HEFTY PROFITS: Arizona-based Kitchell Development made $1.8 million in a fast turn-around of city land, in a deal that brought a Costco Wholesale store to Manteca. Crews are building the store in the Stadium Center shopping complex, above.

MANTECA — An Arizona-based developer made $1.8 million buying and selling city land over the course of three months as part of the city-backed deal to bring Costco to Manteca.

Kitchell Development, the company behind the Stadium Center shopping complex, worked as a go-between for Costco executives and the City of Manteca, which was eager to have big-name retailers move into town.

The company’s work led to a 2007 deal in which the city agreed to give Costco $3.7 million in sales tax rebates if the wholesaler opened a store in Manteca.

Two months after the City Council OK’d the rebate, Kitchell Development bought 17 acres of city land next to Stadium Center, where the new store would be built.

Kitchell paid the city $3.6 million for the land on Dec. 7, 2007. On Feb. 29, the developer turned over the same land, untouched, to Costco, for $5.38 million, tax records show.

The city land sale had been prearranged under a four-year-old contract between Kitchell and the Manteca Redevelopment Agency, a special branch of the city government that focuses on economic development and affordable housing.

In May 2004, the Redevelopment Agency paid $12.1 million to buy 58 acres of farmland on Kitchell’s behalf, allowing the developer to buy back the land at the same price but in smaller portions so that it could build the shopping center in phases.

It was the only way the shopping center would be built, according to an April 2004 city report, because “the financing of the purchase by the developer (was) not feasible.”

In May 2005, Kitchell bought back 27 acres and slowly sold off portions of that property to various chain retailers and restaurants — a process that is still continuing today.

But the 17-acre parcel, called the “West Phase,” remained untouched for more than three years.     In July, the city voted to extend the contract with Kitchell until the end of 2007, though it was first set to expire after 18 months.

Deputy City Manager John Nowak, the city official most involved with the deal, said the city’s arrangement to sell the land through Kitchell was necessary and worthwhile.

“If it wasn’t for Kitchell, we wouldn’t have Costco,” Nowak said. “They have the expertise and the ability to go out and attract the businesses that the city wants.”

As for the amount of money that Kitchell made re-selling city land, Nowak said it wasn’t the city’s concern.

“We didn’t want profits,” he said. “What we got for the residents was a shopping center that they want.”

Kitchell Vice President Don Glatthorn, who oversaw the Stadium Center development and recent land sale, did not return calls for comment.

Company spokeswoman Janet Traylor said she could not answer questions about the land sale, but described Kitchell’s general role as a liaison between corporations and cities.

“Kitchell had brought the contacts with the tenants,” she said. “When we bring in major retailers — that’s what we do to bring value."