need enough land to be able to put up a warehouse distribution facility, or even a manufacturing facility. That land isn’t available at any price in Silicon Valley. Unless you want to fill in the bay, or take out a golf course, there are simply no sites available. They’re reaching a point where it isn’t that the land is just too expensive – the land with proper zoning and infrastructure and all the entitlements in place is simply not available at all.

“So we’re trying to pivot and give them that value proposition, to say, ‘Yes, we’re a little farther away, but only 65 miles.’ Your employees already live here, or a substantial number of them do, and, if you really need to put up that new data center, or that new warehouse, logistics center, whatever it happens to be, particularly facilities that require a larger footprint, we’ve got a variety of suitable sites and we’re in-between I-5 and Rte. 99 to give you access to markets. That’s how we’re packaging this opportunity.

“The challenge among the workforce is that everyone wants to be close to the mothership, fearful if they get too far away from headquarters, no one will ever hear from them again, and they’ll miss that promotion, or that career opportunity, or something important. I think that’s why they put up with this crazy commute thing; partly because of the jobs and wages, but also that perception of career ladder access. In Manteca we’re saying we are already part of the Silicon Valley, we are the laborshed, if you will, by proxy, with all the property we put up to provide land for residential development.

“A house in our community, a three or four-bedroom place, might be in the $450,000 to $500,000 range. In Sunnyvale, you put a ‘1’ in front of that – which is why folks are making this choice to maybe buy a house for cash over here and just deal with the primary wage-earner putting up with this long commute.

“We’ve got the ACE commuter rail network that softens the blow a bit, but that’s still four-hours-plus each day, back and forth, that takes them away from their families, away from their homes. It’s a grind. So we’re trying to find a way to put that value proposition out there and say you can have it both ways. You can still have access to the main corporate office when you need to, because it’s really not that far when you travel off-peak. But to get to work in Santa Clara at 8:00 AM you sometimes need to leave here at 4:45 AM, it’s getting that crazy.

“During our recent General Plan update process, we realized we hadn’t adequately identified enough suitable sites with proper zoning for industrial and commercial development in our own city. We hadn’t adequately planned into the future to make sure that we have shovel-ready sites available with road networks and other infrastructure so that companies who might be interested could consider us. That’s what we’ve done, recently, with our General Plan update. Previously, it was ‘Let’s see how many more housing lots we could build.’ We have 7,000 lots in inventory right now, and we are building more than 500 homes per year. That is more than 10 years’ worth of inventory. We don’t need any more housing lots. We need a place for those residents to be able to work close to home and still be connected to this Silicon Valley engine of commerce that is driving the whole region.”

Street Festival

Manteca’s traditional workforce profile has not been a cadre of tech workers; they have been more a variety of associate degree level, some college. For them, San Joaquin County can be seen as a regional economy with a relatively short commuting distance to work in, say, Stockton. But this is a new and different cohort of workers the city is encountering and, for those folks, there are not currently jobs they could compete for, and for the most part, they don’t exist in the county.

“We have also been speaking to these residents that are part of the community now, who have made this choice, realizing it’s a bit of a deal with the devil, because they’re just not happy,” Smail remarks. “This is a big personal challenge, to put that kind of time into this mega-commute. We’d like to get ahead of it and have a solution in play before things get to the point where it’s gridlock and mission-critical, and we think we could do that.

“We had one case of a 233-acre residential development that was supposed to be right up against the Union Pacific Freight rail tracks. We’ve been able to make the argument and business case that if you look at property on either side of the tracks for about two miles, it’s all industrial and commercial except for this one 750-home development. So we were able to attract a developer to bring that one into the industrial column. That’s the point – if we’ve already got 7,000 other lots located away from industrial uses, do we really need to squeeze in more houses next to train tracks and, if we do, who’s going to buy them?

“Tesla recently acquired a facility in the adjacent city of Lathrop, maybe two miles from our border. While it’s not in the city of Manteca, we think it’s a net benefit because they bought a former Daimler-Benz-Chrysler building that had never been occupied and filled it rather quickly. They are now expanding even more, onsite, and a lot of those workers live in Manteca and Lathrop. Now their job is 15 minutes from home instead of 2 hours.”

“For those who don’t deal with this every day it seems a failure. ‘Gee, we didn’t get that deal. Tesla went to Lathrop. Why can’t we get that?’ Well, Tesla went to Lathrop because they had a building that was available and a site that was ready to go. Tesla could move into the building, make some minor improvements, and be ready in 120 days. These companies are moving so fast and are so agile that they’re looking for the right site and the right building. The actual community location can become important but only after the site meets all other site selection criteria.

“We as City staff are more focused on that location choice because it is a reflection of our local community, civic pride, job creation, investment, how we’re paid, etc. But for all practical purposes, within our regional economy, we’re one of a cluster of cities in South San Joaquin County that has available sites and a variety of choices. We want to get prospects interested in our area as a whole. We are happy to compete with our neighboring cities to offer the best location for a given prospect.”

“Tesla making that investment was a huge leap of faith, in my view, and a proof-of-concept that this is legit. We use them as an advertising and marketing component: ‘Look what Tesla discovered! Look what Amazon discovered with the investment they made in Tracy, Manteca, and Stockton!’ They are early adopters and have fully understood that this is part of their growth. If they don’t find a better place to obtain space at affordable rates, they won’t be able to compete and grow.

“We also need to be able to have space that is somewhat flexible that might be able to accommodate the needs of a smaller cadre of workers – the ones and twos and threes from certain companies, and let them find a reasonably decent co-work space close to home. That starts raising the bar for the worker who only comes in two days a week. That’s okay. We’re going to find ways to demonstrate that. We need to find ways to build that type of space so we can offer that to the people that are not Tesla.”

“One recent example of Manteca’s development appeal is the 29-acre Great Wolf Lodge project, the largest hotel ever built in the Central Valley, scheduled to open in June 2020. The resort includes a 500 room hotel, a 100,000-square-foot indoor water park, 12,000 square feet of meeting rooms, a large indoor Family Entertainment Center, and a restaurant/food court, all open year round. Expected to bring in nearly 500,000 visitors, annually, the resort will generate significant new general fund tax revenues which will help pay for roads, police and fire services, city parks, recreational amenities, and other community benefits. Additionally, the project is creating approximately 1,300 construction jobs in addition to an estimated 500 permanent resort jobs when open, offering both full and part-time positions and many youth employment opportunities.

“Demographics, central location, and available land were primary factors in site selection for the $180 million Great Wolf Lodge. However, their investment in our community happened in part because the City Council approved installing all the infrastructure required to make the site shovel-ready. The City has also approved a Master Plan for development of a ‘Family Entertainment Zone‘, which we expect will expand the venue experience and provide a wide variety of indoor and outdoor dining, leisure and recreation attractions to serve local residents and our many visitors.

“Time is really a critical commodity for many of these projects, no matter what the price is. If you cannot commit to an approval within the acceptable time frame, there is no deal, at any price. We understand that. We’ve developed project-expediting methods where, if the project is really time-sensitive and needs to have its own kind of expedited review and approval, we can uncouple that project from the normal process and, at an additional cost, run it on its own pathway, its own track, through to completion and final approval, if that’s what it takes. In some cases, if a project can get open two or three months earlier, that is all the difference in the world between making a deal or not. Sometimes economics get worked out because that earlier opening solves the problem. Maybe they’re paying rent somewhere else and it pencils out in a favorable way.”

“We want to be business-minded and business-friendly across-the-board and we understand fully that in this particular market, time is critical and we want to respect and respond to that.”