Commentary: The Way Forward Toward a Business Park

Proposed Location for Mace Innovation Park
Proposed Location for Mace Innovation Park

When I first heard the idea of a peripheral business park, I thought it was crazy to be planning for something that most likely would be dead on arrival. It took a very realistic assessment of the city’s fiscal condition and a participation in the community discussion on Mace 391 to recognize the need for the development of peripheral business parks.

The fiscal condition in the city of Davis is dire. Over the last decade and a half, we expanded pay and benefits during a period of unsustainable property tax growth to the point where we can no longer sustain our high level of services.

So right now we have three choices moving forward: we can cut back on services, we can raise taxes, or we can grow our tax base. In the short term we have done what we have needed to do – we cut back on compensation to employees, raised sales taxes in 2004, renewed them in 2010, and raised them again in 2014. If we wish to improve our roadway conditions we will need to raise parcel taxes.

However, in the long term, we as a city simply do not collect as much in taxes as we need to, and the best way we can move forward with growing our revenue base – while keeping Davis the community that endears itself to so many, preserving our essential character – is to develop business parks in a couple of key spots that reflect our community values: environmentally progressive, net zero, LEED certified, and high-tech oriented.

When I saw the PayPal campus last week my thought was not only that this was something really “cool” but it is something that would fit right into Davis, where university spinoffs would feel at home and the community could embrace them as an extension of what we have.

We are not talking about sprawling big box stores, chain retail, and suburban sprawl.

The reaction by some has been to talk in terms of 3 to 1 ag mitigation. I understand that impulse and it makes sense when we are talking about developer-driven processes that encroach upon our prime farmland, which still represents one of our greatest community assets.

But this is different. This has not been a developer-driven process. In fact, it is quite the opposite. The community over a period of time identified the need for attracting new business – high-tech start ups, med-tech, ag-tech business – as a way to generate revenue in a way that we can remain at the core of what we are, a progressive, environmentally conscious community.

We had a process where we identified potential locations for these parks. We see right now a process where we are moving forward on a Hotel Conference Center, Nishi, and now potential peripheral sites at Mace and the Northwest Quadrant.

We actually reached out to the development world to ask for expressions of interest through the RFEI process. They did not come to us – we went to them.

Now the question is how should this process play out. This is where it gets tricky. Some of the proposals are asking that this process occur in November and that we allow for small modifications in Measure R for them to reduce their risk.

I want to make it clear –  I understand completely why developers want to minimize their upfront investment on projects that entail a good amount of risk. However, I believe the appearance of meddling with Measure R will result in the shift in the debate from the merits of the projects and the need for the project to a debate on Measure R and the attempt to go around it.

That is not going to lead to a good process. We have to understand that there is a sizable segment of the community that is simply going to vote against any project and we are dealing with a small segment, 10 to 20 percent, that could legitimately go either way.

November presents other problems, as well. We would have to act by July 15 to put something on November’s ballot. The council and much of the community then disappear until late August, and potentially not until after Labor Day. Do we really think that the project proposers can make the case in eight weeks?

Let us not mince words – while I believe we can pass a project on the periphery, this is going to be a heavy lift and it will take reach community outreach to make the case.

So my preference is March 2015. I think we need to run the business park proposal – pick the best one to move forward first – concurrent with the parcel tax proposal. Lay it all on the line.

It is a very simple message – we are in fiscal trouble. If we do not do something, our roads will crumble, our parks and greenbelts will decay and will eventually be closed. We will not have the resources to run our recreational programs.

As we know from our other discussions and the evaluation of the polling, we need to really educate the public on the stakes and the troubles.

The advantage of running the innovation park with the parcel tax is that we can present this as a package to the voters. In the short term we need to be able to produce the money to take out bonds so that we can repair our roads and infrastructure.

In the longer term, creating a business park is a way to generate new revenue for the city so that we do not have to constantly raise taxes to pay for programs and infrastructure.

This is our need and this is our way forward. That is a powerful message.

To get there however, we need the developers to step up a little bit more. They have already come forward with project proposals, but instead of trying to circumvent Measure R, they need to take this to the people. If the Measure P folks, with limited resources, could put their measure on the ballot and get it passed, there is no reason that the developers can’t do the same thing.

Then it is not about trying to circumvent Measure R, it’s about the members of the public supporting a project enough to put it on the ballot.

Finally I need to make this clear, I want to see good projects come forward. We have a chance to do some very nice things, neat stuff. I’m not going support just any project that gets thrown out there, I want something great and I think we as a community can do great things.

This is our time, and hopefully we will not stumble into past bickering and can rise above it.

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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34 Comments

  1. SODA

    Where are the comments? No longer listed below the ads?? Suggest there be a general section for DV announcements of web issues so that we know you know there is an issue and you are working on it. Many sites have this sort of format. Thx.

  2. Davis Progressive

    i think pushing this to march will maximize its chance for support. i understand that we will need more details from the developers as to what these will look like. i’m not signing up to a blank check but i hope they give us something the community can support.

  3. TrueBlueDevil

    Can someone (David, Frankly, or ???) provide us with a few concrete, plain English, examples of the average (not pie in the sky) revenues such a project would produce yearly? i.e., a 200-acre hi-tech parcel? How many million would such a park generate per year, what costs would it add to the city (sewer, water, street cleaning, law enforcement, fire inspections, etc.), and what is a realistic net benefit per year? (Ballpark figures are fine.)

    Are hi-tech or “innovation” parks taxed at the same rates as, say, a Costco? Are retail, big box, light industrial, and innovation parks all treated the same? Does one type of business typically generate more revenues than another?

    Speaking of a Costco, I don’t see why they are a boogie man as Americans flood there to buy their goods and services, and Davisites drive there in droves. Would a Costco on 113 or 80 have filled in 1/4 or 1/3 of our budget hole?

    I liked what Ms. Swanson said about not letting the pursuit of perfect get in the way of good. What percentage of the town are simply snobs. A business like Costco is ranked as a great place to work, offers hundreds of middle-class jobs and bargains for consumers.

    BTW, David, I have not been to Paypal, but I’ve been to LinkedIn. It had an interesting mix of modern / hi-tech architecture, but on the outside it had native grasses, and a more suburban / rural / Stanford-esque feel. My companion and I were also the only people there over 35. Or was it 30?

    1. Frankly

      A poster named Jeff Boone covered this in a post about Mace 391.

      If I recall, assuming a 10-year complete build out we would be looking at $12 million per 200 acre parcel, and about $6 million per year after that.

      Davis needs another $50 million per year in general fund revenue to support our services and amenities and to pay all the obscene pay and benefits to our city workers.

      If we consider $10 million per year from sales tax increase and a $50 parcel tax and also a few more cuts, then we need another $40 million per year in ongoing tax revenue… we are going to need about 1200 acres of business park development and/or more retail, to enable us to live within our means without cutting services.

        1. Frankly

          Yup. $50. That is enough.

          I have been consistent in this.

          You can fund pools and things – the nice to haves – with economic development. Hell, require a 50 ft. pool in each business park.

          1. Davis Progressive

            my view is that $50 only gets us to 63 pci, if we’re going to do this, we need to go to $100. you’re talking an additional $4 per month.

      1. TrueBlueDevil

        Thanks. See below.

        I don’t know why these basic facts aren’t included in every discussion since it is so relevant and critical. Nero playing his fiddle while Rome burns?

        If I were a City Manager, if this is all true or even close to true, there would be no way I’d add in a 50-meter pool without a thorough study, detailed financials, and maybe even a RESERVE FUND to cover any increases in operating costs. Get DJUSD to pitch in funds, Master’s swimming, etc.

          1. TrueBlueDevil

            Don, thanks. What I meant, was, is any of the open land surrounding the city suitable for a winery / vineyards?

          2. TrueBlueDevil

            Don – yes. Does it have the nutrients, qualities, winds, temperatures, etc., to growing one or several varieties?

          3. Don Shor

            Jess Jones Vineyard has several varieties on his place south of Dixon. Purple Pearl grew several (property just sold this spring). They could certainly have a vineyard and winery on the property in South Davis or Mace or anywhere else locally where the soil is good. They could even grow hops for the burgeoning craft beer market (check out the hop vineyard along I-80 near Kidwell when you head west to take pictures of the sunflower fields that are blooming right now).

      2. DavisBurns

        How can that be. $10 from sales tax increase AND property tax increase but after buildout in ten years we can expect $6 million from an innovation park? Don’t know if that’s net, sure hope so. There’s no place for 1200 acres to develop.

    2. Davis Progressive

      i haven’t seen firm numbers, but i recall reading there are really two forms of taxes at play. one is property tax and when a company brings in equipment, that equipment becomes part of the tax. the other is sales tax, if there are point of sales made. the developers were project several million on the low end.

    3. DavisBurns

      True blue devil, thank you for your questions. I want to know the same thing, is there a track record for “innovation parks”? What revenues can we expect, what will it cost the city to pay for services, and what kind of net should we expect? I have read LOTS about how we are in dire need of innovation parks but little about revenue. I google innovation parks and I can read about them and how great they are, the next big thing but if there aren’t back of the envelope $$$ we can reference, seems like we are jumping on a bandwagon to somewhere but we don’t know where.

      In terms of costco, I like that they pay employees a living wage including benefits and that’s why I shop there and at Nugget but not at target. We are not a large enough market for them to build a store here even if that was non controversial, plus it is too close to the one in woodland.

      1. TrueBlueDevil

        DB, sorry of my questions are repetitive or ignorant, I am new to some of these discussions. But I think we need some basic facts and parameters before we start pushing x, y, or z.

  4. TrueBlueDevil

    How is the city paying for these shortfalls now? Is a large chunk of it the delayed street repair, and more items like that? Parks, 50-meter pools, etc.? And high pension costs? Pensions are a huge problem.

    What percentage of the point of sale (POS) does the city get?

    Thank you, Frankly. If you are even close, it means Davis will need all three of these developments, and cuts, and more.

    Does this include the $70-90 Million I read in the DE that will be needed to upgrade the wastewater treatment plant, which also, apparently, projects for a davis population of 120,000?

    1. Mark West

      How is the city paying for these shortfalls now?

      It isn’t. Basically we have ignored the roads for the past several years, and only recently started funding the retiree health care deficit, all so that can continue to offer unsustainable compensation to City employees. We don’t even know how much money will be needed to deal with the rest of the backlog in maintenance for the parks, pools and buildings because no one has bothered calculating that figure yet.

      We need to increase taxes significantly (something on the order of $500 / parcel), decrease expenses – such as by reducing total payroll costs by 15-20% – and develop 1000-2000 acres of new business properties. Anything short of those steps will not be sufficient to repair the damage that has already been done by our overconsumption.

      When we have accomplished all of that I think it will be appropriate to start talking about a new swimming pool.

      1. Frankly

        I agree too, unless the business parks include a pool and some special Mello Roos tax to the business properties to pay for the operation.

        It really comes down to needs and wants. What do we need to fund, and then what are those nice-to-have amenities. We are well into the budget red without enough funding to take care of our critical needs. So even though people want a new pool, it is not in the cards until we get back into the budget black.

        If folks in the city want to fund a pool with a tax, then make it a special tax so we don’t pollute the other more critical considerations. In other words, get the signatures do the campaign and put up a measure for a pools parcel tax.

          1. Don Shor

            If folks in the city want to fund a pool with a tax, then make it a special tax

            Agree.

      2. TrueBlueDevil

        Overconsumption?

        Or poor planning, lack of revenue, and overconsumption (i.e., salaries / benefits / etc.). Three or four major things seem to be going on.

        Does anyone ever call out the former leaders who got us into this mess? Or do we just blame the citizens who wanted the proverbial Free lunch, which they gave us?

        Can we get some examples of overpaid employees, beyond the fire fighters? Are we talking teachers, general staff, ???

  5. Michael Harrington

    Jeff Boone is a thoughtful reasonable downtown business manager. He and I have disagreed with many of my policy decisions but that’s fine. He’s a good person and listener. He does his homework. I suggest you get to know him before repeating trash talking by others.

    1. Barack Palin

      My statement about Jeff Boone was done tongue in cheek just as I believe Frankly’s response also was.

      I know that Jeff Boone is a good person.

      But maybe Frankly can clarify his response.

  6. Tia Will

    Speaking of new businesses, does anyone know where the two strawberry breeding researchers now at UCD planning on opening their new business once they leave UCD ?

    1. South of Davis

      Tia wrote:

      > does anyone know where the two strawberry breeding researchers
      > now at UCD planning on opening their new business

      Sounds like someone else was listening to NPR tonight…

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