GREAT WOLF LODGE in Garden Grove.

By Jim Tortolano/Orange County Tribune

One of Garden Grove’s most successful tax generators may be getting a 40 percent share of what goes into the city treasury from its operations for a 10-year period.

That’s if the city council on Tuesday approves a “restrictive covenant agreement” with the operators of the Great Wolf Lodge, a 603-room waterpark hotel resort on Harbor Boulevard.

What’s proposed is an arrangement in which two-fifths of the “transient occupancy tax” (also known as “bed tax”) paid by visitors to the hotel be shared with the hotel operators to “induce” the hotel operators to invest an estimated $40 million in renovations, including adding new food and beverage dining options, enhanced resort pool and entertainment activities including new “dry attractions,” updated rooms and updated common facilities.

That’s an estimated $27.7 million subsidy over a decade.

The reasoning behind the deal is that Great Wolf needs to “protect its brand” by bringing it up to current standards at other locations in the chain. If not renovated, according to a city report, the resort could lose the Great Wolf brand and thereby be a less independent attractive hotel with a separate water park.

The deal would also prevent the establishment of another Great Wolf Lodge within a 200-mile radius, which would include cities such as San Diego or Bakersfield. Such an agreement is intended to keep the TOT cash flow to the city intact and robust.

The council will meet at 6:30 p.m. in the Community Meeting Center, 1130 Stanford Ave.