Letter: Former Mayor Opposes Cannery CFD

Cannery-undercrossingBy Ken Wagstaff

Dear Davis City Council,

I am concerned about your plan for a Community Facilities financing District (CFD) for the Cannery development now being built by the New Home Company. I understand it will be on your agenda on Tuesday.

Each year, Cannery homeowners will pay a significant extra amount, appearing on their tax bill.

This levy is to cover the cost of the infrastructure New Home is building to serve the project, including street and bike connections to the city. Depending on home size, the levy could be an additional $1,000 – $3,000.

Normally new homeowners pay their share of infrastructure costs in the price of their house, financed in their monthly mortgage payment. It’s not added to their tax bill.

Mace Ranch homeowners already pay such a special CFD levy. I believe the Cannery bill will be higher.

As I understand it, Dan, Lucas and Rochelle voted for the Cannery CFD to assure timely infrastructure funding. Brett and Robb voted no, not convinced the City needs to be the fiscal intermediary to accomplish this.

I agree with Brett and Robb. New Home’s own financing and business plan, especially in a strong housing market, should be able to fund the infrastructure schedule in the development agreement that Lucas (and Joe Krovoza) negotiated.

Special financing districts run counter to the idea of community-wide support for City needs and amenities. This includes the schools.

I’ve met residents in Mace Ranch who feel their tax bills are unfair. They are reluctant to renew tax levies. In Mace precincts a recent school tax election failed the necessary 2/3 vote to pass. It took a higher vote in the rest of the school district for the tax to carry.

Cannery residents, with tax bills higher than Mace Ranch, may resist renewal of school taxes. In a close election, Cannery votes could defeat school measures.

I am a grandfather of three children enrolled in Davis schools. As a former Davis Mayor I’m also concerned about building community consensus to support our quality of life.

I encourage citizens and the School Board to appeal to the City Council to stop the Cannery CFD.

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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  1. zaqzaq

    Nice letter by Ken. Did Lucas negotiate the development agreement?  He must have done a poor job if he now is advocating for the RFD so that the residents will have timely and nicer amenities.  Had he done a better job the amenities would have been both timely and nice.  The timeline for putting in the infrastructure and amenities along with the quality could have been spelled out in great detail in the agreement.  It looks like the CFD was some sort of back room deal that Lucas made.  I wonder what Joe’s position is on the CFD proposal since it appears as though he also participated in the negotiations.  I think this is just a money grab by the developer designed to increase their profits at the expense of the citizens of Davis.

      1. hpierce

        “Best deal”… does that mean you want more “goodies” for the community to be financially be added on the backs of those who will buy in the Cannery project? I certainly don’t think, given the circumstances, that the development team is going to put more of their own “skin in the game”.

        1. Michelle Millet

          Its not just that the city is getting nothing for it. There are negative consequences for the city, like taking on the finical obligations of assessing and collecting fees, as well as being finically on the hook to repay the bonds.

          The school district,  which will soon have parcel taxes up for renewal, may also take a hit.

          All for what? The only benefit I’ve heard so far is that things will be built sooner. (regarding this, someone mentioned that time lines for infrastructure completion are laid out in the developer agreement, so this might be a mute point anyway).

        2. hpierce

          DP (and David)… noted… my bad… my mea culpa is that I was distracted, and “sped-read”, saw the initial letter “D”, and erroneously acted/posted on that.

          It should be noted however, that your “two cents” added nada. You did not include who you thought should provide “something” for the existing “city”. Not surprising.

        3. hpierce

          Michelle… to clarify:  the City will have no new ‘costs’ (unless they “blow it”) for the admin, etc. of the CFD.  Those costs will/should be come out of the CFD proceeds.  That’s how it worked for MR.  Just adds to the Cannery residents’ cost, though.  The main problem in the City perspective is RISK.  Admittedly minor, but real.  Once the bonds are issued, they must be repaid, unless the City does the “default” thing.  Nuclear option, there may be no survivors, or those that survive will be badly burned.  This would only happen with a combination of insufficient revenues generated by the property owners and/or the developer “walks”.  Not high probability, but a definite risk.

          1. Matt Williams

            hpierce, Davis as a City government will not have any new ‘costs’ for the admin of the CFD, but Davis as a community will have new costs for the admin of the CFD, because those costs will be paid for by the new members of the community … the residents of the Cannery. The same is true of the bond placement costs.

        4. hpierce

          Michelle, I have (and thought I articulated — maybe not) the same question… why should the City implement a CFD?  My answer is NO.  I’ve given my reasons/rationale several time before.  Unless it is to refute erroneous/false “facts”, I’m pretty much done with this topic.  It’s pretty clear that neither Lucas, Rochelle, or Dan are having any second thoughts.  It’s very much likely is going to happen.  But my conscience is clean.  Let any negative results be on the heads of those three, and those who support the CFD.  I’ll not lose sleep.

  2. Anon

    Cannery residents, with tax bills higher than Mace Ranch, may resist renewal of school taxes.

    According to Yolo elections website, over the last 16 years there have been 8 DJUSD tax measure/bond elections.  All passed with more than 2/3 required votes.  All precincts in Mace Ranch voted yes (more that 2/3 support) for these elections except 1 instance.

    1. 1999 Measure S – approved by 81.5% – Mace Ranch approved

    2. 2000 Measure K – approved by 85.5% – Mace Ranch approved

    3. 2003 Measure N – approved by 78.9% – Mace Ranch approved

    4. 2007 Measure Q – approved by 73.2% – Mace Ranch approved

    5. 2008 Measure W – approved by 75.7% – Mace Ranch approved

    6. 2011 Measure A – approved by 67.2% – Mace Ranch approved

    7. 2012 Measure C – approved by 72.3% – Mace Ranch approved

    8. 2012 Measure E – approved by 69% – Mace Ranch split 1 yes, 1 no (South, West and East Davis opposed)

    But let’s not let the facts get in the way of a unfounded speculations…


    1. Michelle Millet

      Our school districts are so reliant on Parcel Taxes to pay for basic student services. Volunteers in this community work so hard to get these passed by the required 2/3 majority, that is 66%. That fact that voters in Mace Ranch came close to not approving these taxes, and that the overall trend is that they are passing by smaller margins is frightening to me.

      Why put these parcel taxes at any risk by asking tax payers to cover the cost of infrastructure that the developer is required to provide?

        1. hpierce

          Well, if you’ve looked at the records, to the point where you can claim that Anon’s figures are not consistent, why not share instead of asking someone else to “verify”?  A “lawyers” tactic?

  3. Aggie

    Anon:  Thanks for posting the Mace Ranch voting data and debunking the canard that the Cannery CFD might put future tax measures at risk. This phony debate about the CFD is Davis political gamesmanship at its worst. In addition, it is sending terrible signals to the banking and investment communities that might consider financing the proposed innovation centers and other major projects to move Davis forward. Funny thing about Google in 2015.  It takes less than an hour of online due diligence to discover how deeply dysfunction this community is.

    1. Anon

      “…it is sending terrible signals to the banking and investment communities that might consider financing the proposed innovation centers and other major projects to move Davis forward...”

      Spot on!

  4. Michelle Millet

    In addition, it is sending terrible signals to the banking and investment communities that might consider financing the proposed innovation centers and other major projects to move Davis forward.

    I hope our city council and community will reject any innovation center proposal that wants to finance their developments on the backs of Davis taxpayers.



    1. Doby Fleeman

      I don’t claim to have any background on the issue of CFDs, but from the conversation on the Vanguard, there does seem to be a strongly held view that CFD’s may be inappropriate or unnecessary for new, large scale residential development in Davis – due in particular to the controlled inventory and inelastic market demand.

      The Innovation Centers would seem to be an entirely different animal (unless a decision were made to include housing), reflecting a much longer term horizon for buildout, when compared with Davis residential housing.

      Again, I don’t know the history or use of CFD’s in commercial development, but to categorically close the door to that discussion for well-designed, much needed space for new employers would seem to be an apples and oranges comparison.  Irrespective of their final position on the Cannery, I would encourage the City Council to keep an open mind when the conversation turns to the Innovation Center proposals.



      1. hpierce

        Doby, you make an important distinction.  Thank you.

        CFD’s for non-residential developments are perfectly fine, except perhaps for the risk factor to the agency who issues the bonds.  But here’s the big difference.  Businesses (unless they’re destined for failure), DO THE MATH, before deciding to proceed with a property CFD assessment or not.  Likewise, the developers of non-res property KNOW their potential buyers WILL DO THE MATH, and think long and hard before proceeding with a CFD.

        If the Cannery was not primarily SFR, and was instead Comm/Ind, I wouldn’t have batted an eye, because I’d feel pretty comfortable that the developer and potential buyers have sharp pencils, calculators, computer spreadsheets, and know how to use them.

        Side note: in CFD’s, non-res buyers generally pay-off the remaining CFD obligation on the property @ time of acquisition.

  5. TrueBlueDevil

    I’m late this to issue, but doesn’t this effectively put millions of dollars, up front, in the pockets of the developers, for items they should fund from the sale of these homes?

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