Monday Morning Thoughts: What Should the Goal of Nishi Be?

Interior View of Nishi
Interior View of Nishi
Nishi artist rendering, Interior View

Last week, the Davis City Council pushed back on Nishi, arguing the need for access and, as tricky as that issue may be for the project that is aiming for a June election date, the fiscal analysis may prove just as thorny.

While the project has always been viewed as a mixed-use project with high-density housing combining a small retail space and a modest-sized R&D (research and development) component, part of the goal as laid out by council was “revenue generation to support city services throughout the community.”

However, the economic analysis in September came back unfavorable toward that goal, with the EPS (Economic Planning Systems, Inc.) report showing the project would be a net negative of $78,000 at build out.

This led the developers to come out with a statement pushing an onsite hotel as a means to push the project into the positive. They wrote, “According to the City’s consultant, the Nishi project alternative that includes a hotel will generate a general fund surplus of $416,000 per year, money that can be redirected to vital city services. According to city projections, the Nishi project proposal with an onsite hotel is estimated to create between 1,500 to 1,800 jobs, $315 million to $385 million in economic output, and $89 million to $107 million in labor income (wages).”

That may sound good, but there are some problems with that proposal.

EPS analyzed an alternative where “a portion of the proposed R&D space is replaced by a 70,000-square-foot hotel.” This alternative has them worried that it “could undermine the critical mass of tech-driven development that is at the heart of the Innovation Center concept.”

They add, “The resulting reduced allocation of R&D at the Nishi location, combined with proximity to an additional hotel proposed at the entrance to Nishi on Olive Drive and the recently developed (and expanded) Hyatt Place Hotel on the UC Davis campus, may undermine the viability of this alternative.”

In addition to the recently approved hotel conference center, there is a proposed hotel along I-80 and potentially one at Mace Ranch Innovation Center, as well.

In short, while a hotel on paper may be a quick fix to the revenue generation problem, in reality, it may just siphon off existing revenue generated by the Embassy Suites that will be built on Richards Blvd. At the same time, it takes away from the already modest provision of R&D space in Nishi.

This leads us back to our concern from September where the Vanguard argued that Nishi was trying to do far too much on a space that is just under 47 acres.

The developers further diffuse its impact by turning the project into mixed use. While there are some strengths to that, if we hash this out further we see that it provides for just 650 residential units, where 440 are rental and 210 are for-sale units. It also has up to 325,000 square feet for R&D uses, and 20,000 square feet for retail uses – coffee shop, café, restaurant.

The city has a desperate need for residential units, particularly student rental units, but 650 is not going to dramatically improve the housing stock – particularly when its impact is further diffused by splitting the units into 440 for rental and 210 for sale.

Along the same lines, the city is greatly in need of R&D space, but 325,000 square feet, while nice, is no game changer either.

The result of this mix is not particularly helpful to the needs of the city, as encompassed in the fiscal analysis. Again, EPS projects a net loss of $78,000. While that is something that the city can fix in terms of getting it to revenue neutral, the point EPS makes is that “the estimated annual net fiscal deficit for the Nishi project is attributable to two key factors: 1) the inclusion of 650 residential units; and 2) an assumption of approximately 80,000 square feet of public/nonprofit space (20% of total nonresidential space).”

So what is the fix? The developers are suggesting the hotel as their fix. But another possibility is the all-R&D option if we are looking for more business park space.

The draft EIR estimates that replacing residential uses would “would result in approximately 1,200,000 sf of R&D uses on the Nishi site, instead of 650 residential units, 350,000 sf of R&D uses, and some accessory retail under the project.”

The DEIR notes, “Because this alternative would not include residential uses, it would not meet any of the project objectives associated with housing and the provision of a mixed-use community. The objective related to the provision of high-skilled technology jobs, however, would be achieved to a greater extent than that of the project.”

The EPS report worries, “While the R&D component would be substantially larger with the additional jobs, the loss of housing could reduce the overall vitality of the project.”

EPS makes the opposite argument that we do, arguing, “As a small, close-in site, the strength of the Nishi project is its ability to provide a fine-grained, mixed-use environment that is attractive to university partners. While some increase in R&D may be productive, potential reductions of supporting uses may erode its competitive stance.”

But, from our perspective and as the project stands now, the project does not offer Davis a great increase in either R&D space or housing, and perhaps it would be better off focusing on one or the other.

—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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45 Comments

  1. Tia Will

    650 is not going to dramatically improve the housing stock – particularly when its impact is further diffused by splitting the units into 440 for rental and 210 for sale.”

    Along the same lines, the city is greatly in need of R&D space, but 325,000 square feet, while nice, is no game changer either.”

    My thought about the dispersed strategy for R&D space is that no one project was intended to be a “game changer”. Rather it was my understanding that the spaces were intended to be complementary with Nishi being more of a small start up incubator space while other projects would be providing the capability for expansion. I think that the point about complementary goals, rather than each space filling an existing need seems to be getting lost in this conversation.

    I never saw Nishi as a huge money generator for the city. Nor did I see it as a housing panacea. It was my understanding that it was to address, in part,  a number of different needs which would be what a “mixed use” project should fulfill.

    1. David Greenwald

      The dispersed innovation strategy is multifold and part of it suggests we make use of existing land and space. However, ultimately the Studio 30 report which develops the strategy writes, “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.” I disagree with your conclusion about complementary goals. I think we have put too many different types of needs into Nishi and by doing so we end up with the worst of all worlds.

      1. Matt Williams

        David Greenwald said … “I think we have put too many different types of needs into Nishi and by doing so we end up with the worst of all worlds.”

        I see two types of needs … housing and applied research incubation. What other needs do you see?

        Although I’m not convinced the Extended Stay Hotel is a good idea, the reality is that it is simply housing for the people coming to work at or interact with the applied research incubation businesses and/or UCD.

    2. Miwok

      Because this is not the solution to the ENTIRE CITY’s problems, it is a bad idea? Would not even small Innovation Projects be welcome? Would not a few rentals be a welcome addition to the City? Whatever is proposed will be corrupted by the entrepreneurs in town anyway. The Market will do the rest. Has anyone made room in their plans for a restaurant or nightclub?

    3. Matt Williams

      Tia Will said … “My thought about the dispersed strategy for R&D space is that no one project was intended to be a “game changer”. Rather it was my understanding that the spaces were intended to be complementary with Nishi being more of a small start up incubator space while other projects would be providing the capability for expansion. I think that the point about complementary goals, rather than each space filling an existing need seems to be getting lost in this conversation.

      Very well said Tia.

      1. Miwok

        Yes it is, and dispersed sites and various sizes let the small and large ideas ovulate. Some ideas require small spaces, other require laboratories or machine shops. SPACE but not offices. Tia has it rightly assessed.

  2. Barack Palin

    In short while a hotel on paper may be a quick fix to the revenue generation problem, in reality, it may just siphon off existing revenue generated by the Embassy Suites that will be built on Richards Blvd. While at the same time it takes away from already modest provision of R&D space.

    Great point.  Unless all of our hotels are continually filled to overflowing simply building more hotels doesn’t necessarily mean more revenue for the city.

    I can’t believe in these times of our city having fiscal problems and continually talking about more and more taxation we would even consider any project that might be more of a drain on city finances.

    1. Matt Williams

      Barack Palin, you don’t need to go any farther than the Accounts Payable department of UCD to find the evidence about the demand for hotel and convention space in Davis. The amount that UCD spends each year for its professors and researchers and staff to go to out-of-town academic conferences and the Annual Meetings of professional associations is beyond huge. Davis has never been able to host any of those academic conferences and/or Annual Meetings of professional associations because of a lack of room space to house the conference/meeting attendees and meeting space to conduct their gatherings. The egos of the professionals in UCD’s world-leading disciplines will kick into gear when the opportunity to be the “host” of their peers becomes a reality. Kind of like the annual bidding amongst NFL Owners for the opportunity to host the Super Bowl.

  3. Robb Davis

    Something that has been missing in your commentary on this project David is a key assumption in the model:

    The estimated annual net fiscal deficit for the Nishi project is attributable to two key factors: 1) the inclusion of 650 residential units; and 2) an assumption of approximately 80,000 square feet of public/nonprofit space (20% of total nonresidential space)… (Public/nonprofit space is estimated to be a net fiscal burden on a city’s General Fund because of low General Fund revenue generation (i.e., public/nonprofit uses are assumed to be exempt from paying property tax revenue and real property transfer tax revenue, and are not estimated to generate any onsite taxable sales tax revenue).   (EPS Report page 14)

    The motion I put forth last week, which was superseded by Brett’s motion, included the following:

    The Development Agreement, which must include the following topics: … mechanism for offsetting any foregone property tax revenue to the City as a result of purchase or lease of the non-residential properties by the University of California.

    While this motion did not pass, I still believe this is an issue to explore as we move forward. This is not a novel concept. I will also note that staff is looking to hire a consultant to assess the potential for further hotel development in the City.  This should give us a better sense of the potential for and issues related to new hotel development.

  4. Anon

    But, from our perspective and as the project stands now, the project does not offer Davis a great increase in either R&D space or housing, and perhaps it would be better off focusing on one or the other.

    To be of real benefit to the city, it is the R&D space that needs to increase, so that Nishi generates more tax revenue, IMO.  Doesn’t necessarily mean there can be no housing, but the lion’s share should be R&D, so that Nishi becomes a vital part of the innovation park strategy.  As of now, the project has morphed (yes I said “morphed”) into an almost all student housing project, that doesn’t pencil out financially.  I don’t see the hotel as a “fix” because all that would do is compete with existing/proposed hotels at a location where a hotel is not needed because of the close proximity of existing hotels.  I also agree with Mayor Pro-Tem Robb Davis’s concern about the loss of tax revenue if UCD purchases/leases some of the space in Nishi. Again, I believe these are reasons Nishi is not ready for prime time/to get past a Measure R vote.

  5. Davis Progressive

    robb – it seems to me that the vanguard has identified a key flaw in the nishi project over and above the access issue. the developer wants to fix this with a hotel that appears not only redundant but an adhoc fix. you are looking at an assessment. but neither of you want to fix the underlying problem that i can see – this shouldn’t be miixed use – it should be either an innovation park or residential, not both.

  6. aaahirsch8

    Dave wrote:

         The city has a desperate need for residential units, particularly student rental units, 

    I get about need for more student units to accomodate growth at UC, but I don’t understand “desperation” Dave mentions  in connection with family housing.

    Yes, Davis is a desirable place to live and families are willing to pay a premium for this vs Woodland and most neighborhoods in Sacramento County. But what do the current residents gain by accommodating this growth?

    The Cannery as a housing  focused development offered little spin off benefits to the rest of the  community while adding to traffic congestion…and saddled the community at large with unfunded  Infrastructure needs such as 2nd bike crossing of Covell Blvd.   Council then showed bad faith by approving the CSD Mello-Roos “gift” to developer that taxed those residents 30 years.  The Developer contributed NOTHING to fund our schools that are struggling financially.   Developers are now making EXTRAORDINARY profits in this up real estate market while city struggles to pay its bills.

    I am not opposed to growth and more housing, but how is this a model that supports having more housing as a solution to any of the community’s problems?  Why will this time be different?

  7. Barack Palin

    The community might buy into an all innovation park but I don’t think they’re going to go for an all housing development especially if it’s fiscally negative.

  8. aaahirsch8

    I Just Don’t Get It.

    We have been told Davis needs a bigger/better industrial/commercial tax base, thus the need for Growth, for Innovation Centers.

    And while the Nishi is a lovely design internally, with nice environmental features, its current contribution to the community is outlined at:

    > More traffic on Richards

    > Less pressure on student housing in neighborhoods

    > NO contribution to city’s financial situation beyond maintaining the current starvation level city budget.

    It is clear their is a demand for housing in Davis….new homes are worth 50% more (over 100 sq ft) more in Davis than in Woodland… Once you understand these homes cost no more to built in Davis, you realize this extra is a windfall profit for the land speculator.

    And we are sold company want to be located close to the University and our vibrant community.

    This extra value that come from being located in Davis was generated was by Davis residents who live here and made this place worth a premium.  And recall the land speculators have been protected by Prop 13 so its property taxes have not appreciated to reflect the appreciated value of their land.

    Why shouldn’t the City and its residents recapture a large part of this $100/sq ft unearned value as part of entitling Nishi (and Mace I Park) for development to address the city’s financial problems?

    YET..here it is only 12 weeks left before the Nishi ballot measure decision is to be made at council, and there will be any financial benefit to the City is unclear, at best.

    This is, in a word, disheartening.

    1. Miwok

      When most places are interested in just taxing people Davis has to tax people depending on where they buy their house? then charge more for the “privilege” of living in Davis?

      I looked up the fee for hotels to find out how much that generates for the City, and it is exorbitant compared to others, even small towns, which has never charged me more than 10% of the room cost. Davis charges so much, I could get another room in another town for what the room taxes are, $56 or more? If I pay $200 for a room, I want that much of a room. Some of them look like a dorm room.

      The reason the City cannot recoup the larger costs for anything is a mystery, and maybe their predilection for headlines runs counter to their ability to run the town responsibly? The recent sales tax expiration, which was explained as a counter to the parcel tax unavailable because lots are University Owned, replaced it with what? Proposed what? They have no plan, so they go back to deficit financing just as they saw some income. The CSD for the Cannery? – same thing.

  9. CalAg

    High density residential on Nishi only makes sense within the context of providing integrated workforce housing to support the tech component.

    In contrast, the proposal on the table is a high density student housing complex with a small tech component wedged in on the residual land between the student housing and the freeway. While the current proposal is technically mixed use, the potential synergies between the different land use elements are minimized due to the site plan and the student focus of the housing.

    We can debate all day about the original intent of our overall economic development strategy, but as currently drafted the Nishi component is a huge wasted opportunity that does real damage to the City’s goals to create an “innovation ecosystem” and a more robust tech sector economy that helps pay the bills.

    Marketing it to the general public as an “innovation district” is disingenuous at best, and disrespects the intelligence of the Davis voters.

    1. Matt Williams

      CalAg said … “Marketing it to the general public as an “innovation district” is disingenuous at best, and disrespects the intelligence of the Davis voters.”

      CalAg, to date there hasn’t been any “marketing” of the Nishi Gateway. There has been conceptual consideration in 2012 as part of the City’s Dispersed Innovation Strategy (see http://cityofdavis.org/home/showdocument?id=2123). There has been conceptual ratification by the Council in November 2012 of the Nishi Gateway Planning Goals (see http://documents.cityofdavis.org/Media/Default/Documents/PDF/CityCouncil/CouncilMeetings/Agendas/20131001/05-Mixed-Use-Innovation-District.pdf). There has been the issuance of the RFEI to Nishi and numerous other sites. There has been the creation of a Draft Environmental Impact Report for Nishi, which has been reviewed in open, transparent public hearings by virtually every City Commission. Where is there any “marketing” in that process to date? You are seeing demons where no demons exist. If the Council votes to place a Measure R/J vote on the ballot at any time in the future, you will no doubt see the very first actual “marketing” of the project.

      1. CalAg

        This is just your own political spin.  Call it what you like if you want to quibble over semantics.

        The City and the applicant routinely refer to the current Nishi proposal as an “innovation district.” This is disingenuous at best, and disrespects the intelligence of the Davis voters.

        1. Matt Williams

          How can a recitation of the multiple components of the public record be political spin?  The words are there for any and all to read and draw their own conclusions.  As I said in my public comment at the last City Council meeting, the voters of Davis are very intelligent and more than capable of reading through both the public record and the pro and con materials that will be distributed as part of the lead up to a Measure J vote.  My vote will be “no” if there is automobile access from Nishi through West Olive to Richards.  Like Brett Lee, I am awaiting “details” on other Nishi issues.

          On a related subject, I walked for 4 miles this morning with a Davis senior who still lives in her single family residence in Old North Davis, where she has lived for over 30 years.  For over 25 of those 30 years, her neighbors were other families like her own.  Now both of the houses next to hers are rented by six UCD students each.  No more families in those two houses.  No more children going to DJUSD schools from those two houses.  No more family purchasing of retail goods at Davis retail establishments from those two houses.  The housing demand from the steadily increasing number of UCD students is changing Davis in very fundamental, and for the Davis retail business community, economically non-sustainable ways.  How do you propose Davis should address that fundamental problem Anon?

        2. Barack Palin

          No more family purchasing of retail goods at Davis retail establishments from those two houses. 

          The 12 students never shop?

          IKTNFBTSS

          Matt, how are you voting on Nishi if it’s almost all housing and fiscally a negative drag on the city?

          1. Matt Williams

            Barack Palin said … “The 12 students never shop?”

            BP, I’ve lived here for 17 years and in the 100 or so visits to Hibbert Lumber (one of Davis’ very few retail businesses), I have never once seen a UCD student shopping at Hibberts. Although not as absolute, the pattern at Davis Ace Hardware, another of Davis’ retail businesses, is similar. My guess is that UCD students make up less than 5% of Davis Ace’s business. College students don’t buy “things,” the lifeblood of retail, in Davis, and when they do buy things, it is more often at a discount store like Target, WalMart, CostCo Home Depot, or IKEA. If you don’t believe me, just ask Frankly.

            The people who buy new living room furniture or bedroom suites, or table saws are much more like people like you and Frankly in the 25-54 year-old census cohort, than they are like the typical UCD student. The result is that retail Davis businesses selling things, like DeLuna Jewelers and Bogart Books and Nestware and The Naturalist, to name a few, have closed their doors as their customer base has shrunk by over 20% in the period from 2000 to 2010.

            The local Davis economy has become more and more dominated by service businesses, whose offerings of “non-things” isn’t tied to narrow demographics. Look at the list of business types on the Chamber of Commerce website. It is hard to find any retail businesses there … almost 100% services … a huge proportion of which are restaurants and bars.

            Advertising, Public Relations, & Design
            Marketing, Public Relations, & Design
            Newspaper, Radio, & TV
            Party Rentals & Live Sound
            Printing & Promotional
            Apartment Communities
            Arts, Culture, & Entertainment
            Casinos
            Family-Friendly Activities
            Galleries & Museums
            Theater & Music Venues
            Automotive
            Dealerships
            Maintenance & Repair
            Banks & Credit Unions
            Business & Professional Services
            Accounting, Payroll, & Tax Services
            Attorneys & Legal Services
            Business & Productivity Consultants
            Employment, Staffing, & Human Resources
            Energy, Environmental, & Regulatory
            Engineering
            Farming & Agriculture
            Mailing & Shipping Services
            Merchant Services
            Office Supplies
            Security & Alarm
            Storage
            Utilities
            Community Organizations & Nonprofits
            Computers, Technology, & IT
            IT Consulting & Computers
            Mobile Applications & Software
            Construction & Property Maintenance
            Air & Heating
            Carpet & Flooring – Sales & Care
            Construction & Remodeling
            Fire & Water Cleanup & Restoration
            Landscaping & Pools
            Painters
            Pest Control
            Window Cleaning
            Education
            Continuing Education
            Higher Education
            Other
            Preschools
            Primary Education
            Finance & Insurance
            Financial Advisors
            Insurance
            Food, Beer, & Wine
            Food & Beverage Distributors
            Grocery & Markets
            Quick Food & Snacks
            Restaurants & Caterers
            Funeral Homes & Cemeteries
            Governmental & Public Agencies
            Healthcare
            Assisted Living & Senior Care
            Chiropractic, Acupuncture, & Massage
            Dentists, Orthodontists, & Oral Surgeons
            Hospitals & Specialty Care Clinics
            Optometrists, Opticians, & Eye Care
            Hotels & Lodging
            Individual
            Manufacturing/Industry
            Meeting/Event Facility
            Personal Care/Beauty/Spa
            Photography
            Real Estate & Mortgage
            Appraisal
            Commercial
            Developer
            Leasing, Rental, & Management
            Mortgage
            Realtors & Agents
            Residential
            Shopping & Specialty Retail
            Grocery
            Sports, Recreation, & Fitness
            Travel/Transportation
            Veterinarians/Pet Care

        3. CalAg

          “BOTTOM-LINE, the City and the applicant have been consistently and transparently and frequently clear that Nishi was being planned as a mixed-use university-related research park development complemented by high density urban housing. How could they have been any more clear?” @ Matt Williams 11/23/2015

          The proposal on the table is simply not a — mixed-use university-related research park development complemented by high density urban housing — (the City’s language, not yours).

          Let’s parse the language if that’s not clear enough …

          (1) Mixed use – sort of – maybe technically. The housing and R&D components are actually adjacent and there is no credible evidence that I am aware of that the two components will be jointly developed. As far as I can tell, the student housing complex (probably another Whitcombe/Tandom apartment development) will be front loaded and the R&D component will come later (if ever). This feels like two separate projects artificially connected so that the high density student housing can try and get the political benefit of the “innovation district” window dressing to help with the Measure R vote.

          (2) University-related. Where is the university these days? The original CC direction was to jointly plan with UCD. That seemed to be going fine early on (e.g. the 2/11/14 joint presentation to the CC). Now the Perkins + Will consultant appears to be gone, the land plan has changed, and I don’t see any evidence of joint planning with UCD’s East Village. And what about the Nishi connection to UCD? There should be no ambiguity on this issue at this stage in the process.

          (3) Research park development. Not even close. Too small – not enough critical mass. In my opinion this component will never get built if the current proposal is entitled.

          (4) Complemented by. Student housing does not complement research park. In fact, the student housing will make the small R&D component less viable.

          (5) High density urban housing. Urban housing in the context of a mixed use research park means workforce.

          Taken together, along with the “innovation district” label that the City and developer have put on the project, my conclusion is that the whole process is disingenuous and insulting to the voters.

          1. Matt Williams

            CalAg said … “(1) Mixed use – sort of – maybe technically. The housing and R&D components are actually adjacent and there is no credible evidence that I am aware of that the two components will be jointly developed. As far as I can tell, the student housing complex (probably another Whitcombe/Tandom apartment development) will be front loaded and the R&D component will come later (if ever). This feels like two separate projects artificially connected so that the high density student housing can try and get the political benefit of the “innovation district” window dressing to help with the Measure R vote.”

            This is a very good post CalAg. You have very clearly outlined your feelings and beliefs and labeled them as such. Those feelings and beliefs appear to be based on the evidence you have gathered to date, and you also appear to believe that that very little, if any, additional evidence is going to be forthcoming. That is your prerogative. I’m not in a rush to come to a final judgment, especially since it is 7 months from election day, so my personal preference is to wait and learn more before making my decision as a voter.

            CalAg said … “(2) University-related. Where is the university these days? The original CC direction was to jointly plan with UCD. That seemed to be going fine early on (e.g. the 2/11/14 joint presentation to the CC). Now the Perkins + Will consultant appears to be gone, the land plan has changed, and I don’t see any evidence of joint planning with UCD’s East Village. And what about the Nishi connection to UCD? There should be no ambiguity on this issue at this stage in the process.”

            Perkins + Will were always secondary to Pinto & Associates in the original land plan preparation, and Pinto & Associates is still the primary design firm to the best of my knowledge. Regarding UCD’s plans for Solano Park (East Village?), given your closeness to all things UCD, you are well aware of the active protests that the current Solano Park residents conducted, and the political reaction that those protests caused in Mrak Hall. Bob Segar is probably the best person to check with if you want to know where the university is these days.

            CalAg said … “(5) High density urban housing. Urban housing in the context of a mixed use research park means workforce.”

            Using the word “means” in relationship to housing anywhere in California is a stretch. I believe it is reasonable to say that any attempt to legislate special treatment for specific demographic groups, such as “work force” employees, will quickly be challenged in court as discriminatory. Theworkers in the Nishi Innovation Incubator businesses are going to have to compete for available housing in Davis just like everyone else has to.

            CalAg said … “my conclusion is that the whole process is disingenuous and insulting to the voters.”

            Given the high level of intelligence and discernment of the Davis voters, my suspicion is that if they feel the process is disingenuous and insulting, they will vote “no” when they cast their Measure J/R ballot.

  10. davisite4

    I hope there is strong consideration of the “all R&D” option, which would 1) provide more revenue than the mixed proposal, 2) release some (albeit not all) of the pressure to build on prime farmland, and 3) be prudent, getting much “innovation” space as possible given that Mace is likely to be more controversial.

    A hotel is not a good idea, given the other possible/likely new hotels.

    Then the university needs to be leaned on to provide more housing.  They have the land.  It shouldn’t be up to the city to provide it.

    1. CalAg

      davisite4: Nishi at 100% R&D is not a substitute for MRIC. The two projects would serve different (albiet overlapping) subsets of companies.

      Nishi – smaller companies tending to be earlier in their life-cycles
      MRIC – more mature companies needing a larger footprint than can be provided by Nishi

      The two sites would be synergistic and greater than the sum of their parts.

      1. davisite4

        I didn’t say it was a substitute.  I realize that one would serve larger companies than the other.  But people might see this as a way to get as much space for innovation as possible, given that some others of us will fight Mace tooth and nail.

        As for whether having the two sites would be greater than the sum of their parts, if the whole is the whole of Davis, then I would argue that the sum would not be greater.  But that is off-topic here.

        Here I am just trying to suggest that there are reasons both for the pro-Mace crowd and the anti-Mace crowd to support an all R&D solution.  Not to mention the “pro revenue” crowd, which cuts across both.

  11. skeptical

     
    The City Council asked staff to put together development proposals that would meet a certain set of criteria, including the production of a significant financial contribution to the City general fund.  That is an easy task, if you know what you are doing, and if you have the proper intentions.  As proposed, Nishi and MRIC fall well short of what was requested, even with the fanciful lodging projections.
     
    Imagine sending City staff to the grocery store for a loaf of bread, but they return with two pounds of bacon fat.  What would you do?  Would you propose a new parcel tax, increasing the sales tax, hosting a community workshop, increasing staff training, hiring a consultant, asking the developer to pay for an environmental study and any associated legal costs, or punting the question to the voters? 
     
    Would you offer your own potential solutions, or would you call for firing staff and hiring people with the appropriate skills and intentions?
     

  12. CalAg

    davisite4: It’s important for the health of the tech ecosystem that the City have the ability to support the entire company life cycle. Without a larger site (like Mace) to host mature companies, the economic development strategy fails. Nishi then becomes kind of irrelevant from a fiscal sustainability standpoint.

    1. davisite4

      I don’t follow that logic at all.  Nishi could serve as a tech incubator for the larger region.  You are assuming that the boundaries of the ecosystem are equivalent to Davis’s boundaries.  Expand your boundaries and we don’t have to have a huge hulking traffic-causing farmland-eating view-destroying tech park on the edge of our town.  (Sorry, strayed off topic again).  The main point is, no, I don’t buy it that the MRIC is necessary for Nishi to survive, thrive, and pay off.

      1. CalAg

        We’re getting tangled up in semantics.

        The local tech ecosystem is what yields economic benefits to the City of Davis. As you pointed out, this ecosystem exists within a broader regional ecosystem that also benefits from what happens in Davis – but that’s largely irrelevant to fiscal sustainability in Davis.

        If the goal is to generate significant new revenue for the our General Fund by growing our tech sector, then the health of the local tech ecosystem (Davis and it’s immediate sphere of influence) becomes material to accomplishing this goal.

        Assuming that’s the City’s goal, then Nishi at 100% R&D isn’t enough. In addition, a model where small companies launch in Davis (e.g. Nishi) and then move away when they become successful is also a losing strategy if your ultimate goal is to build a local tax base.

        If the City is, in fact, serious about addressing the fiscal sustainability issue by building a more robust tech sector, the winning strategy is Nishi + MRIC + downtown redevelopment (commercial – not residential). We figured that out in 2010 and have failed to execute while the opportunity slips away. And now Nishi has morphed into a Trojan horse for a high density student housing complex, and the Ramos folks (MRIC)  may be showing their true colors by their recent RFEI-violating bait-and-switch request for 850 units (that virtually guarantees the Mace property will not get annexed if they don’t immediately course correct).

        From your rhetoric, I assume that you don’t really buy in to the economic development strategy? I get that. Not everyone does. Maybe more taxes will be enough. Maybe the economic benefits of the tech sector have been oversold. Maybe our system is so paralyzed that we’re screwed no matter what we try.

        1. davisite4

          You say:

           In addition, a model where small companies launch in Davis (e.g. Nishi) and then move away when they become successful is also a losing strategy if your ultimate goal is to build a local tax base.

          But what if new small companies come in to replace the old?  I don’t see why that wouldn’t be a financial benefit to the city, and a lot less risky with a lot less impact than a big complex full of big companies.

          So, no, I don’t buy into the full economic development strategy, but I think something smaller scale (just Nishi + commercial downtown redevelopment) could be financially beneficial to the city.

          We seem to agree that both Nishi and MRIC proposals have deviated off of their intended paths in an unproductive way, so that’s something.

          I do worry that the economic benefits of something more large scale have been oversold, and I think that the negative impacts have been undersold (has tech been good for San Francisco as a whole?  There is a lot of reason to think that the answer is “no”).

        2. Frankly

          has tech been good for San Francisco as a whole?  There is a lot of reason to think that the answer is “no”).

          Not at all.  It has caused the revitalization of broken down neighborhoods.  It has contributed to the overall economy as those people spend.

          There isn’t anything negative that I can think of other than traffic.

           

        3. davisite4

          Read the SF Chronicle – nearly every day there is a story.  Here is a sampling:

          Rampant income inequality.  Outrageously insane rents. People forced out of their homes. Longterm businesses closed in favor of more and more housing. Loss of SF character.  Loss of art scene.  Loss of African American community. Businesses can’t find enough workers because they can’t afford to live there (or anywhere within semi-decent commuting distance, since it’s not like the rest of the Bay Area is much better).  Teachers, police, etc., can’t afford to live their either.  Families driven out as well.

          People think that you can just bring in a bunch of high paying, high tech jobs, and somehow we will all benefit.  No, the people with the jobs will benefit, and everyone else will pay the price.  There is no “trickle down,” and never has been.

        4. CalAg

          “But what if new small companies come in to replace the old?  I don’t see why that wouldn’t be a financial benefit to the city, and a lot less risky with a lot less impact than a big complex full of big companies.” @ davisite4

          You are correct – a small project will have lower impacts than a big project. Lower negative impacts AND lower positive impacts (e.g. taxes, wages, kids to keep the schools open, 25-55 year old adults to fill the demographic hole, local spending, etc. – all the stuff that is necessary for a healthy community).

          But if the goal is fiscal sustainability, then you have no choice but to try and minimize the negative impacts and maximize the positive impacts. However, at some point, well meaning efforts to minimize negative impacts become self-destructive by destroying too much of the positive impacts.

          Nishi is too small. Nishi + downtown redevelopment is too small.

          The fiscal benefits of the current Nishi proposal are definitely not worth the negative impacts. MRIC is probably too small, but a positive step that is worth taking because the positive benefits are significant.

          If your goal is to support Nishi as some sort of tactic to stop MRIC, your strategy (if successful) would maximize the negative impacts and minimize the positive impacts city-wide – and would almost certainly require significant new taxes in the future.

        5. CalAg

          “I do worry that the economic benefits of something more large scale have been oversold, and I think that the negative impacts have been undersold …” @ davisite4

          I speculated that “Maybe the economic benefits of the tech sector have been oversold.” This is because the MRIC/Nishi fiscal impact study is reporting fiscal benefits that are much lower than Pinkerton and the economic development staff were pitching last year. I specifically did not say “large scale.” In fact, it is just the opposite. 

          At 100% R&D, all other things being equal, MRIC project would provide approximately 5 times the fiscal benefits of Nishi. But all things are obviously not equal. MRIC will have significantly less fiscal impacts than Nishi because of differences related to infrastructure. In addition, MRIC will have significantly more fiscal benefits than Nishi because of differences related to end users. So just my rough guesstimate is that MRIC will provide at least 10 times more revenue to the City than Nishi (at 100% R&D) – and there are scenarios where it would be even higher than that.

           

           

           

           

      2. davisite4

        No, that is not my position (earlier, I merely pointed out that it could be someone else’s).  I actually think that an all R&D Nishi (not the current proposal) would be of a net benefit to the city, even if it didn’t go all the way toward solving our financial problems (assuming, of course, access issues are addressed).  I actually think that Nishi + downtown redevelopment + new taxes would be overall healthier for the city and would have less impact on lower-income residents (see my comment above about what has happened in SF with a large influx of tech workers).

        1. CalAg

          davisite4:

          The Bay Area has a staggering number of jobs and they’re running out of space because of the ocean, the bay, and the mountains. Davis has a trivial number of jobs and we’re running out of space because we’ve chosen (via Measure R and the current no-growth ethos) to be tiny and irrelevant (and increasingly crappy as our infrastructure, amenities, demographics, and mix of local businesses decay).

          There’s obviously a middle ground between these two extremes. Adding MRIC won’t make us anything like the Bay Area. It won’t make us anything like Natomas or Elk Grove either, for that matter. It would be about a 3.5% expansion in our municipal footprint – a small price to pay to reduce our dependence on taxes to run the City. All the other positive impacts are just icing on the cake (jobs, local spending, age 25-55 adults to stop the collapse of this demographic, kids for the schools, etc.).

          From the perspective of growing the tech sector to help get to fiscal sustainability – without annexation of land for mature companies that need a larger footprint, a 100% R&D Nishi + downtown redevelopment is a waste of time.

          I prefer MRIC over more taxes.

  13. Eileen Samitz

    First, I want to thank the Vanguard for raising a number of concerns about Nishi that I have had and spoken to publicly at City Council. But one point that everyone needs to remember is that Nishi was originally to be a “innovation park” project primarily for revenue for the City, not a housing project which is clearly the main objective of the developers. Davis has already fulfilled our SACOG RENA fair share requirement for housing for this cycle (which ends in about 6 years). Exceeding that fair share requirement for housing does not give us credit for the next cycle, but invites a large fair share requirement for the coming cycle. In addition to the problem of negotiating sharing the property tax with the County (since it is County land), any housing built now on Nishi (which would be excess) would also use up precious water resources and waste water capacity that would be needed for our next fair share growth housing requirement.

    The next important issue is that the main reason why Nishi was even being considered for development was to be a innovation park to be a “revenue producer”. This pipe dream came to a  quick end with the City’s fiscal analysis revealed that Nishi is a financial loser, costing us over $78,000 annually. That is, unless, a hotel is included in Nishi, displacing innovation park land that was supposedly needed for innovation park space for the “revenue producing” high tech. Yet, the City is  already planning another hotel/conference center, basically, directly in back of Nishi on Richards Blvd. Considering adding a hotel to Nishi makes absolutely no sense, not only because the two hotels would be back-to-back and are not likely to co-exist successfully, but what about the cumulative access and traffic  issues? Other comments posted today, and earlier have raised these same issues.

    Furthermore, all this talk about a “Nishi Innovation Park” to generate revenue for the City as the original intention, has  suddenly done a 180 degree turn since UCD has announced their LRDP “process”. All of a sudden, Nishi is all about providing UCD’s student housing that it has been grossly delinquent in providing. UCD has also made clear that they want to add at least 5,000 students, 4,500 of which will be from out-of-state or from our-of-the country (for UCD to extract higher tuition’s), and only 500 would be in-state students. But UCD  admits that UCD WILL NOT be able to house their own new students. However, it astonishing that California tax payers are expected to continue to pay the bills to build and operate the UC system. And note that there are plenty of new buildings being built on the UCD campus as it brags about its $1 BILLION dollars in endowments. Yet they will not invest in producing enough on-campus housing student for its own current and growing student population.

    Then there is the issue regarding the proposal for developing Nishi, originally, versus now. Any housing suggested for the site was supposed to be intended for “workforce housing” for the Nishi Innovation Park. Keep in mind that this is a fallacy since the Nishi project cannot legally reserve any on-site housing for any “workforce group”. This appears to be the excuse for the Nishi developers to include housing in their proposal proposing. However, this “workforce housing” was originally not to have anything to do with UCD student housing. This only enables UCD’s long-term  history of not building on-campus, long-term student housing as they promised in their 1989 MOU with our City. But now all of a sudden it’s all about UCD student housing needs.  However, Nishi housing units would be affordable to students anyway due to all the access infrastructure costs.  It is important to understand that although, housing cannot legally be reserved for students in the City, but it can (and should be built) on UCD land.

    UCD is clearly trying to continue to defer their student housing needs onto our community, rather then build it on-campus as promised in the 1989 City of Davis – UCD MOU.  This is not only unfair to our community with all the mini-dorms emerging as a result  in our neighborhoods,  but it is unfair as well to the UCD students who deserve to have UCD on-campus and long term affordable student housing. UCD, with over 5,000 acres, has one of the larges campus’ in the nation. It is shameful that UCD is not willing to provide sufficient housing for their own student population and the need to be called out on it now.  This is a problem that will get far worse since after UCD  adds 5,000 additional students by 2020, they have documented in the Nishi DEIR that UCD plans to add 7,000 more UCD students between 2025 – 2030. Yet, UCD, currently is silent on specifying where all of these additional 12,000 UCD students will live.

    In short, the Nishi project would be an enormous mistake if it was approved, and would be nothing but an albatross to Davis.

     

    1. hpierce

      I’ll disagree with Eileen and Anon here…

      To say, “one point that everyone needs to remember is that Nishi was originally to be a “innovation park” project primarily for revenue for the City, not a housing project…” is a patently false statement.  Unless you use the glasses of the iteration described in the current EIR.  Perhaps, even then. 

      The main, original proposal for Nishi (annexed to Yolo County in the 90’s, proposed for annexation to the City then, even got a Tentative Map approved) is NOWHERE near the “original proposal”.  Only the infrastructure/access issues remain.

  14. Eileen Samitz

    My apologies folks but I left the critical word “not” out of the 8th sentence in the 4th paragraph of my posting from last night at 11:33 pm. The sentence should have read the opposite of how it read last night. So the sentance should have read:

    “But now all of a sudden it’s all about UCD student housing needs.  However, Nishi housing units would NOT be affordable to students anyway due to all the access infrastructure costs.”

    Some of the info I posted  last night was covered, but not, all in my Oct. 25th Op-ed in the Vanguard. So I have added some new info in last night’s posting because the Op-ed was already long enough.  I  supplemented some newer info like the SACOG RENA issue and agreed with the Vanguard about how many more hotels can possibly co-exist, particularly right next to each other around Richards Blvd. bringing on even more traffic problems. It is astonishing that the developers are desperate enough to try substituting a hotel for high tech space to try make the abysmal Nishi financial analysis look better.

    Also, thank you Anon, and I agree with many of your points raised as well.

    -Eileen

     

     

     

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