By David Morris
The City of Davis is preparing to place a permanent 391 acre conservation easement on City-owned lands between Mace Blvd and Howatt Ranch (the “Mace 391” property – see Figure 1). The purpose of this article is to better inform our community dialog about the benefits of reconsidering this plan. The most important take-home messages are:
A conservation easement on Mace 391 will have a significant negative impact on the City’s economic development potential.
Shriners is a much better conservation opportunity for our community than Mace 391.
The public deserves a right to vote on whether or not we permanently remove Mace 391 from consideration as a portion of a peripheral innovation park as envisioned in the City’s economic development strategy.
The City should forego the planned conservation easement on Mace 391 and work towards a win-win solution that maximizes both open space conservation and economic development opportunities.
Our Best Economic Development Opportunity
Davis is in the grips of a fiscal crisis, and part of the solution is economic development focused on the technology sector. Our community is becoming increasingly aware that UC Davis represents an economic development opportunity that will have to be more effectively leveraged if we are going to sustainably maintain the quality of life that we have historically enjoyed. Technology sector economic development synergizes well with UC Davis, and is a better economic driver than our past reliance on residential development or the prospect of a large retail power center on the periphery.
The benefits of economic development focused on building a robust technology sector include more jobs, more tax revenue to the City’s general fund, and increased quality-of-life.
Critical to this effort is our ability to retain successful home-grown companies as well as attract outside companies that want a footprint in Davis. It’s all part of building critical mass and establishing an ecosystem where technology company executives, investors, entrepreneurs, business services providers, and a highly-skilled workforce can all see that Davis has a vibrant innovation economy that they want to participate in – and is not a dead-end street where relatively small companies are forced to leave because we can’t accommodate their expansion.
To build this innovation economy, a key part of the mix is a large technology park.
The 493 acres of land bounded by Mace Blvd, County Road 30B, County Road 105, and I-80 is the best location for a technology park in the entire Sacramento region. This equates to approximately 400 net developable acres. Some of the key drivers for this specific location include:
- Close proximity to a world-class research university with significant unrealized potential
- Adjacent to a very high quality-of-life college town
- On a major transportation corridor served by two freeway interchanges
- Easy access to existing infrastructure (water, sewer, gas, electricity, data)
- Separated from residential development
- Support from the technology and financial sectors
- Verifiable interest from prospective end users and tenants
- Outside the FEMA flood plain
- Contiguous with the existing technology corridor on 2nd Street (Marrone Bio Innovations, Expression Systems, Arcadia Biosciences, FMC Technologies Schilling Robotics, HM Clause, Mori Seiki/Digital Technology Laboratory)
- Sufficient acreage to create a world-class technology park with a critical mass of companies
A technology park at this location represents an economic development opportunity for the City of Davis as large as $1.5-2.0B, with the potential to yield $5-10M in annual revenue to the City’s general fund. In addition, there will be a significant multiplier effect from the economic activities of the technology park that will benefit the entire City. Davis has serious fiscal challenges that cannot be solved by taxes and budget cuts. A technology park will help address these financial problems.
As our community debates its economic future, the Davis voters deserve a right to weigh in on this opportunity and decide the ultimate fate of this special piece of land.
A Call to Action
The prospective 493 acre technology park site includes 306 acres of the Mace 391 property. If the planned conservation easement is placed on Mace 391, our community permanently loses its best economic development and conservation opportunities. The residual 187 acres is too small to meet the long term needs of the City.
Rejecting the 493 acre option would send a clear signal to the technology and financial sectors that Davis is not prepared to move forward with a credible effort to build a world-class technology park. At least three technology companies that were taking a serious look at the City of Davis have crossed us off their short list as a consequence of the negative outcome of the last public hearing on this issue.
The Mace 391 conservation easement may have made sense when it was initially planned in 2010. At that time the economy was still in the grips of the Great Recession, and it was less clear how important UC Davis is likely to become in the coming years as capital flows into the ag tech sector accelerate. The easement no longer makes sense in 2013.
It is important to stress that placing a conservation easement on Mace 391 is permanent. It can’t be undone – ever – even if we really regret the decision at some point down the road and want to change our minds. As a consequence, our community is at an important inflection point.
The Mace 391 issue will be a test of whether we can balance competing interests to maximize the outcomes for the City as a whole, or whether we get stuck in a zero sum game mentality where, in this particular case, open space preservation and economic development are at odds.
Let’s work collaboratively to find a path that respects our ethos of open space preservation while balancing our imperative, as host to UC Davis, to support a vibrant technology ecosystem.
The Win-Win Solution
From my perspective, if our community is going to be asked to give up the planned Mace 391 conservation easement for technology sector economic development, then a conservation easement on better acreage has to be offered in return. If one’s overriding goals are agricultural land preservation and the creation of an urban limit, the best conservation acreage in the entire Davis sphere of influence is the 234 acre Shriners property immediately north of Covell Boulevard and east of Wildhorse.
Accordingly, I worked for well over a year to acquire an option on this property. On May 23rd, my company, Capitol Corridor Ventures (CCV), finally succeeded in executing a purchase agreement with the property owners. That same day, CCV submitted a proposal to the Davis City Attorney. The basic idea was to exchange the planned conservation easement on 234 acres of the Mace 391 property for a conservation easement on the entire 234 acre Shriners property.
The value of a conservation easement on Shriners far outweighs that of a conservation easement on Mace 391 adjacent to I-80. Shriners has better soils, better water, riparian habitat in the north, and is directly in the path of residential development. In addition, the property has an ideal location for a community farm in the southwest corner – served by the under-utilized $2M Covell Bike undercrossing and a signalized intersection at Alhambra Drive.
On June 11th, the City Council was asked by Staff to press the pause button and reevaluate placing an easement on Mace 391. The process of rolling out the Shriners alternative was exceedingly poor and the policy discussion became politicized. There was plenty of blame to go around on all sides. As a consequence of this process failure, the community as a whole, the Open Space and Habitat Commission, the various local and regional business organizations, and the stakeholders in the Mace 391 conservation easement did not have a fair opportunity to vet the Shriners alternative. This was no way to make a policy decision that has such sweeping implications for the future of the City.
The Grant Issue
Mace 391 was purchased in 2010 for $3.8M with the following funds:
- $1.325M from Measure O (taxpayer money from our Open Space Initiative)
- $2.475M from the City’s Roadway Impact Fees (as an internal loan)
Subsequent to the purchase, the City received a $1.125M grant from the Natural Resource Conservation Service (NRCS) Farm and Ranch Protection Program to help offset the cost of placing a conservation easement on the land. These funds are not dispersed unless the City sells the property to a private party with an overlying conservation easement. The Yolo Land Trust would administer this easement.
By a complex financial transaction between the City, the Yolo Land Trust, and a prospective buyer, the NRCS funds would be used to partially pay down the internal loan from our Roadway Impact Fees. These funds would not go to new open space conservation. It should also be noted that the internal loan came from development impact fees, and the City has no near-term plans to use these funds (for example, they are not funds that would otherwise go to the current road repair effort).
The NRCS grant is at the center of a controversy related to whether accepting $1.125M of open space money from the Federal government has a higher value than maintaining the community’s opportunities for $1.5-2.0B of technology sector economic development (with it’s significant general fund revenue and multiplier effects) at the Mace site and conservation of the Shriners acreage in the path of residential development.
Community Farm Issue
Public comment at the June 11th hearing indicated that there was an expectation among some members of the open space community that 27 acres of the Mace 391 property would be improved at taxpayer expense and turned into a community farm. This plan has not been vetted by the City Council, and is speculative at best.
In its current form (Dec 2012), the plan envisions approximately $450K in acquisition and improvement costs borne by the City. A major problem with this proposal is bike access for the public, particularly kids and riders that are uncomfortable riding on the shoulder of the Mace Blvd curve. The expense to the City of providing safe bike infrastructure to this land in the County would be prohibitive.
One of the objections to setting aside the NRCS grant was the loss of this community farm site. As discussed above, there is an outstanding site for a community farm on Shriners. Unfortunately, on June 11th the focus was more on process than on optimizing opportunities, so there is currently very little community awareness of the Shriners community farm alternative.
The preliminary conceptual diagram for the Shriners acreage is presented in Figure 2. In addition to the community farm site (which would include ample land for community gardens, farm/farmer education/training organizations, etc.), we envision a 40 acre grasslands park with restored riparian habitat on the north end of the property and 160 acres of organic farmland leased to local farmers in small plots (5-20 acres). CCV will immediately grant the land to the City and provide access to ag water if a deal is agreed upon. The remainder of the improvements to the property will be contingent on the successful entitlement of the proposed technology park (which will generate the financial resources to make these improvements).
Option to Reconsider
The City owns Mace 391 free and clear. We still have the ability to do what is in the best interest of the community.
On 07/27/2010, this language was included in a Staff Report from Ken Hiatt and Mitch Sears discussing a previous NRCS grant:
“As a practical matter, if an acquisition that is identified in the agreement cannot be completed, the NRCS will enter into negotiations with the City to apply them to another City acquisition that meets NRCS criteria. If no City acquisition projects meet the criteria, NRCS will accept a return of the funds and apply them to their next highest ranked acquisition project. In the past the City has been a recipient of additional NRCS funds from acquisition projects that could not be completed by other entities.”
From this language, it is clear that the City is not obligated to move forward with the NRCS grant. This flexibility has not been apparent in the current debate. This is extremely unfortunate. Our community’s optimal economic development and conservation options currently appear to be hostage to concerns about perceived adverse outcomes if Davis doesn’t agree to the rote implementation of the obsolete 2010 conservation plan.
A Better Plan
CCV is now in the process of socializing a new proposed alternative for the Mace 391 conservation easement. An overview of the main deal points of the proposal are as follows:
- CCV will give approximately 30 acres at the southwest corner of the Shriners property to the City for the purpose of establishing a community farm (this has a value to the City in excess of $1.125M in land and avoided infrastructure costs).
- As a condition of receiving the community farm site, the City will agree to grant CCV a no-cost option to purchase the Mace 391 property at the City’s purchase price of $3.8M and forego the planned conservation easement on the property.
- CCV will place an initiative on the ballot so that the Davis voters can decide on whether or not a technology park will be annexed and entitled on the proposed 493 acre Mace site.
- If the initiative passes:
- CCV will place the remainder of the Shriners property into a conservation easement.
- 752 additional acres necessary to satisfy the 2:1 ag mitigation requirement will be put into conservation easements.
- CCV will purchase the Mace 391 property for $3.8M, effectively repaying the internal loan from the Roadway Impact Fees and restoring $1.325M to the Measure O fund for new open space conservation efforts.
- If the initiative fails:
- The City retains the 30 acre community farm parcel on Shriners.
- CCV abandons the Mace 391 purchase option and the City places the property into a permanent conservation easement.
In foregoing the conservation easement on Mace 391 and optioning the property to CCV, Davis obtains the community farm site on Shriners regardless of the outcome of the initiative vote. One crucial difference between this proposal and the current Mace 391 plan is that the voters get to weigh in on the merits of the planned conservation easement, which until recently has been quietly moving through the system with very little public awareness.
The Technology Park Decision
A decision to forego a conservation easement on Mace 391 is not a decision to build a technology park. This is about maintaining our community’s best economic development and conservation opportunities.
Under the CCV proposal the voters will make the technology park decision in 2014 after the project has been planned and fully-vetted by the public. The guiding principles of this proposal will be as follows:
- The project will be submitted to the Davis voters for approval via the initiative process.
- No residential.
- Minimal project-serving retail.
- Urban limit to stop future sprawl.
- No rezoning after entitlement.
I’m a community member who has lived most of my adult life in Davis – close to 34 years now. I’ve married and raised my family here. I received a PhD from UC Davis in genetics, served on the faculty of the Medical School, spun out a biotechnology company named Sagres Discovery that grew to about 70 employees before being acquired by a large bay area Biopharmaceutical Company, and started several smaller ventures including CCV; a new local venture capital company with the core mission of funding seed-stage startups in Davis and the surrounding region. I also cofounded techDAVIS, a new business association for senior technology executives from large venture capital-backed companies who have ties to Davis and/or UC Davis. I’ve been a committed and engaged neighborhood activist on both the opponent and proponent sides.
I’m not a developer. I’m a biotech guy with an academic background in cancer molecular biology. More specifically, I’m now a biotech guy trying to help solve some major structural problems that have stymied our community’s leadership for decades.
Davis has a critical unmet need for a technology park. We recently lost Bayer CropScience to West Sacramento. Other successful home-grown companies are also at risk of leaving in the near-term because they are having trouble identifying acceptable move-up opportunities. To make matters worse, companies that want to be in Davis are going elsewhere.
It’s time to call the question. Are we going to take action and move forward with technology sector economic development, or are we going to just continue talking about it while the current business cycle ticks away?
My goal in writing this article is to start a broader dialog about the Mace 391 issue and propose win-win solutions going forward. I put a plan on the table in May and now another in September. These are not the only possible plans, but they both have merit.
Let’s move forward and create a world-class technology park that is worthy of our community’s aspirations.
I can be contacted at email@example.com if you’d like to discuss this with me personally.