My View: City’s Innovation Park Strategy and Peripheral Parks

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Internal View of Mace Ranch Innovation Center
Internal View of Mace Ranch Innovation Center

Last week at the Vanguard Innovation Park Forum, Michael Bisch, the President of the Davis Downtown stated, “Let’s be clear, we’re not talking about one innovation park. We’re not talking about one physical location. The strategy that the city council adopted based on the work by Studio 30 was the dispersed strategy where you would have innovation in a number of places – some of those locations were on the periphery and some were within in the core, immediately adjacent to the university. That would be the downtown, the gateway area, and the Nishi property. That long ago was determined by the city council to be an innovation district.”

He said, “It is all of those pieces together, what comprises the innovation center, that Studio 30 talks about and that the city council said yes that’s the strategy that we’re pursuing.”

In a discussion on the Vanguard this week, he cited the resolution passed on November 13, 2012, by the Davis City Council. He noted that the city’s policy is to “pursue a ‘Dispersed Innovation Strategy’ offering flexible space (scalability) supporting needs of growing and new businesses.  A combined approach of near-term close-in hub with mid-term, larger less constrained edge sites offer the best mix of University proximity and expansion capability for the City…”

He writes, “There you have it.  Until the CC decides to go in a different direction, ‘Dispersed Innovation Center Strategy’ with an ‘Innovation Center’ comprising the entire community is the law of the land.  This was the culmination of a multi-year public process, extending back to, and including the work of the Businesses Land Park Study, which included input from many stakeholders.”

Mr. Bisch adds, “It’s not clear to me why some champions of a peripheral innovation park are running away from the Dispersed Innovation Strategy.”

The same resolution continues with both a near-term and a mid-term strategy. The near-term strategy: “The Gateway (Downtown Research & University Innovation District) option offers the best close/in location due to the proximity to University and property owner and University interest, and should be pursued as the City’s top innovation center priority.”

That process has been going forward and Nishi is moving toward a point where it will reach a Measure R vote. There are some issues that are going to have to be resolved, in particular how they plan to handle traffic and circulation issues.

However, right after the near-term strategy was also a mid-term: “The East and West ‘edge’ sites offer viable options for location and size of larger innovation centers meeting needs of growing mid-sized companies, and should be continued to be explored as part of a mid-term Dispersed Innovation Strategy.”

It is important to understand what Studio 30’s report indicates. “Studio 30’s research suggests that the City pursue a broad strategy to attract innovative businesses that offers a number of sites that are scalable and range in size so the community can accommodate an incubator, startups and expanding businesses. Some should be directly in contact with the University. This mix of small and large sites allows the city the flexibility to successfully attract, grow and retain innovation businesses. External sites have the potential to support the most jobs because of their size and ability to accommodate a wider variety of both size and type of businesses.”

But here is a key point raised by Studio 30, which we quoted from yesterday. Studio 30 wrote, “The current isolated and dispersed sites that are available and appropriately zoned are not adequate in terms of size, location, or configuration (and related constraints) to address the emerging market need of an Innovation Center.”

The study continues, “With available reasonably priced land and effective marketing to innovative high tech companies, Studio 30 estimates Davis could absorb up to 10 percent or around 100,000 square feet of the 1-1.5 million industrial/office square footage absorbed annually in the Sacramento region. Because of this Studio 30 estimates Davis needs at least 200 acres for business development and expansion over a 20 +/- year time horizon.”

They continue, “A combination of one ‘close in’ hub or incubator with one (or in some future time, two) larger, less constrained (and presumably less costly) edge site offers the right mix of University proximity and identity with the expansion capability to address job growth and rapid business expansion.”

So, from the start, Studio 30 recognized that, while in the short-term they were going to pursue a small location, because that’s what we had, ultimately that wasn’t going to suffice. I believe that Studio 30 thought any peripheral innovation park was going to be years off and, therefore, they had to devise a way to move forward with economic development absent the kind of space that either or both of the proposed innovation parks are likely to generate.

However, the world would change very rapidly.

Council would approve the Studio 30 report in November of 2012. By March of 2013, Rob White was hired as the Chief Innovation Officer for the City of Davis. Then City Manager Steve Pinkerton said in a press release, “Adding a CIO to city staff will provide the crucial link between the City and prospective businesses looking to move to Davis, and will help develop Davis as the innovation hub for the region.”

“The CIO will be responsible for creating the culture, climate and environment that is needed for innovation, while removing barriers, both real and perceived, that hinder business growth.”

In June of 2013, we had the proposed Mace 391 project that would have put an innovation park on the large, city-owned peripheral property. However, process issues derailed the project before it got started and a later effort to re-open discussions was killed by open space advocates. That said, Mace 391 opened the door to a real discussion on peripheral innovations parks that was not possible before.

The movement toward a peripheral park became more urgent when Bayer-Agraquest announced that they were leaving Davis due to lack of available space in the summer of 2013. Moreover, the city of Davis grew increasingly concerned that another native company, Schilling Robotics, was needing additional space and might have to exit Davis as well if that space did not become available.

The renewed urgency of creating a landing spot for Schilling (and, really, there are probably three or four companies that might be in a similar position) coupled with the foreclosed opportunity on Mace 391 pushed the process, ironically, back to the Studio 30 report and the Innovation Park Task Force.

The Studio 30 report identified two locations on the periphery where the owners had expressed interest in developing the land as an innovation park.

“The East and West sites both offer larger scale ‘move-up’ opportunities with excellent acreage, infrastructure, location, and car, bike and transit accessibility,” they write.

They did note, “The East site seems preferred at this time because it offers a readily available agricultural mitigation strategy, and may have less neighborhood development concern.”

However, while Studio 30 might give a slight edge to the East, it was only slight. They write, “The West site has recently gone through additional land planning studies, and may also offer successful agricultural mitigation. The West site is slightly favorable in terms of University and downtown/proximity. Both sites offer interesting opportunities for innovative agricultural related research, urban farming elements, and sustainable/green site and building design opportunities…”

Based on that they conclude, “Both sites should be pursued for now.” They write, “Development on any of these sites will entail substantial entitlement challenges (such as agricultural mitigation); in particular, a community Measure R vote will present a major challenge for future development.”

Both the Mace Ranch Innovation Center and Davis Innovation Center (Northwest) have come forward with applications, and now there will be a process leading up to a Measure R vote.

So I think the reason why the focus has been on the peripheral spots is due to circumstances that arose after the council adopted the Studio 30 report strategy. First, necessity. As the council made clear back in July, the first rule of economic development is to keep what we have. Losing Bayer was a blow, but probably unavoidable given the deal they got. Losing Schilling and others would be a setback.

Second, opportunity. The string of events in 2013 made what seemed impossible, in the short-term in 2012, possible only a year later.

Third, if you really read the Studio 30 report closely you see that all along they are angling for the 200 acres of peripheral business development over a 20-year period. They just didn’t believe that was going to be possible as quickly as it became possible.

Nevertheless, the three-pronged strategy to pursue a “Dispersed Innovation Strategy” seems to remain intact. The city continues on course for the Nishi-Gateway project, in addition to the pursuit of the east and west “edge” sites. In the meantime, the city is looking to maximize existing inventory.

Why are we focused on the east and the west? Well, that’s simple. They are the big, peripheral projects that are going to require what is likely to be contentious Measure R votes. We are not ignoring Nishi, which is moving forward as well.

It is more difficult to cover startups and small companies in small spaces in the downtown and other existing areas. There aren’t large policy decisions there and most of those companies are not reaching out for media coverage.

But again, I think the bottom line is this quote from Studio 30: “The current isolated and dispersed sites that are available and appropriately zoned are not adequate in terms of size, location, or configuration (and related constraints) to address the emerging market need of an Innovation Center.”

Therefore, we are where we are.

—David M. Greenwald reporting

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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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18 thoughts on “My View: City’s Innovation Park Strategy and Peripheral Parks”

  1. Tia Will

    As the council made clear back in July, the first rule of economic development is to keep what we have.”

    I would agree with this statement if that were really what is at stake. However, this is not about keeping what we have in its current state. It is about  saying that we should keep what we currently have at whatever size it aspires to be at whatever cost we may incur. This may or may not be a good plan. It would appear to me that the Studio 30 Plan was designed based on the premise that large scale business projects were the only way forward. That also may or may not be the case.

    In the administrative portion of my job, people frequently bring forth plans that entail more than one part. I do not see it as our job to take every part as essential to the success of the whole until that has been proven. I think it is entirely reasonable to review the parts, decide if some are better than others, decide which if any will stand alone and move forward with those that are the strongest. Perhaps other parts need some reworking, or perhaps they are not really needed to reach the stated goal.  While I do not believe that it is sound reasoning to reject the plan outright ( pretending no problems exist), I also do not believe that it sound reasoning to say we have to do something, so we will just accept

    Which brings me back to basics. The first thing that I would like is a clear definition ( along with accompanying numbers) of just what our goals are. Some goals that I have seen put forth are the following. For each I would like someone to provide their best estimate of the anticipated financial gain to the city and or region and the anticipated time frame to reach this gain.

    1. Help with the current financial crisis.

    2. Provision of economic stability over the next 5 years. 10 years. 20 years.

    3. Establishment of Davis as the “regional hub” for innovation. What are the anticipated benefits to the surrounding communities from this strategy ?

    Some will probably say that this is irrelevant or impossible to predict. As an administrator, my position would be that if we do not have any data, we either make the projections based on information we do have or that we decide to run a small pilot project to see how our best estimate actually plays out in the real world. What I would not do is say, well that sounds good, let’s just go ahead, invest, and hope for the best.

     

    1. Anon

      Tia:
      “1. Help with the current financial crisis.
      2. Provision of economic stability over the next 5 years. 10 years. 20 years.
      3. Establishment of Davis as the “regional hub” for innovation. What are the anticipated benefits to the surrounding communities from this strategy ?”

      Rob White indicated that an assessment district would be formed for any innovation parks.  By his estimate, a 200 acre business park, conservatively, would generate a $12 million a year revenue stream at full buildout as a result of forming such an assessment district.  His prediction was that buildout would be in approximately 10 years.  This revenue does not include any additional sales tax revenue that would be generated directly or indirectly from an innovation park.  We also have to put in place a revenue sharing agreement with the county, since two of the innovation parks would be outside the city limits on county land.  But the county cannot take any more than what covers the services it provides – in other words it cannot make a profit on the deal.  And if Davis really takes off as a regional innovation hub, it will generate interest in nearby communities for other businesses to locate, e.g other high tech businesses, big box retail.

      1. Tia Will

        Anon

        Thanks for the start at a summary of some objective information. Now would that $12 million per year apply with one 200 acre development, with more than one, with all three plus Nishi ?  How would do you see these developments as adding to the need for more such high tech businesses in surrounding communities ?  How much demand is there across the region ?  How much is this likely to be affected by 3-D manufacturing capabilities, by other changing technologies, by changing demographics ? Not pretending to know, just asking questions that I think need to be acknowledged and addressed before we start thinking about a vote.

        1. Frankly

          I think I know why your name is Tia!  You tee-a-up one question after another in an endless barrage of challenges that only end when those in opposition say “uncle” and give up.

          You can’t be serious asking all these questions?  Why hasn’t your profession cured cancer yet?  And don’t respond that there are things that medical science does not know yet.  You guys have been working on a cure for many decades.

          The point I am making here is that decisions for change and progress do not require 100% perfect knowledge and a perfect crystal ball.  Sometimes good enough is just good enough.

        2. Don Shor

          Now would that $12 million per year apply with one 200 acre development, with more than one, with all three plus Nishi ?

          As she said: “By his estimate, a 200 acre business park, conservatively, would generate a $12 million a year revenue stream at full buildout as a result of forming such an assessment district. His prediction was that buildout would be in approximately 10 years.”

          How would do you see these developments as adding to the need for more such high tech businesses in surrounding communities ?

          I don’t understand the question.

          How much demand is there across the region ?

          Perhaps a better question would be whether objective commercial brokers and analysts think there is sufficient demand to fill the proposed innovation and business parks within a 10 – 20 year period.

          How much is this likely to be affected by 3-D manufacturing capabilities, by other changing technologies, by changing demographics ?

          Not much.

      2. David Greenwald Post author

        “His prediction was that buildout would be in approximately 10 years.”

        My understanding is they are looking at 350,000 square feet a year build out over 20 years for the two sites – should both sites come online.

  2. DT Businessman

    David, you do a fair job of describing the political shift in the community that is increasingly facilitating innovation, start-ups, and increased commercial activity.  That said, I think the shift has been taking place over a significantly longer period of time and is broader-based that you describe above.

    As for the rationale of the Innovation Park Task Force (of which Studio 30 was only one component) and its predecessor the Business Park Land Use Strategy effort, I think you have it backwards. If there were a near in opportunity site of a 100 or more acres, immediately adjacent to the university and the downtown, no one would be talking about any of these peripheral sites. The reason for this is quite clear: a number of the CRITICAL “Characteristics of a Successful Innovation Center” are absent from the peripheral sites.   The research on this is quite clear. And for those that pooh pooh the work of the Studio 30, their report is based on the Association of University Research Parks 2007 report, “A Study of Characteristics and Trends of Research Parks in North America”.

    For the peripheral sites to have the necessary ingredients to be successful, standalone Innovation Centers, you would have to relocate the UC Davis campus, the downtown and the transportation hubs and plunk them down adjacent to these peripheral sites. Or recreate all three of these critical characteristics on the periphery.  Since none of this is going to happen, see numerous Alan Miller posts, these peripheral sites are not capable of meeting the needs of the innovator/start-up/entrepreneur community.

    The conundrum is the Gateway/Nishi/Downtown area has all the critical ingredients, but not the size, while the peripheral sites have the size, but not the critical ingredients (plus a whole host of negative impacts).  The Innovation Park Task Force, Studio 30, city staff and the CC have all recognized this conundrum, hence the Dispersed Strategy. Ironically, some purported innovation champions on the VG have not.  Indeed, a number of them torture the definition of an innovation park, the idea of geographic proximity, comparisons to other innovation/startup communities, the reasoning supporting an innovation center, etc. to support their arguments.

    Interestingly, the peripheral site developers apparently recognize their site challenges.  If there is so much demand from mid-sized companies, or smaller companies rapidly growing into mid-size companies, why then do the peripheral site applications provide space for general office users, non-neighborhood retail, hospitality, conference, smaller companies, etc. (i.e. non-tech-related, general uses)?  Indeed, if providing space for mid-sized companies is so critical to the financial future of our community, why would these purported innovation champions support clogging up this valuable space, ideal for mid-sized companies, with these other uses?  How can they have it both ways?  They undermine their own arguments by trying to do so. Do you see champions of a “Dispersed Strategy” arguing that we should be making space for mid-sized companies in the Gateway/Nishi/Downtown area?  No.

    -Michael Bisch

    1. Anon

      So is your argument that any businesses located in the peripheral parks must be “mid-sized”, and no other types of smaller businesses that might compete with the downtown can be permitted there?  Just trying to figure out what your point is here.

      I tend to agree that the city should look at the innovation parks holistically, figuring out how to integrate them into the fabric of the entire community through connectivity, particularly via transportation, but in other ways too, such as providing parks that everyone can enjoy, smaller businesses that might fill a niche not yet in Davis, etc.

    2. Alan Miller

      ” . . . . . you would have to relocate the UC Davis campus, the downtown and the transportation hubs and plunk them down adjacent to these peripheral sites . . . . .   Since none of this is going to happen, see numerous Alan Miller posts,”

      Yes, as I have have stated numerous times, it is impossible to relocate the UC Davis campus, downtown, and the train station to either or both of the peripheral business park sites.  I don’t understand why people don’t get this . . . it’s very expensive to move downtowns and campuses and train stations.  So stop talking about plunking things, everyone!  You can’t plunk!  We can’t afford to plunk!

      And I will continue my campaign against plunking until all pro-plunkers have been eliminated from Davis.

  3. Doby Fleeman

     
    In a word, I think “stability” is a key factor in the current focus and priority on large scale innovation centers.  For any developer looking at a project with extended horizons for build out, it is critical to line up prospective companies/tenants with stable performance histories and solid financial backing which can serve as the initial foundation of the project.
     
    For all the publicity it has garnered, the Studio 30 Report really does not address the pivotal role of major, private sector employers in the founding, evolution and subsequent success of the innovation centers identified in the report.  As the result, the report fails to address the impact of these employers on the local economy and, more broadly speaking, their role in establishing the critical mass of facilities, research labs, equipment investments, vendor resources, scientific and professional operating expertise – all necessary ingredients if one is trying to foster an environment conducive to new start-ups and innovative spin offs.   These companies and their operation are the proverbial petri dish for innovation.
     
    That the city council chose to so clearly articulate its support for “growing mid-sized companies” and “incubator, startups and expanding businesses” is understandable and authentic – but again, that messaging fails to recognize and convey the importance of the role that larger, more mature companies have and do played in supporting and sustaining the environment necessary for these smaller companies to succeed.
     
    There should be no conflict between a strategy of dispersed development and establishing priorities for introduction of appropriately designed sites to accommodate these larger, “at scale” employers – should they choose to locate in Davis.  Identify the locations for these other dispersed sites and bring on the developers.  I can’t imagine either the planning department or the city council objecting to additional expressions of interest.  I think the word is out the Davis is “open for business”.

    From the standpoint of timing and execution, however, it is critical that Davis demonstrate its genuine interest on the issue of economic development.  Put another way, if we are not prepared and organized to efficiently accommodate potential and prospective new employers into our community, we run the very real risk of being eclipsed in this process, as our more nimble and focused neighbors in West Sacramento, Yolo, Solano and Sacramento Counties vie for their place alongside the university.
     
    The much larger, and more important issue for Davis is how the community goes about digesting all this information.   Does the community have the appetite and the will to tackle the challenges and opportunities contained within this discussion?  Recently submitted plans from the several Innovation Centers and Innovation Hub certainly go a long way towards our understanding of how those built realities might look.  Next comes the most critical part of visualizing, assessing and understanding how these centers will impact the larger community over the time frame envisioned.  
     
    For lack of a better term, I refer to it as “Visioning”.  How is that process to be managed?  When might we expect it to commence?   How will the community be deliberately brought into the process?   Who will be charged with directing the process and framing the conversation?
     
    You want to talk about something, let’s talk about how and when we are going to begin this larger discussion about the future of our community, what it means to be a partner to the University in support of their objectives, and how all this dovetails into preserving and enhancing the Davis we know today in terms that lead to increased prosperity and success for tomorrow.  Out of respect for the process, investment and the earnest intentions of the developers who have taken up our offer, we owe it to them and to the community to be organized and prepared to receive, discuss, and debate their merits.  It is up to our community to set the table, establish the framework and expectations, and to be fully prepared to thoughtfully assess the proposals of these invited guests.

  4. Gunrocik

    Doby and Anon’s comments are spot on.  I can understand why Mr. Bisch wants to protect his downtown flank — and I don’t see anything in the current discourse that works against Downtown and Nishi.

    However, if we are to fulfill our mission to support UCD and its spinoff companies, keep growing concerns within our boundaries (such as Schilling and Marrone) and generate meaningful revenue for our city coffers — we have to make the edge projects a top priority.

    Infill takes time — a lot of time — and even though the in town sites are the most compatible with our sustainable philosophy — they unfortunately face the most opposition from the No on Everything crowd.

    If we do a good job planning our edge projects, they can take on a lot of same characteristics as infill projects.  We can require a higher level of density than typically seen in suburban development, we can insist on good bike/ped/transit connections both internal and external to the sites.  We can require sustainability/energy requirements well in excess of typical standards, we can make sure the site is aesthetically pleasing and includes plenty of open space.  We can make sure it is sensitive to its adjoining neighborhoods and we can restrict land uses to those that need to be part of a large scale project.

    And we can insist on all of this because it will have no chance of public acceptance otherwise.  In addition, we can insist on these requirements because the developers purchased the land at rock bottom ag prices–which gives them lots of room financially to pay for additional features and make supplemental payments to the City coffers.

    Infill sites such as Nishi have huge costs associated with land clearance, railroad crossings and the premium one must pay when building at the highest densities.  Downtown sites are very land constricted, which makes both construction and parking acquisition infeasible in many cases and they always face neighborhood opposition that can add years to the entitlement process. (Pena House and Mission Residences being the latest examples).

    We can let perfect be the enemy of good and wait another decade for our infill sites, or we can move forward at Mace or Covell and protect our economic base.

    1. Anon

      “We can let perfect be the enemy of good and wait another decade for our infill sites, or we can move forward at Mace or Covell and protect our economic base.”

      AMEN!

  5. Frankly

    For the peripheral sites to have the necessary ingredients to be successful, standalone Innovation Centers, you would have to relocate the UC Davis campus, the downtown and the transportation hubs and plunk them down adjacent to these peripheral sites. Or recreate all three of these critical characteristics on the periphery.  Since none of this is going to happen, see numerous Alan Miller posts, these peripheral sites are not capable of meeting the needs of the innovator/start-up/entrepreneur community.

    I think this is indicative of a too narrow view of what Innovation Center can mean/be.

    And related to this point, I think we are guilty of over-involving ourselves in concern, and in the process, erroneously discounting the main ingredient to a successful innovation environment.  That main ingredient is the actual creative-class employees and owners of these businesses that would located here.  It really is a “build it and they will come” reality. The human element is both the main value of and the main contributor to the final design.

    We can lament all the design attributes and project approaches for development of the facilities needed, but in the end it is the people that create the innovation culture and move the needle toward what would be considered an Innovation Center.

    In the discipline of software application development we long ago learned the fallacy and futility of attempting to achieve perfection in design as a prerequisite to development.  The collective human capability to visualize a future state of any complete complex system is so limited as to label any attempt as hazardous.

    The best-practice development methodology is incremental with a constant improvement loop.  It is one that leverages dynamism and the creative and problem solving talents of the human element within the system.

    Said another way it is an inside-looking-out instead of outside-guessing-in paradigm and process.

    We all have some stake in this future for growing our local economy.  I suggest instead of a short-sighted pursuit of some absolute outcome that maximizes our returns and calms our anxieties, we instead grasp the reality of opportunity. None of us can really say what opportunities will present themselves as we grow our innovation economy.   But we can absolutely expect that there will be none if we let our personal demand for perfection and absolute outcomes be the enemy of progress.

    1. Anon

      “None of us can really say what opportunities will present themselves as we grow our innovation economy.   But we can absolutely expect that there will be none if we let our personal demand for perfection and absolute outcomes be the enemy of progress.”

      Very well said!

  6. Miwok

    Tia starts with a good point. She mentions the mantra of “catch up economics” = Oh! look over there, let’s do that! “keeping what you have already” is a mantra many small minded communities have, and instead of selling steak, they sell the sizzle while eating hot dogs. And empty lots all over stay vacant.

    Roseville did that to get HP, NEC, and other tech companies into a “business park” and they built buildings and moved people there without any infrastructure, while the City kept stalling, and the companies pulled out. THEN the roads and such were built and sat empty for ten years or so while the companies finally started again.

    Davis has let pressure build on business and housing until the demand overflowed, to the benefit of other nearby communities. Then, as the Mace Ranch development years ago let the floodgates loose, now has no plans past that? Did everyone take a break? I am told it takes five to ten years to get something “shovel ready”. Of course, Wild Horse gave us all housing (yeah affordable), and it was funny to see the residents of that picketing against future growth in that area.

    Frankly mentions an “incremental” development. Kudos! But my observation is Davis wants headlines more than growth. Quit hiring “consultants” and their decisions might not be so hard. As the City grows, laying off the workforce is not doing it. Are they playing catch-up or planning ahead with these Innovation Parks? I apologize, it always seems like catch-up by design to me. It is very difficult to understand, and I compliment the Vanguard for talking about it.

  7. Alan Miller

    “We are not ignoring Nishi, which is moving forward as well.”

    Who is the “we” in this sentence?

    I have not understood the argument about the dispersed business parks policy being ignored, because I never thought the City was ignoring Nishi or any other business park.  Other than people on a comment page in a blog talking about a peripheral park after a meeting near one park, what has changed in policy or focus?

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