This article is meant to be a broad illustration of innovation parks across the United States that may have similar context to one in Davis. To be clear, no specific project has yet been proposed for Davis. Based on analysis from the previous Innovation Park Task Force and the findings from Studio 30 during that effort, I will use the comparison target of a 200-acre park to be illustrative. Realizing that the details matter, some of this discussion is presented based on gross assumptions and the actual outcome may vary dependent on a specific project.
As some of you have read in my previous articles, there are several ways that Davis might gain financially from an innovation park. These include real property and unsecured property taxes, sales and business-to-business taxes, fees and permits, ongoing rate-payment for water and sewer services, and the need for an ongoing per foot assessment to generate constant revenue for the City. As you might surmise, the discussion of how much revenue for the City an innovation park might generate is dependent on many variables including overall size of the development, total amount of square footage, need for services based on design, existing infrastructure and length of time for development.
In a very gross comparison of the cost for services versus revenue to the City, there are many studies that indicate that commercial/industrial land is a net gain to a jurisdiction over time whereas residential is a net drain. A good summary by the Pennsylvania Land Trust Association on the ConservationTools.org website summarized it well by saying that “nearly all of the studies that have been undertaken show that the ratio for residential land is above 1.0, signifying that residential land results in a net drain on local government budgets. On the other hand, the ratios for the other two land use categories (commercial/industrial and farmland/open space) are usually well below 1.0, representing a net tax gain for the municipality.” (Click here for link).
But in order to really get a sense of what the potential for positive revenue flow might look like for a project in Davis, we need to first assess what the development might look like. This is primarily dependent on several variables that will need to be defined before a calculation of net benefit to the City can be accomplished.
One important factor would be how dense a project might develop. This is often expressed as FAR, or floor area ration. It is the amount of land that is covered by a building versus the amount that is left to surface parking, parks, greenways or open space. A building of 21,780 square feet on a single acre (43,560 square feet) would have an FAR of 0.5. A two story building on that same footprint (21,780 square feet on the ground floor on a single acre) would have a FAR of 1.0. So you can quickly surmise that two pieces of data are important here: the height (number of floors) of a building and the amount of coverage on the ground floor relative to the amount of open space for that same building envelope.
To extrapolate some simple calculations, if an innovation park included a mix of 2 to 6 story buildings across a 200 acre park (so an average building height of about 45 feet, or 4 stories), you can see that a FAR of 1.0 means we would expect to see about 8.5 million square feet of structures. Translated a different way, that means that for every acre, about one ¼ would be covered in a 4 story building. So a FAR of 0.5 would result in about 4.25 million square feet.
You can rearrange this many different ways, based on heights and layout, but we can at least get a magnitude of square footage. And over time, in a more metropolitan-fringe setting like Davis, densification can happen by converting surface parking into structured parking, which frees up more space for greenway and parklet amenities and the potential for additional building area to be accommodated within the existing development.
Another factor that will impact any proposed project (and will ultimately dictate the size of any development) will be the existing versus required infrastructure. This includes freeway access, roads, transit and alternative transportation routes, water, sewer, gas, electric, etc. The greater the amount of infrastructure that needs to be built to serve a potential innovation park, the less available funds in the overall project to accomplish some of the extras (like reaching for higher sustainability goals of LEED gold and platinum versus just LEED silver). There are also impacts on the type of design and layout of a park based on infrastructure. And the overall FAR of an innovation park will be dictated by the trade-off of infrastructure costs versus developer revenue from proposed structures.
There are other factors that future articles will discuss, but at this point in the conversation it might also be best to start to consider examples of what we want an innovation park to look like and what industries we are trying to serve.
Below is a short list of parks that are focused on the innovation economy and include close proximity to a research university.
Stanford Research Park – over 700 acres, anchored by Stanford University and Stanford Research Institute.
San Francisco Mission Bay – about 30 acres, anchored by the expansion of the UC San Francisco Medical Center.
Torrey Pines Mesa Technology Center – about 400 acres, anchored by UC San Diego, Scripps Institutes and CSU San Diego.
NASA Ames Research Park – about 500 acres, anchored by NASA, UC Santa Cruz, Carnegie Mellon, Purdue and Singular University. Includes expansion of Google campus.
Sacramento State’s innovation center – about 250 acres, south of Sacramento State (recently announced).
Other examples around the US include the innovation park being built next to the Champaign-Urbana campus of the University of Illinois, Research Triangle Park in North Carolina, the University Research Park at University of Wisconsin (Madison Campus) and the New Orleans BioInnovations Center. If you would like to take the time to educate yourself on the many variations on how cities and universities have tried to address the need for more research and development facilities (often call innovation centers), you can find lots to read about at the Association of University Research Parks (AURP) website: www.aurp.net
In the next article, I will focus on some very broad (and general) valuations as to how an innovation park might best serve our communities needs for growth space for tech companies (jobs and investments) balanced with a park that generates on-going revenue for the City.
In the meantime, let me know your thoughts on the different innovation parks highlighted here or from your own travels. You can reach me at email@example.com or @mrobertwhite on Twitter. You can also start following the discussion on tech happenings in and around Davis by following the Innovate Davis Facebook page, or the #InnovateDavis hashtag on Twitter. I also encourage you to post and tweet your own experiences and activities.