Double Agent Plays Strong Role in Driving Process Away From Alternative Locations
By a 3-2 vote, the Davis City Council approved a motion that would authorize the city staff to develop a conditional use permit that would allow for the construction and move of Davis Diamond Gymnastics to a location on the Davis Auto-Center.
The eventual vote itself reflected a unique split where the three councilmembers who faced re-election voted to support the conditional use permit rather than risk the anger of a large audience of children and their parents. And while there was the general motive of saving the facility and keeping it in Davis, information perhaps was manipulated by one agent – who was both an agent for Davis Diamonds as well as for the parcel involved.
Councilmember Stephen Souza made the original motion to direct staff to come back with conditions and findings for a Conditional Use Permit. That motion was seconded by Councilmember Dan Wolk.
As Mr. Souza correctly pointed out, the city council could not make the final decision on Tuesday night, but instead had to authorize the city to come back with conditions and findings. That leaves open some room for maneuvering.
Councilmember Wolk, with two small children of his own, has consistently prioritized programs that affect children. “With a daughter who does gymnastics and a wife who did it for many years, I have to say that gymnastics is of particular importance to me.”
Councilmember Wolk said that while he understood the importance of auto sales for the city’s revenue, at the same time, he noted that this spot and adjacent parcels had been vacant for a number of years.
“I think Davis Diamonds’ partnership with the MarkeTech Group presents a really good opportunity for Davis Diamonds and for MarkeTech to build what I think is a really good opportunity” to build an innovation hub, he said and added, “I think they’re really authentic when they talk about how they tried to find alternative sites; even staff said it was very difficult to find sites that they could potentially utilize and they’ve obviously found this.”
Councilmember Stephen Souza told city staff, “Staff, you’ve done a wonderful job. You’ve done exactly what you’re supposed to be doing – you provided us with the necessary information for us to debate and figure out what is in the best interest of the community as a whole.”
“You looked at the land uses and you followed exactly the pattern in the guidance that you’ve given us,” he continued, “You’re doing your jobs appropriately and I thank you for that. I just disagree.”
Mr. Souza would go on to argue that the model laid forward in an auto-mall model is not the model of the future and that Davis needs to diversify its revenue portfolio.
Mayor Pro Tem Rochelle Swanson said that, while she is a huge supporter of Davis Diamonds and what they bring to this community, however, she cannot support a conditional use permit “sight unseen.” She argued that we need to know what we are getting into and we do not approve projects that did not hit design review.
She noted how tight the city budget is by pointing out the need for a public-private partnership to save the community pool. “What I don’t want to see,” she said, “is out of hand let go of what is not ghost revenue.” She noted that staff has been talking to some prospective auto dealerships and that there is an offer on the table.
She believed that there was a win-win solution, but that the conditional use permit did not get us there.
“This is about long term fiscal stability and if we have an option to get to a win-win and preserve and increase revenue,” she said, “I want staff to talk about potential partnership with Davis Diamonds.”
“I want to see time for that to be discussed rather than just taking a gamble on this particular situation,” she said. “We can’t plan by exceptions.”
As a substitute motion, Mayor Pro Tem Swanson put forward a motion to direct the staff to work with the applicant to see if there was a way forward. The key question was whether the applicant was willing or whether they simply wanted the city to go forward.
Christian Renaudin, owner of the MarkeTech Group told the council, “We have tried many times and we have even been billed for staff time during these meetings… So what kind of partnership is it when we sit down at the table to try to find a solution and we’ve been very eager for months to do that… but we receive a bill for the staff time.”
Mayor Joe Krovoza very pointedly asked Mr. Renaudin if he understood that the rules of the appeal are that the applicant pays for the staff time.
As the night went on it became more and more clear, that Mr. Santana, who represented not only Davis Diamonds but also the owner of the parcel, was in fact playing both sides of this issue and accruing great personal advantage from doing so.
The bottom line for Mr. Santana was that they were not willing to go back and discuss more with the city staff. They wanted an up or down vote on the appeal this evening.
Mayor Krovoza put the question to the Davis Diamond folks, who felt that they were being taken advantage of in their current situation, and that the owner of the DISC was not willing to drop his price and is essentially willing to sit on a vacant building rather than lower the asking price.
“I feel that you are putting us in a difficult position,” one of the owners of Davis Diamonds said, “We feel that we have gone out of our way to be open…. I think you need to give us a chance, the partners together and talk about it. This was kind of just thrown in our face. We need to take some time to talk to our broker, our partners before we come up with that answer.”
They feel that DISC is not a possible option for them as an alternative site.
They did suggest they could take five minutes and try to get together on something.
After their caucus, they indicated the willingness to work with the city. “We’re definitely very interested in pursuing that and we’ll do it diligently,” one of the owners said. “On the other issue as to whether we are willing to delay the conditional use permit, we respectfully decline.”
City Attorney Harriet Steiner, however, indicated that the council could with three votes continue the item to a date certain and it would not need the consent of the applicants.
Councilmember Sue Greenwald told the public that she was awake all night worrying about this, and called it “one of the difficult decisions I’ve had to deal with.”
“My whole twelve years on the council, my goals have always been to put the community first, put the neighborhoods first, the citizens needs first, above fiscally-driven planning,” she said.
“One of the problems that we face as a city is that really nothing brings us any net revenue except auto malls, auto dealerships, and hotels,” she continued. “We’re in terrible financial shape.”
She said she hates this kind of planning and “yet the legislature has given us no other choice.” She added, “We don’t get any revenue for zoning for businesses that create new jobs. None. They probably cost more in service than they bring in.”
Mayor Krovoza was pointed, “It actually bothers me that the choice here is between sending a great institution like Davis Diamonds out into the auto mall areas in a dilapidated building because it’s cheap, and putting [it] on the edge of town.”
“I’m bothered that we’re going through this choice where we’re choosing Davis Diamonds or auto malls,” he continued. “Because I think that’s a false choice.”
He argued that so long as this deal is before Davis Diamonds, that blocks us from getting to a better solution for the community, which is a more central facility.
The mayor then made a crucial fundamental point, which is that the zoning of this land is actually what makes it affordable.
“There is a real fairness issue here, and that is that the reason that this land is affordable is because it’s zoned the way it’s zoned,” he said. “If we took this zoning off of this land, there would be many other people that would love to put a commercial office space down there because now cheap land would be available.”
So, he argues this deal is therefore fundamentally unfair.
He said, “I can’t listen to the people who are directly involved in this deal advise us that there’s no future for auto sales in Davis. And if we don’t generate revenue off auto sales, everyone in this room has to ask themselves what we’re going to generate revenue for this community from.”
He argued that another option might be big box and he suggested that this is one of the tough decisions that this council had made over the years.
It is city-based recreation that is what falls off our budget when revenue drops. “We didn’t have $100,000 and the community pool is now closed,” the mayor pointed out. “We have 1700 swimmers in this community that have one less pool because we didn’t have $100,000. If we make this recreational choice, there may be another recreational choice that falls off the budget. That’s part of the decisions that this council is having to make.”
However, the substitute motion would fail, with only the mayor and mayor pro tem supporting it.
Councilmember Greenwald went against her fiscally conservative tendencies on this issue and stated, “I hope I’m not making a huge mistake for the city at large. I’m going to vote for it because it’s such a popular and important institution, as a one-time exception and hope that the auto mall can thrive.”
“I hope people understand we need your support on supplementary taxes. We don’t have the revenue to run this city,” she said.
While I initially supported the concept of keeping Davis Diamonds in town, after watching both how the vote went down, and how Davis Diamonds was really put into a no-win situation by huge monied interests in the community, the deal looked worse and worse.
The worst part of this deal is that Xavier Santana, who played both sides of this deal, really drove a lot of this process and he stood to make a financial windfall off this. Some sources estimate he may make as much as a quarter million off this deal alone.
If the city is trying to engage Davis Diamonds about looking into multiple options around town – which they did at this council meeting as well as before – and the person who is representing them in real estate (Mr. Santana) is also representing the seller in this case, Gene Simon, then Mr. Santana has a conflict of interest in this process.
He does not have the incentive to look at other options.
Now the Diamond people claim that the owner of DISC was completely unreasonable and maybe that is true. Maybe DISC is not the option for Davis Diamonds. But I at least have to wonder how much of that process is being driven by the interests of their own broker, and whether or not they are even getting an honest read on the situation.
Frankly, I am not sure how this arrangement is even legal where Mr. Santana represents both Davis Diamonds and Mr. Simon.
I fully support Davis Diamonds. In fact, I initially agreed with the conditional use permit. However, as I watched the night unfold, I think Mayor Krovoza and Mayor Pro Tem Rochelle Swanson were correct that this is not how the planning process should be unfolding in a community that attempts to plan well.
It was very telling on Tuesday night that the first people to speak at the meeting in public comment were those with the financial interests, and then the young people spoke next giving them cover – and cover for Mr. Santana who was an agent representing both sides of the deal.
Playing a huge role in this is the fact that Davis Diamonds is so popular in the community, it is obviously an election year, and I think some of the councilmembers who normally would be giving the city’s finances much stronger consideration tilted toward other considerations.
But I want to emphasize this point again – the real problem that went down here is that we really do not know to what extent Mr. Santana poisoned any alternative location discussions due to his own financial interests. Here is a clear-cut case where problems with the process undercut my confidence in a decision where I agreed with the ultimate outcome.
—David M. Greenwald reporting