ONE SWEET LIFE

Atherton helps shape economies in Manteca, Hawaii & Nicaragua

By Dennis Wyatt Executive Editor

“Coach” is still swinging for the bleachers.

These days, though, that entails Mike Atherton playing right field on a softball team in Maui while he oversees a coffee plantation, a popular Maui agri-tourism operation, and one of only two major community developments to get the blessing of county authorities in Hawaii to build homes and commercial.

Atherton has been called “Coach” for years. It’s a nod to his forte as a playmaker on teams that he has assembled for everything from tearing down the shuttered Spreckels Sugar factory and converting it into an economic juggernaut that spurred 21st century job growth in Manteca, building a school and homes for coffee plantation workers in Nicaragua or converting an old 2,000-acre sugar cane plantation into small farms, an agri-tourism destination, and a new community.

Atherton is the first to tell you the successes he has been involved with — everything from getting development rolling south of the 120 Bypass, Spreckels Park, the creation of bonus bucks in Manteca, laying the groundwork for Del Webb at Woodbridge and the Promenade Shops at Orchard Valley and even getting Great Wolf Resorts to take a look at Manteca — are team efforts. While he brings savvy, passion, and vision to the table his various partners in ventures ranging from Bill Filios, Al Boyce, Bing Kirk, and Toni Raymus among others bring equally important skill sets such as business acumen, attention to details, a love of their community, and a desire to do more than just build homes and business/industrial parks. Call it a desire to leave a legacy by building a community.

Atherton has been in Hawaii for five years. It is where he and partners launched Coffees of Hawaii, growing coffee on six islands and buying farmland on Molokai.

He found himself in his element.

“I’m a storyteller,” Atherton said.

He put that skill set to work talking the ears off tourists — including a number from Manteca — that make their way to his Molokai farm to satisfy their curiosity about everything from taro to sugar cane. But he soon found not a lot of tourists made their way to Molokai.

So when the opportunity came up to purchase the Waikapu sugar plantation, Atherton convinced his partners it was a great opportunity.

It was shortly thereafter that Atherton discovered that while it is challenging to develop in California it is a downright daunting task to do so in paradise.

Atherton envisioned a  project that preserved producing agricultural land, created an agri-tourism element, and provided 1,500 homes in a self-sustained community.

When he first rolled out the plan, the County of Maui gave him a clear thumb down. The motion to approve the project didn’t even garner a second.

“It was the first time I ever was told no for a project,” Atherton said.

On top of that — to paraphrase a favorite Atherton line — the sun stopped shining making it impossible to make hay as the global housing market collapsed.

That was when Atherton started deploying development strategies that helped lay the groundwork for an ongoing successful 35-year run in Manteca. He offered to give more for community endeavors than what development rules required. He tweaked the project to reflect local values and to provide the basis for sustainability for generations to come.

When the dust had settled, of the 20 projects vying to secure county approval in Maui only two survived — Atherton’s master planned Waikapu country town coupled with a prime farmland agricultural preserve and a development advanced by the iconic Hawaiian firm of Alexander Baldwin.

To date, local farmers are growing crops such as mangos, taro, avocado, bananas and coconuts on 1,000 acres of prime agricultural land. There’s tourists visiting what was once one of Hawaii’s premier sugar plantations, and the initial phases of a self-sustained community have been put in  place including solar farms and wind power generators to provide all the energy needed.

Following in Claus

Spreckels’ footsteps

Atherton’s venture in Maui has a definite Manteca connection — Claus Spreckels.

The Manteca sugar plant that AKF Development would later tear down and replace with a multi-use project generating close to 2,000 jobs  was built in 1916 by Spreckels. Atherton and his partners bought the Waikapu sugar plantation that was originally founded by Spreckels several years after he established his Manteca plant.

“The factory was almost identical to the one in Manteca,” Atherton noted. “It was designed by the same guy.”

Atherton has impressed natives and local history buffs with his knowledge of Claus Spreckels and his sugar empire. They often asked how he became some versed in the subject.

“I learned it all in Manteca is what I tell them,” Atherton said.

He’s the man for whom Atherton drive in South Manteca is named. The road is destined to become the community’s most heavily traveled thoroughfare as the 1,049-acre Austin Road Business park develops along with commercial fronting the 120 Bypass. Atherton followed in the footsteps of other famous men — his grandfather and his great-grandfather.

Great-grandfather Benjamin Holt revolutionized farming and land development when he invented the Caterpillar in Stockton in the 19th century. The machine’s first big tests included transforming tens of thousands of acres in the San Joaquin Valley into fertile farmland and the development of the Delta’s levee system.

Grandfather Warren Atherton was the national commander of the American Legion who created and successfully lobbied to get Congress to adopt the GI Bill assuring those who served America of being able to get a college education.

Atherton said sometimes he tries to figure out which had a bigger impact on America — the invention of the caterpillar or the GI Bill.

“It’s an interesting debate,” he said.

His father Warren Atherton II was a lawyer who passed away at age 49.

Atherton picked up his passion for building communities from his uncle Sandy Atherton who was the developer of the 7,000-acre Lincoln Village area in Stockton.

Manteca is

Atherton’s home

Atherton, 65, is in Manteca for a spell.

He has business interests here including Atherton Homes and a piece of other ongoing endeavors including Austin Road Business Park. He has a home here and his son lives here.

His Manteca home is a tad more traditional than his accommodations on Maui where he lives in a converted double decker bus.

“Hawaii is the most beautiful place in the world next to Manteca,” Atherton said.

 Those aren’t words of a salesman. Instead they are from a man who takes pride at what he and his partners have helped bring to Manteca and one who sees even greater things on the horizon for the community.

“My plan is when I’m through in Hawaii is to come back here and help finish things up,” Atherton said.

Atherton was the key linchpin to convince others to put their fortunes on the line to demolish the sugar refinery and develop Spreckels Park. Banks wouldn’t touch it. Other developers feared possible “hidden” pitfalls such as toxic issues and the daunting task of demolishing a factory, tearing down four 15-story concrete silos, and rehabilitating the land include the equivalent of 75 years worth of lime use for county agriculture.

The abandoned factory was at the most high profile intersection in Manteca — the Highway 99 and 120 Bypass. And as such it posed the potential of being a cancerous blight that could severely limit economic growth in Manteca.

At one point the partnership teetered on bankruptcy with cash dwindling down to a week’s supply at best until a deal was closed for the sale of the 177-lot Curran Grove neighborhood where factory housing and an almond orchard once stood.

Atherton flees

the Sandinistas

Atherton’s road to Manteca included cutting his teeth as a farmer and community builder in Nicaragua.

Atherton while in his 30s, said a college friend who was a Peace Corps worker urged him to go to Nicaragua for two weeks. If he didn’t like it, the friend said he’d at least get a vacation.

Atherton ended up investing five years developing raw land in the Central American country into productive farms as well as building villages.

He eventually got Bing Kirk —  who was a partner with him and Filios in the development of Spreckels Park— to join him for several years.

“One day the workers came to me and said ‘Mike there’s going to be a war and we don’t want you to get hurt. You have two weeks to leave,,” Atherton once recalled.

Atherton escaped Nicaragua in 1979 before the Sandinistas overthrew the government in a bloody war.

Atherton returned to San Joaquin County. He eventually returned to Nicaragua and founded the Jesus Mountain Coffee Plantation that is operated in tandem with Coffees of Hawaii coffee plantations.

Atherton who was born in Stockton and graduated from Stagg High was the front man — development jargon for the managing partner who puts together deals— for a variety of partnerships that at one time represented the bulk of future urban land in both north and south Manteca.

Manteca’s darkest hour

It was Atherton who stepped up to the plate in what was arguably Manteca’s darkest hour in 1997 when Spreckels Sugar was getting ready to shutter the beet processing plant that for generations was an economic mainstay of the community. There were 225 permanent jobs at stake plus dozens of seasonal jobs.

Consulting engineer Ron Cheek approached Atherton about Spreckels company representatives who were looking for a development partner for the 365-acre sugar plant site.

Spreckels Sugar’s original plan had involved leaving the factory and silos intact while surrounding it with 600 to 800 homes, developing commercial along Moffat and a 9-hole golf course with business park uses along Highway 99.

They soon realized it couldn’t work with the factory still there. The Spreckels Sugar corporate hierarchy originally thought it would be a matter of developing the land while shuttering the plant for awhile waiting for sugar fortunes to improve.

But that wasn’t going to happen. Increasing costs for sugar beet growing in California and tougher air quality standards coupled with stiff competition overseas and in the South made a sugar refinery an uneconomic proposition. Holly Sugar in Tracy — the county’s last hold-out — succumbed to the economics nine years ago as well.

There was another problem. No one wanted to develop the property in conjunction with Spreckels with the sugar factory still there and none — including Spreckels — thought that it could be removed without busting the proverbial bank.

So Atherton — with no experience developing an industrial park or commercial ventures — forged ahead. He took a vision to the sugar corporation and put together a partnership that was able to marry private capital with redevelopment agency funds — primarily loans of $5 million that were just paid back in full over five years ahead of schedule — to put in infrastructure necessary to attract commercial users and employers.

But before RDA could add muscle, the factory had to be cleared.

Sweet deal

Atherton found ways to make the clean-up and demolition pencil out.

Soil testing alone searching for contaminates would push the $1 million mark.

Atherton found innovative ways to make the deal work. The four 15-story silos that were imploded before 10,000 onlookers created a mountain of concrete that was crushed and used for road base for what Atherton calls “the sweetest stretch of freeway in California” when Highway 99 was widened from four to six lanes between Manteca and Ripon.

An Oakland salvage company bought the iron. Bricks from the nearly 80-year-old warehouse were recycled. Many were sold but some made their way into projects around Manteca — the front of the now shuttered Kelley Brothers Brewing Co. & Brickyard Oven Restaurant, traffic islands and monument signs in Spreckels Park and the Spreckels Sugar historical plaza developed by AKF for $200,000 behind the Chevron gas station at Yosemite and Spreckels avenues.

Altogether, 98 percent of the factory and silos were recycled. It was such an impressive revitalization effort that Spreckels Park garnered several state awards.

Start in building

Atherton’s first venture into home building took place in Manteca.

He bought acreage on the north side of Louise Avenue west of the Highway 99 freeway back in the days when the interest rate was pushing 20 percent.

Raymus had everything on the south of Louise Avenue. Atherton said they got land north of Louise and west of Highway 99 because no one else wanted it.

Atherton started a home construction venture with his partners. Just like in Nicaragua learning the ins and outs of land development and farming, Atherton immersed himself in all details of the construction business right down to doing the final walk through.

The first year they sold six homes(in Springtime Estates and Raymus sold 60 across the street.

“I asked Antone Raymus what I was doing wrong,” Atherton recalled in an interview eight years ago. “He told me, ‘son, you’ve got to make a few changes’, and then proceeded to delineate all of the insights he had gleaned in nearly 35 years of home building at that time.”

Atherton’s admiration for Raymus runs deep. He looks at what Raymus has contributed to the community as well as solid business decisions to emulate.

He also learned another lesson the hard way — greed is not a good thing.

During the go-go days of the late 1980s and early 1990s, AKF got a bit too aggressive and when the downward slide of 1991 hit, he was one of those builders that came precariously close to the edge because they kept building inventory like there was no tomorrow.

Since then Atherton monitors market trends much closer and does get ahead of the curve. As a result, you will rarely see Atherton Homes with standing inventory.

Working deals

Atherton’s ability to juggle deals and make them work gained a lot of attention in Manteca.

The Woodward Park deal — still the best developer offer ever accepted by the city with  52 acres for $1 and no strings attached — back in 1988 rates as a visionary move even though it has taken the city 15 years to finally get to the point they can do visible development.

Atherton didn’t ask to be exempted from park fees in exchange for the land. In fact, he was among a handful of developers leading the charge 12 years ago to significantly raise park fees. He went a step further and argued they didn’t raise them enough after jumping them more than $1,300 per home.

All of his “deals” hinge on building toward the future with the bottom line being doing the best now means higher returns down the road.

Ask him about Atherton Drive as it has developed around Airport Way and he’ll literally bristle.

He has no kind words for developers who do the minimum and then check out of Manteca.

The portions he developed of Atherton Dive have lush landscaping and bike paths, something that he put in place before the city adopted such standards. In fact, Atherton and his partners drove today’s Manteca landscaping standards.

That is in stark contrast to Atherton Drive near Airport Way where it is asphalt curb to curb with cement sidewalks pushed up against block sound walls.

Roots run deep

Atherton’s ties to San Joaquin County run deep.

His great-grandfather Holt came to Stockton from New Hampshire in 1849

A wagon wheel maker by trade, Holt figured that there would be a huge demand for his product from the men heading toward the gold mines.

After the Gold Rush, Holt turned his attention to the potential of the great Central Valley. It didn’t take long to see traditional farming implements were cumbersome and getting stuck in the valley soil.

So the inventor in Holt — who created 35 different agricultural implements in his lifetime —rolled out a product that would revolutionize farming, land development and even modern warfare worldwide — the Caterpillar tractor.

The tracks distributed the weight of the farm equipment. Holt Manufacturing started turning out Caterpillar products from its Stockton factories.

Atherton’s grandfather —Warren Atherton — married Holt’s daughter Anne. A lawyer by trade, Warren Atherton entered the Holt family concern.

Holt was the inventor and Warren Atherton was the businessman.

Warren Atherton answered the call to duty in World War I and so did Holt Manufacturing. They literally invented the tank by taking a tractor and mounting a gun on top of it to end the reliance on trench warfare. Holt Manufacturing innovations were prevalent on the battlefields throughout World War II.

The Holt Manufacturing plants were shifted to Peoria, Ill. to be more central to the United States markets and closer to the Atlantic where many of the military equipment needs were being shipped to Europe.

After Warren Atherton’s stint in Europe, he was the driving force behind the creation of the G.I. Bill that provided millions of returning servicemen the opportunity to access higher education. His significant contribution to increasing the standard of living of millions through education resulted in Delta College naming its performing arts auditorium in his honor.

His own course

Atherton is a 1967 graduate of Stockton’s Stagg High.

“About the worst thing you had back then in Stockton was fights,” Atherton once recalled. “Stagg was a rah, rah school back then. It was a different time.”

Atherton went off to San Jose State where he pursued political science studies.

Atherton was hanging out around Lake Tahoe after graduation when his friend who had served in the Peace Corps asked him to join him in Nicaragua.

Back in Nicaragua

It is because of the five years that he spent there, that Atherton came up with the idea to enter the coffee business.

Atherton and partners purchased a coffee plantation, rebuilt the farm town — including church and school —  where most of the 75 permanent workers live. The partnership also hires 400 seasonal workers to pick coffee beans.