Yesterday, the Vanguard posted an article outlining several projects that had been proposed for the coming years that might help spur on economic development, and more importantly, revenue for the City. Though this list can seem pretty exciting or daunting, depending on your perspective, it is important to note that is a snapshot that covers many years.
Before I specifically discuss the projects outlined in that article, let me take a moment to note that economic development (in any community) is not based on absolutes. I like to compare it to weather forecasting. We have lots of science and statistics to go in to our models, but like weather, economic development and the economy as a whole is a dynamic system, so you can still predict incorrectly. And that is why I think economic development is both an art and a science.
Take for example the most recent economic downturn. Some of us saw this coming clear back in 2005 (and maybe before that) and started to talk with uncertainty about projects and proposed financing structures. We could have certainly been wrong, but the indicators were there if you wanted to see them. Of course, most of us that were getting concerned had no real concept of just how bad it might become. Nor just how long it would last and the scope of the deep impacts to the job market and the psyche of the American people.
And it resulted in outcomes most people in California could never imagine. Things like the abolition of redevelopment and Enterprise Zones, which took funding tools away from the local government for projects of great importance to their communities. In Davis this meant a lack of funds for a new parking garage in downtown and funds to help create a badly needed conference center. And we are not the only community to be left with partial project plans, or worse, partially completed projects.
This has necessitated the need for better financial models for communities to assess projects to be sure that we can finish what we start. And that a community gains maximum mutual benefit from a project. And that is where some of the discussion turns to preference. If you have no job or are driving many miles because local opportunity doesn’t exist, new businesses can be a welcome opportunity. If you would like to see more people dining and shopping in downtown, then tourism and local employment can most certainly be a welcome circumstance.
Conversely, if you have what you need and are comfortable with your current situation, new construction or considerable growth can be an unpleasant condition. And of course there are many views in between.
We have talked at length in the community about needing an economic impact model for projects as they come forward so that the City Council and community can make wise decisions based on overall net benefit. And though I agree that such models can be helpful, I would also caution that it is like a weather prediction model. The forecast is only as accurate as the data that is fed into the model.
For example, creating an economic impact model for a proposed innovation park at Mace Boulevard and Interstate 80 will be an important step for the community to assess its desire for such a project. But the model needs to have the inputs that will accurately reflect the closest forecast to reality as possible in order to create a true cost-benefit discussion. Assuming amounts of building square footage, types of facilities, jobs, traffic, needed infrastructure, and revenue to the city from permits, property taxes and sales taxes create an interesting actuarial puzzle, but these inputs are based on broad assumptions that most certainly won’t reflect the actual project. And therefore set up false expectations.
For an example, if the proponents for a Mace Innovation Park decided to only propose a project that would utilize existing infrastructure, then the total square footage might be only two million square feet. And the timing of when that amount of buildings might be constructed would be dependent on the demand from businesses that want to move there. And though this would certainly be helpful to the local economy, the economic impact from a project of this size would be far less than one of four or six million square feet.
To put these projects in to perspective, two million square feet on 200 (+/-) acres means there are one story buildings on one out of about every four acres. The remaining three acres include parking, open space, etc. And this would likely be enough room for about 3,000 jobs (depending on the types of facilities constructed – less for manufacturing, more for office and research). So four million square feet can mean two story buildings covering approximately the same amount of land, but increasing the amount of parking demand and increasing the amount of jobs by a factor of two (6,000).
Why this simple calculation is important to point out is that we also have local policies that overlay the aspects of what we want to see in any development. These policies drive costs and desirability, in both positive and negative ways. Davis has a long standing policy of conserving land and creating denser development. This means that an innovation park at Mace that embraces the future and meets our community values would likely be a mix of building heights to take advantage of being close to the city and encouraging employees to walk, ride bikes, and use public transit.
And we would likely want to encourage the build-out of such an innovation park to use land wisely and sparingly, driving the desire for three and four story buildings instead of low, spread-out facilities. Such development becomes more financially viable and can deliver better amenities to both the tenants and the community. Things like LEED Gold sustainability measures for buildings and the ability to create mass transit options become more viable. And thinking even more grandly, it make options like continuous shuttle service from the university and downtown, and possibly even an additional stop on the Amtrak during heaviest commute times, become more viable.
With respect to a new hotel and conference center, this again becomes a discussion of economics, but also preferences. The new revenue created from the hotel occupancy tax, the sales tax and the hotel operations would most certainly be welcome by many. But some would prefer the location be different. Or that the height be different. And though I agree these are things that need to be assessed, it is important that we also assess these things in context.
For example, location is dependent on several factors beyond just community preference. These include acceptability by the hotelier and hotel brand with regard to maximum freeway exposure, willingness of a landowner to develop, ability to attract financing for a project based on cost-benefit factors, and creating amenities that compete with the region (not just within the city). If these attributes (and many others) cannot be balanced, then a project becomes infeasible.
In discussing height, some of these same aspects come in to play, most specifically financial drivers. But in the context of Davis, I would offer this observation – within 1250 feet of this site, there are building on campus that are approaching 100 feet tall (8 to 10 stories). These buildings are just 250 feet from one and two story houses right across the street. For all intent and purpose, they are towers within neighborhoods. I understand that the university has the ability to construct facilities without the community’s approval, and I realize that many in the neighborhoods of A and B Streets may not have been in support of these building when first constructed. But now that some time has passed, they have become part of the built environment are anything but intrusive and overwhelming.
I can appreciate everyone has different preferences with respect to heights and the built environment. But let’s not forget that the same arguments of height and attractiveness were used by Parisians when the Eiffel Tower was built. And yet, it has become a placemaking amenity and an icon that identifies Paris. And the Mondavi Center is well over 100 feet tall, and yet most would agree that it doesn’t feel imposing or out of place in Davis. I think we can all agree that a hotel and conference center will be a significant departure from the current structures, but I would encourage us all to be honest in our assessments and separate personal preference from context in the community. It’s okay not to like tall structures or density. But it would not be a fair statement that this is not an existing condition in Davis.
For each of these projects, part of the planning process will include an economic analysis. This will include potential revenue to the city, as well as positive economic impact and costs to the community. But until a project is better defined in size and scope, it is merely an arithmetic exercise that requires time and resources that are not currently in abundant supply. And the city staff are not equipped with the tools nor consultants to conduct this work without the proposed projects financially supporting the efforts. I realize there is a need by the community to generate and consume this info in short order, but I would ask your patience and recognition that each project will be conducting this economic analysis as part of their planning process.
To address the discussion on the scope and timing of projects enumerated in yesterday’s article, let me state that even though we are talking about them today, the time horizon for these projects is over the next 5 and 10 years. These are not instantaneous and many of them do not even have financing lined up yet.
To help, let me lay out a brief (tentative) timeline of when these projects might start, depending on the community’s support. Remember, this is for illustrative purposes only and pre-supposes a specific set of outcomes on some very important community votes and dialogue. It also represents a best guess at some project proposals that are not even submitted at this point.
* All Year – Outreach on Downtown/University Gateway District (Nishi)
* All Year – Outreach on potential Mace Innovation Park
* All Year – Outreach on potential Hotel/Conference Center at Richards Blvd and Olive Drive
* All Year – Outreach on potential Richards Boulevard Entrance reconstruction
* March – Groundbreaking for the Jan Shrem and Maria Manetti Shrem Museum of Art at UC Davis
* Spring – groundbreaking for Cannery project
* Summer/Fall – infrastructure development at the Cannery
* November – possible community vote on a Mace Innovation Park proposal
* All Year – If previously approved by the community, project planning and entitlements for Mace Innovation Park proposal
* All Year – project planning and fundraising on potential Richards Boulevard Entrance reconstruction
* Spring/Summer – first housing units available at the Cannery
* Summer/fall – if approved by City Council, demolition and infrastructure improvements started on potential Hotel/Conference Center at Richards Blvd and Olive Drive
* June – University likely begins demolishing Solano Park married student housing, making way for a new project
* November – possible community vote on Downtown/University Gateway District (Nishi)
* Date Uncertain – City Council approval sought for potential Richards Boulevard Entrance reconstruction
* Date Uncertain – possible proposal for innovation center near Sutter Davis Hospital
* Spring – Mace Innovation Park might begin infrastructure development
* Spring/Summer – if previously approved by community, project planning and entitlements for Downtown/University Gateway District (Nishi)
* Date Uncertain – construction on potential Richards Boulevard Entrance reconstruction
* Date Uncertain – opening of the Jan Shrem and Maria Manetti Shrem Museum of Art at UC Davis
* Date Uncertain – possible community vote for an innovation center near Sutter Davis Hospital
* Spring – Mace Innovation Park might begin development of approximately 25% of the 200 acres for specific users.
* Date Uncertain – potential opening of Hotel/Conference Center at Richards Blvd and Olive Drive
* Date Uncertain – if previously approved by the community, infrastructure improvements begin for Downtown/University Gateway District (Nishi)
* Date Uncertain – if previously approved by community, possible project planning and entitlements for an innovation center near Sutter Davis Hospital
* Spring – Possible opening of first businesses at proposed Mace Innovation Park
* Date Uncertain – if previously approved by the community, first businesses and housing at Downtown/University Gateway District (Nishi) might open
* Date Uncertain – if previously approved by community, infrastructure build-out for an innovation center near Sutter Davis Hospital
* Date Uncertain – possible construction of facilities at an innovation park near Sutter Davis Hospital
* Date Uncertain – possible first opening of businesses at an innovation park near Sutter Davis Hospital
Though I am sure I have forgotten something, this is a good list to start from in discussing the next 6 plus years of major project proposals. Please note that I tried to be specific on what would require a community vote and what requires City Council approvals.
In short, the major projects for innovations centers at Mace, Downtown/University Gateway District (Nishi), and near Sutter Davis Hospital all require some kind of community action – a Measure R required vote of the community or equivalent action. Only the Downtown/University Gateway District (Nishi) project is proposing housing as part of the project. The landowners and potential developers of innovation centers at Mace or near the Sutter Davis Hospital have both acknowledged that housing proposals as part of a development in these areas is not desired by the community at large, as reflected by recent Measure J/R votes.
The Hotel/Conference Center at Richards Blvd and Olive Drive and potential Richards Boulevard Entrance reconstruction would require approval by the City Council. Both of these projects are working on initial planning and conducting community outreach. The proposal for the Richards Boulevard Entrance reconstruction does not include widening the motorized vehicle access under the train tracks, but does include options for additional access for bikes and pedestrians. It also potentially addresses off street bike and pedestrian traffic crossings for Richards Boulevard, which will greatly enhance traffic flow in the area.
I look forward to your thoughtful comments and examining questions. My email is email@example.com if you choose to email me directly.