By Rob White
The last two weeks has been very interesting. I have met with what has seemed like a continual parade of companies, developers and brokers in response to the news that Bayer Crop Science is moving. I have also been contacted by local and regional leaders offering ideas, advice and their solutions to what appears to have become a topic that has far reaching implications. It appears we are about to experience something akin to musical chairs as the companies try to figure out how to best leverage their opportunities for the future.
Let me start with the businesses first. I can’t discuss details because I was asked to provide confidentiality, but each company has stated they have plans to grow several hundred percent over the next five years. This means several hundred jobs, investment into facilities in the tens of millions of dollars and more permanency for the next decade or two. Each company has echoed the idea that they want to be in close proximity to the university and are willing to pay the surcharge to be in Davis so they can have that connection. In some cases, the acreage they need for the appropriately sized facilities does not exist within the Davis city limits.
In the case of the developers, we have discussed potential options on existing land and within existing facilities that might provide opportunities for some of this business growth. We have also discussed the opportunity to build some spec spaces on 2nd Street and other areas throughout the City. In the case of the brokers, City staff have reviewed and toured much of the available space in the City and continue to identify opportunity locations for the businesses that have indicated their needs.
It is very exciting to see how positive our local policymakers and leaders are responding to the need to best address the issue of business facility needs. Each of them is talking with their networks and working through the opportunities to hopefully ensure that we mitigate as much movement out of Davis as possible. And the regional leadership has reached out to provide support and encouragement, realizing that the university is one of the most important regional assets to continue business growth in the region. Nothing demonstrates that growth engine more than Bayer’s expansion followed a week later by the news of Marrone Bio Innovation’s IPO.
But why does it matter? Why are we working so hard as City staff and local leaders to facilitate these companies’ growth needs and working to keep them in Davis if at all possible?
It might be best answered with the following points:
§ Every job lost from Davis is a loss from local purchasing… loss of gas sales, lunch sales, catering of office events, stops at the grocery store, etc. These sales do not get reallocated or absorbed by the existing job base. They are just lost. Lost until we grow more jobs to replace them.
§ We also see a loss of revenue and income to the businesses that these employees visited. In the case of Bayer, it will impact places like Dos Coyotes in South Davis. It will impact the employees at service businesses by decreased sales and loss of income from tips.
§ Loss of a company means we also lose the potential of sponsorship and philanthropy, local leaders in our community and business orgs like the Chamber and Rotary, and volunteers for our community events and fundraisers.
§ Maybe most difficult to measure, but very important to recognize, is the impact of a loss of a major international business interest means that we will likely lose future investment by that corporation in new startups and entrepreneurs.
§ And we lose the community identity that these corporations bring and the place-making opportunities that come from recognition of Davis as the home of these companies. Ask Berkeley how it felt to lose Bayer’s investment, first to Emeryville and then to Mission Bay (San Francisco). Look at how important companies are to the identity of a city, like Intel is to Folsom or Genentech to Vacaville. These companies started small and grew in to global giants, investing heavily in their communities.
And if you disagree with this last point, I can tell you that just last week a public official from Folsom stated to a group of his peers at a dinner that it was because of Intel that Folsom enjoyed such notoriety and investment. They have approximately 5,000 jobs attributable to Intel and are a major reason for Folsom’s current fiscal health.
Intel’s employees volunteer in the community, raise funds for local charities, and are leaders in Folsom’s local organizations. Over the last five years, Intel has contributed over $50 million to charities in the San Francisco and Sacramento areas. Since 2000, Intel has invested over $4.3 billion in manufacturing capital investment, much of that being done at the Folsom campus.
In just under 30 years, the Folsom campus has grown well beyond the two office buildings and couple of hundred employees that started the facility. Sound familiar? Think that a decade or two of growth for a company like Bayer Crop Science or FMC Schilling Robotics or Marrone Bio Innovations might make a significant difference to Davis? A difference in the number of jobs, sales, revenues, and philanthropy? A difference in how people think of Davis… not just as a place that companies start or grow, but a place where they thrive and give back and lead.
This is why we are working so hard to make sure we keep as many of these potential opportunities local as possible. Because there is no way to know who will be the next Intel, but having global companies investments or successful IPOs is a sure sign that we are much more likely to see these successes. So let’s work together to keep as many of these companies local as possible… and let’s invite new ones to locate here… and let’s work strongly with our university and research communities to start some more. We owe it to ourselves, the region, and the world to be the best possible location for companies to grow and solve the world’s issues in agriculture, sustainability, energy, transportation, engineering and manufacturing.
As always, please let me know your thoughts. My email is rwhite@cityofdavis.org.
So Rob, if there is so much interest and companies ‘are willing to pay the Davis surcharge’, what about the cannery property? We keep hearing , not good location, but it seems if these companies are truly very interested….why not JUST a business park out there?
SODA
Was wondering the same thing.
SODA, Medwoman
That was my first thought also. Can you enlighten us Rob?
The Cannery property is already zoned for business, what’s the holdup?
houses is the holdup I think?
Money is the hold up …..I think ?
I too have wrestled with that question, and look forward to Rob’s response, but in the meantime will share my thoughts.
For me the key impediment to Cannery as a site for companies like Mori Seiki, FMC Schilling, Bayer Crop Science, etc. is access. The bottom-line event that caused Hunt-Wesson to shut down the cannery was the collision of one of the trucks serving the site and a bicyclist riding along Covell. The collision resulted in the bicyclist’s death. Trucks entering and exiting the site from/to Covell is to my thinking a safety nightmare.
Is that nightmare solvable? Absolutely. The best solution would appear to be an east-west road from a point just north of Wildhorse Golf Course on Road 102 (Pole Line Road) across the top of the Covell Village site and over the Cal Northern Railroad tracks over to Road 100A (Sycamore Lane). That would mean that trucks would exit The Cannery to the north. Their Interstate Highway access would be at the CA-113 interchange with Road 29. That solution would mean trucks would avoid all the existing automobile and bicycle traffic on Covell.
Is the Cannery big enough? The reality is we need both business park and housing for workers. To those who say What about Cannery I say what about Covell? The better plan would be to master plan both with houses and business space with good access. Still the reality is that Cannery isn’t big enough for what the community needs. If you build a business park where do they live. If you build houses where do they work. If you continue to squeeze Davis into existing borders you lose the benefits of high tech growth in Davis.
until i read mr. toad’s comment, i never really recognized the insidious nature of all of this high tech/ business park development. it’s a backdoor wedge to push for more housing. the reasoning goes, you have to build the housing where the workers are, otherwise you create a huge commute problem where people have to drive from woodland, west sac and dixon in order to get to work – that creates tax leakage and it also creates air emissions. very clever mr. toad.
[quote]The Cannery property is already zoned for business, what’s the holdup?[/quote]
That the owners have said, as explicitly as one can, that they will never build anything but housing there. And since they believe they are close to a 3-vote majority on the council for their project, they have no incentive to plan for anything else.
As with so many of these economic development issues: it’s the landowners that are the issue.
[quote]We have also discussed the opportunity to build some spec spaces on 2nd Street and other areas throughout the City.[/quote]
Excellent.
don: it’s pretty clear that the project will end up on the ballot and i expect it will lose there for the reasons david laid out last week. the opposition to the project as a mixed use from my vantage point is more about what matt williams is saying than just the landowners.
If that happens, it appears they are willing to just hold onto an empty lot for as long as necessary for the political dynamics to change. I agree mixed-use would be great, but if they aren’t willing then there is little point in adding it in to the equation. If the council and voters want to send them a signal by declining the zoning change, that is fine. But it won’t result in business park development there as far as anyone can tell from their statements in the past.
I don’t think they have much carrying cost on that land, and ConAgra is a huge corporation. They have little incentive, as I said, to make any change to their plans.
Rob-
Thank you very much for your thoughts on this! I have tried to explain the opportunity for years but it seems sometimes to fall on deaf ears.
On the ConAgra site. Lets recall that they were willing to sell the property and did (I believe listed for $13M and sold for $10M) back when they had 559,127 square feet of structures and an additional 320 acres of land which sold back in June to the county. Since that sale they pocketed the money from Lewis homes and they have since significantly devalued it by knocking down the buildings.
If we can get something permenantly designating the property as always subject to a Measure R vote if anyone ever wanted to build houses I suspect that ConAgra would finally leave us.
Ask yourself this question- “if the property were only worth $5M in todays market- would 10 local businesses each pay $500,000 for 10 acres of land each in Davis?” And then think about the potential jobs and industry that could create.
ConAgra is not a given. More importantly, the people we hear from are only here to develop a housing project- if that opportunity is permenantly erradicated, we could expect that ConAgra would dump the property and go back to making ketchup.
My guess is that the owners of the property, in assessing the ‘highest and best use’ are looking at which option is most ‘maximally productive’. While it costs more to build a bunch of housing, that has a higher market value and a higher profit. They aren’t interested in doing the actual construction; they just want to get it rezoned and sold. So they want to market it as developable residential property, which gets them the highest asking price. And which probably has the largest pool of possible buyers.
Do they want to pay for an election? No. Would they have to if citizens put it on the ballot as a referendum? No. So the only risk to ConAgra (2012 revenues $13 billion) is the cost of delay, which is pretty low.
So the only way to get to a business park on that site is what MIke Hart is alluding to: refuse the rezoning. And make it clear that the landowner will pay for any election to change it.
[quote]As with so many of these economic development issues: it’s the landowners that are the issue. [/quote]
The landowners and the [b]council[/b] are the issue because the landowners feel they might be able to sway them to change the zoning. If the council stood strong and told ConAgra that it will always stay zoned for business then ConAgra might give in as they have nothing to gain.
really makes little sense to me that conagra would be in the business of developing houses or that this community would allow them to do so.
“…an additional 320 acres of land which sold back in June to the county….”
Why? With what money? Easements? Why wasn’t this newsworthy?
“i never really recognized the insidious nature of all of this high tech/ business park development. it’s a backdoor wedge to push for more housing.”
its not back door unless you can’t see what’s in front of your face. This is how its done business create jobs, jobs create homes, homes generate taxes and produce children that strengthen our community. Why do you call it insidious? Do you think more people are insidious? What i will never understand is this antipathy towards more people even if they have high paying jobs that generate a richer community. So many of you are quick to jump on Cannery. How big is that property, 100 acres? Then we are out of space and then you get peripheral development pressure. The big problem, because of measure R, is that the opposition to any growth is resulting in a haphazard process. What we need is a plan that gets us out of our infrastructure and underfunded school holes. Rob is proposing a bold vision but the community refuses to come together behind a rational plan for implementation with Measure R a major stumbling block.
I interviewed both Rob and Kemble Pope today, and both of them told me that Davis does not need more housing necessarily in order for this to work. They cited the number of people who live in Davis and work in Sac or the Bay Area as examples. I think you actually work to undermine your case when you tie housing and jobs together.
“Davis does not need more housing necessarily in order for this to work”
Davis needs more housing whether this happens or not. You only have 100 acres in one spot inside the R line. using it for a business park just means more commute times and bigger carbon footprints. i’m not going to fall for this anti-growth trap. Its only counter-productive for the more people are bad, hateful, block any housing by any means necessary, anti-progressive progressives scene who oddly enough are also anti-tax zealots who associate with Jon Coupal types.
Though I haven’t gotten a chance yet to read and answer everyone’s questions/thoughts, let me be clear that I am NOT tying housing discussions to the need for jobs. These are conversations the community must have and one housing proposal is before the community now with the Cannery. I won’t speak to the merits of proposals being considered by Council as that is their purview. The discussion about jobs is the topic here and I want to be clear that I do not set policy, but implement the Council’s goals and priorities as set by their actions and decisions
Though I haven’t gotten a chance yet to read and answer everyone’s questions/thoughts, let me be clear that I am NOT tying housing discussions to the need for jobs. These are conversations the community must have and one housing proposal is before the community now with the Cannery. I won’t speak to the merits of proposals being considered by Council as that is their purview. The discussion about jobs is the topic here and I want to be clear that I do not set policy, but implement the Council’s goals and priorities as set by their actions and decisions
Okay I’ve calmed down now but the problem is that there is already a plan preceding apace for Cannery being developed. The only way you are going to stop that plan is by referendum and even that is a roll of the dice so all the people on here that immediately want to rehash that are not moving us forward because they don’t really care about moving us forward and seize upon anything they can to try and roll back more housing. Instead of an intelligent thoughtful discussion about the future of the community your site has become the voice of nimbyism where any idea is framed by a limited view of what the community should become in the future.
[quote]The only way you are going to stop that plan is by referendum and even that is a roll of the dice so all the people on here that immediately want to rehash that are not moving us forward because they don’t really care about moving us forward and seize upon anything they can to try and roll back more housing
[/quote]
Mr. Toad- I must disagree. I am the one who is perhaps most vehemently opposed to this proposed use of the ConAgra property and I am by no means opposed to its development. I am urging the city council to ensure that the property is developed for business, not houses, keeping it as it is presently zoned. I am opposed to this as a businessman and speak for a community of other business owners who would all be very happy to see this property come on the market with its current zoning.
A continued obsession with building more homes does nothing for Davis…
You can disagree all you want but the planning is well underway with the support of the council so if you want to switch tracks you must first re-invent the wheel.
mr. toad: there is a plan preceding which i don’t think is very good and a number of people on here seem to oppose. i don’t agree that the only way it will be stopped is referendum, but that is a possibility. so the question is why not press conagra to improve their plan so we don’t have to go down the path of another election that will defeat another development project?
How would you improve their plan? The problem is that whatever is proposed people are going to object so why bother.
Rob:
[quote]we have discussed potential options on existing land and within existing facilities that might provide opportunities for some of this business growth. We have also discussed the opportunity to build some spec spaces on 2nd Street and other areas throughout the City. [/quote]
Are there zoning or infrastructure hurdles to these infill sites? How quickly could they get through the Davis planning process? I realize we’re discussing a number of locations, so my question is general.
My point earlier was that from Rob’s article it seemed that business park only on Cannery might not be ideal for business needs but given the scarcity it might be welcomed. Matt’s traffic solution seems like a fit. Now the CC needs to stand strong and NOT rezone. It seems we ARE in the driver’s seat in terms of zoning. If we do not rezone then ConAgra can sit on it or sell it. If homes are not needed as much as business properties, let’s go with the latter. It is not as though this property is zoned for housing and we would need to rezone to business….
If it takes a referendum to make the council use the Cannery for what it’s already zoned for then so be it. Where do I sign?
With all due respect to Mike Hart who had insisted that all compatible-sized business finds this site attractive, I have heard rumors of “market studies” that did not completely support this opinion.
If I am a parcel owner I would want to know the actual market demand prior to launching into an expensive development project. The political winds of Davis politics related to land use is loaded with fairy dust. We wish it were so, so we insist that it is so.
“Now the CC needs to stand strong and NOT rezone. It seems we ARE in the driver’s seat in terms of zoning.”
Could we have a little reality check please. The CC has approved planning for Cannery. My guess is there are at least 4 votes to change the zoning. The Measure R limit line makes Cannery even more valuable for housing due to lack of competition from other sites in the City. Measure R planted the seeds for housing inside the line. If you want a different outcome you should get together with Soda and start collecting signatures.
if you want a different outcome you should get together with growth izzue and start collecting signatures.
We are treading in to some very murky waters, but let me have a go at trying to respond without getting an alligator firmly attached to my leg… There seem to be at least six significant items I am aware of that likely cause Cannery to be an issue as an industrial park:
1. The landowner is unwilling to sell for an industrial park use, as stated by their rep on Tuesday at the Chamber lunch… Like our own homes, we have limitations on how much we can tell someone to do with their property, and compelling them to sell is difficult.
2. Many industrial uses are incompatible with residential… Noise, dust, traffic, and light can all be drivers that create hostilities within neighborhoods. As someone who lives near train tracks, next to a bridge siren and can hear freeway and airport traffic, I can assure you I have neighbors who moved in long after these public improvements and yet complain. An industrial use after the fact will meet with significant public pressures, I am almost certain.
3. Accessibility to the site is difficult, even as a proposed housing development. With approximately 650 housing units, we can expect to see about 1,200 adult residents (that’s 1.84 adults per household, pretty generous when you take in to account the flats). That means if every person drove once a day (which we know doesn’t happen) there are 1,200 round trips. A business park of just modest sizes (let’s use an coverage rate of 35%, which is low rise commercial) would be about 1.5 Million square feet. Divide employees per square foot at about 500 square foot per employee count (an industry standard number) you get about 3,000 employees. That’s about 2.5 times the amount of roundtrips Monday to Friday, and most of them occur during about 1.5 hours in the morning and 1.5 hours in the evening. That doesn’t include trucks for deliveries.
4. Infrastructure takes money and financing in the commercial world rarely takes big risks. The formulas are pretty straightforward and can be looked up on line, but the approximately $25 million for infrastructure for a business park is unlikely to be found in the market.
5. Maybe most importantly, the businesses we have talked to have stated they have no interest in the Cannery. It is commonly known in the brokerage community, and for many of the reasons above. I specifically asked 3 users this last week if they would consider that site (working not to sway the discussion), and they said very adamantly that if that is their option, they will look in other towns. These three businesses represent about 50 acres of total need, so I take what they are saying with some element of truth.
I am trying very hard in my responses to be very straightforward based on gathered knowledge without stating policy.
Where these companies choose to go is their business choice. I am convinced that we want them in Davis, so I am working very hard (along with others at the City and community) to make sure they have as many options to stay.
I can only do my best to work within the constraints that the Council and community have provided. There is no easy solution… if there were, we would have solved Bayer’s needs and this conversation thread would never have existed.
It seems obvious that whatever the decision might be on future places for businesses, we need to make one and then live with the outcomes. In many cases, we have homegrown businesses that have outlived their spaces and are looking for community support to increase their size and employee count. We can choose to accommodate them, or not… but inaction is still a choice and has outcomes.
Don – yes there are many challenges to the infill sites. They include a laundry list of things and are site dependent, but include: lack of infrastructure (roads, utilities, accessibility), willing land owners, requested land values out of sync with market or use, environmental contamination, parcel too small for needed use, etc. But (the good news), we are working with one landowner now to possibly bring about 120,000 square feet of research/industrial use online as spec in the next 18 months. I am hopeful this will address needs for at least two of our identified businesses.
Davis Progressive said . . .
[i]”I don’t agree that the only way [Cannery] will be stopped is referendum, but that is a possibility. so the question is [b]why not press ConAgra to improve their plan[/b] so we don’t have to go down the path of another election that will defeat another development project?”[/i]
DP, how would you improve ConaAgra’s plan? Some have talked about making the plan 100% apartments. Some have talked about making the plan 100% business. Choices for Healthy Aging (CHA) has talked about making the plan 100% senior housing. What is your sense of what would be a better plan?
THanks Rob for your thoughtful answer. I will get off my cannery soapbox. Perhaps the best is to not rezone and keep it undeveloped for now.
[quote] I can tell you that just last week a public official from Folsom stated to a group of his peers at a dinner that it was because of Intel that Folsom enjoyed such notoriety and investment. They have approximately 5,000 jobs attributable to Intel and are a major reason for Folsom’s current fiscal health.[/quote]
Fiscal health? Are you kidding me? A quick Google scan shows that the city of Folsom has had to lay off significant numbers of employees, close a library and hike fees to stave off closing their zoo and public swimming pool. Such “notoriety and investment!” And it’s all accompanied by traffic, sprawl and city leaders who can’t or won’t say no to land speculators. Is that what we want to become?
I’m really tired of getting beat around the head with the we-must-pave-ag-land-for-a-business-park mantra. I chose to live in Davis precisely because it’s [i]not[/i] like Folsom.
Mr. White is free to advocate for whatever he wants. But why are we, as taxpayers, paying for it?
So who are we to believe, Mr White says he knows three businesses who want no part of the Cannery but a local CEO Mike Hart says just the opposite, that many business owners would love to move there.
It might help if you both would name those businesses as to further back your arguments.
“[i]Mr White says he knows three businesses who want no part of the Cannery but a local CEO Mike Hart says just the opposite, that many business owners would love to move there.[/i]”
Mike Hart says that the cannery site would be good fit for his company. I accept and respect his opinion on what is best for his company, but I strongly disagree with his assessment that this is generally a good place for business. In short, it does not surprise me that Rob is hearing a different story from other business owners and CEOs.
I am not advocating in favor of the ConAgra proposal as proposed. If anything is developed at that site it should only happen with a planning process that incorporates the development of lands to the East and North as well. It strikes me as incredibly dumb to proceed with developing the Cannery site alone.
Always interesting to go back and see the council deliberations on these things:
[url]http://www.davisenterprise.com/local-news/city/council-conagra-can-apply-to-develop-old-cannery-site/[/url]
Maybe Sue Greenwald’s 50-50 proposal wasn’t so bad.
Mark Hart wrote:
> Ask yourself this question- “if the property were
> only worth $5M in todays market- would 10 local
> businesses each pay $500,000 for 10 acres of land
> each in Davis?”
Ten acres (435,600sf) of land for $500K works out to about $1.15/sf (just over one dollar a square foot).
Commercial land in Davis has been selling for ~$10-$20 a square foot.
Residential land in Davis sells for more than double what commercial land sells for.
1. We will never see commercial zoned land in Davis selling for $1/sf so why even ask the question (local business would also be happy if UCD grads worked for $1/hr)?
2. With residential land selling for twice as much (or higher with some Davis home lots selling for over $50/sf in 2005) as commercial land does anyone wonder why ConAgra wants to build housing?
P.S. Any idea if “Mike Hart” is related to “Davehart” that was posting this week?
To the best of my knowledge they are completely unrelated.
I’ve been wondering when someone would pick up on Mike Hart’s fuzzy math. The basis for his argument is entirely divorced from market reality.
-Michael Bisch
Fuzzy Math
Dear Mr. Bisch- thanks for your comment and the opportunity to clarify a few things.
Mr. White- did you discuss price? If $10-20 per foot which SouthOfDavis thinks is the market, of course other folks wouldnt be interested, neither would I. But did you discuss it at the prices ConAgra actually has marketed this property for in the past in its current zoning? Most significantly I must disagree with you about “if they will sell” that is entirely based right now on the hope that the city will give them what they want- of course they won’t sell as industrial etc. if there is a hope to make a fortune on the vote of three councilmembers. Place a permanent requirement that housing on this site goes to Measure R and the property owner would most likely do exactly what they have done in the past and get rid of it…
Stop treating this property as if it has some sort of high value in its current zoning- it doesn’t. That is exactly what makes it attractive. It is provides an inexpensive inventory of land for business development.
And stop believing the nonsensical “study” done at the depth of the recession that talks about 40-year absorbtion. That is nonsense. Put it on the market at the price it was sold last time and it would sell in a month.
SouthofDavis states that commercial property in Davis has been selling for $10-20 per square foot (using $10 that is $435,600 per acre) I can think of three notable exceptions all having to do with the specific property we are discussing.
•The Cannery property in 2004- they sold 100 acres of industrial land with 559,127 square feet of buildings plus a separate 320-acre parcel for $12,500,000 (I looked up the recorder fee paid on May 10, 2004 of $13,750 divide by $1.10 and multiply by $1000 and you get the purchase price). If you use the 420 acres that is worth $29,761 per acre ($.68 per foot). Even if you just go with the 100 acres you still end up with a value of $125,000 per acre or $2.86 per foot.
•The second sale that is an exception is the Cannery property in 2009 when Lewis homes dumped it on ConAgra. It is a reasonable guess that they took at least 30% down (I have no idea how much exactly but that is a fair guess) so that would mean that the note if there was no payments made against it during the five years Lewis Homes owned it (very unlikely) would be $8.75M. They gave the property back to ConAgra rather than sell the property so that would yield a value for the 420 acres of $20,833 per acre ($.47 per foot). Again, if you focus only on the 100 acres is $2.00 per foot.
•The third exception is the in June when Yolo County purchased the 320 acres from ConAgra (thus leaving only the 100 acres remaining) for $2.4 million ($7,500 per acre). I won’t calculate the per foot value as this is not zoned the same and isn’t really comparable.
If you were to be logical about this and deduct the value of the 320 acre sale from the last transaction (which makes sense to do) you end up with my estimated value of $8.75M less $2.4M sale of the 320 acres for a net cost of $6.35M… $63,500 per acre for the 100-acre Cannery property ($1.45 per foot).
This isn’t speculation on the internet- these are the only three recorded transactions for this property in the recent marketplace with its current zoning. Stop making wild speculations about what ConAgra would or would not do- the blustering from a consultant is meaningless. ConAgra has participated in three transactions and those are the prices:
2004- $29,761 per acre
2009- $20,833 per acre (estimate)
2013- $7,500 per acre (the 320 only)
We are not talking about expensive land here. The only thing that adds value to it is the hope that the Davis City Council is going to grant them the rezoning which will at an absolute minimum increase the value of the property ten-fold… I don’t really understand the ConAgra apologists on this site that are lobbying like hell for the company that screwed Davis once by closing the factory, a second time for allowing the buildngs and tanks to be demolished and now a third time by pushing forward a housing project rather than just putting the property on the market. How much cash do you want us to put in ConAgra’s pockets before you are happy?
Just so it is clear, my points are not meant to generate debate. Revealing who the companies are that need growth room is not my right, especially since they have requested current anonymity. In a case like this, I encourage companies to state publically their need, but they often do not, and for what are probably obvious reasons. I am not asking to be believed. I am just stating what is stated to me confidentially.
Regarding land values of properties like the Cannery, Mike Hart makes some interesting points about sales history. But the recent acquisition by Bayer of 10 acres in West Sac with a 160,000 building is probably a better comparison of the industrial value of the land. As stated by the brokerage community, this purchase was a fire sale. It closed at $11 million. If I’ve done my math correctly, that’s $600,000 per improved acre. If discounted by 75% to take into account the building as an improvement, it’s still $150,000 an acre, or almost $3.5 per square foot (unimproved).
Taking in to account the stated fact by the brokerage community that this was a “fire sale” (see the Sac Bee article dated July 26th), then you can extrapolate that the actual value per acre at the Cannery as industrial would be greater than the extrapolated value of $150,000.
But probably more important than land values is what would be acceptable to the neighborhood and the community. Large industrial uses would seem to be incompatible. And infrastructure costs and ability to finance will also be part of the equation.
Rob-
Trying to take out the value of the buildings from a sale to determine land value is an art, not a science… If you were to attempt to do the same thing to the ConAgra sale of 2004 you would end up with the property being worth about $7500 an acre… its hard to do.
I don’t understand why there are so many lobbyists on this site trying to argue on one hand that the ConAgra property is worth soooo much money as industrial land, while at the same time apologizing for ConAgra for not putting it on the market as they are just certain that it wouldn’t sell… Odd.
The property is worth what a buyer will pay for it. Historical evidence would indicate that the property is worth about $63,500 per acre.
Why is it so hard for folks to accept the fact that the zoning is correct, the price reasonable and this doens’t require a lot of fooling around to work?
Seems to be a community make-work session.
Mike Hart:
[quote]I don’t understand why there are so many lobbyists on this site trying to argue on one hand that the ConAgra property is worth soooo much money as industrial land, while at the same time apologizing for ConAgra for not putting it on the market as they are just certain that it wouldn’t sell… Odd.
[/quote]
Great point, I have to say that Mike Hart just schooled this discussion.