Is Nishi Ready For Prime Time? Staff Thinks So

Nishi Artist Rendering
Nishi Artist Rendering
Nishi Artist Rendering

Staff is recommending that the Planning Commission forward Nishi to the Davis City Council for certification of the project Environmental Impact Report (EIR) and project applications at its meeting this week.

The Nishi project is a mixed-used development with 650 residential units including 440 rental apartments, 325,000 square feet of R&D space, 20,000 in retail and 19 acres of open space along with a hotel that is a conditionally-permitted use, subject to subsequent review and market analysis.

There are a number of critical issues that have come up that need to be addressed going forward.

In the staff report, concerns presented by Dr. Thomas Cahill were addressed at length. In an article the Vanguard ran in November, Dr. Cahill previously testified, “If the Planning Commission should decide to support the Nishi proposal, the threats from air pollution (diesel and ultra-fine metals) are so grave that it should be modified to eliminate all residential housing.”

While the Draft EIR “acknowledges the health risks associated with Toxic Air Contaminants and placing residential uses and other sensitive receptors near freeways and major roadways” it notes, “The location and pattern of the proposed MTP/SCS [Metropolitan Transportation Plan/Sustainable Communities Strategy] growth is important, because it impacts travel behavior and provides a means to determine the impact of future vehicle emissions in the proposed plan area. A compact growth pattern served by an efficient and diverse transportation system provides the foundation to reduce automotive travel and increase walking, bicycling, and transit use all of which reduce individual vehicle trips and associated VMT [Vehicle Miles Traveled]. Reduced VMT and vehicle trips are directly linked.”

The DEIR further notes that “in order to achieve the greatest VMT reductions from a compact growth pattern, development also must necessarily be in close proximity to public transit and freeway and major roadway corridors.”

Staff concludes that, while the air quality conditions are “determined to be significant and unavoidable,” they “do not represent air quality conditions that are unique or within which residences throughout the state do not or cannot exist.”

Some have expressed concern with fiscal analysis that showed the project ending up at a $78,000 net deficit. However, the developer believes that, with a hotel, they can get into the positive. 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.

However, there are questions about “the ability of the Davis market to absorb all the proposed additional rooms.” Council has already approved a hotel conference facility on Richards and staff notes “entitlement applications were submitted for two extended-stay hotels: one on Cowell Boulevard in south Davis, and one on 2nd Street in Mace Ranch.”

Both proposals would require approval of council.

Staff notes, “Staff and the City Council have raised the question of the market’s ability to absorb all proposed hotel rooms, and are seeking to have a game plan for evaluation of the various proposals to maximize consistency with City Council goals to facilitate development of a hotel conference center, ensure fiscal resilience, develop a diverse economy, and improve downtown as a destination.”

The city has contracted with HVS Hotel Management Contract Survey, a hotel consulting firm, to evaluate the proposals and the potential for the Davis market to absorb new rooms. Staff reports that they are hoping to bring preliminary conclusions to the city council in February.

Staff notes, “The HVS analysis is not evaluating the hotel proposed as part of the Mace Ranch Innovation Center concept.”

The staff report notes that the city has contracted with Andy Plescia and Associates for an analysis of the economics and development feasibility for the Nishi property, as they did for Cannery. The analysis “concluded that the proposed project had a gap of approximately $9 million between anticipated infrastructure costs and the amount that could be supported by the development cost, primarily due to the cost of the roadway connections.”

It is believed that the gap “could be closed through mechanisms such as a Community Facilities District or other infrastructure financing tool.”

Staff writes the draft Development Agreement reflects the following commitments of the city and the developer.

It includes the following stipulations:

  • The Developer has a vested right to develop the property in accordance with the entitlements and the Baseline Project Features.
  • Commitment to the SIP [Sustainability Implementation Plan] and specific to sustainability features, including 4.9 MW PV or equivalent, 10 percent reduction in parking, and building performance exceeding 30 percent better than 2013 Title 24 requirements.
  • Development on the Nishi property cannot go forward without UC Davis commitment to the grade-separated crossing to the UC Davis campus.
  • A Transportation Management and Phasing Plan tied to improvements on Olive Drive, the Richards Boulevard corridor, and the Richards Interchange. No buildings would be allowed to be occupied until Richards Interchange improvements are completed.
  • Agricultural mitigation will be provided in accordance with the Agricultural Protection Ordinance.
  • Developer commitment to a net fiscal positive general fund impact, even without a hotel.
  • Developer reimbursement of City pre-development costs under the cost-sharing agreement.

Staff notes that the Development Agreement “also establishes the Baseline Project Features required by Chapter 41 of the Davis Municipal Code. If the project is approved, these Baseline Project Features cannot be removed or significantly modified without subsequent voter approval.”

But these baseline features have not been established.

Moreover, staff writes, “There are components of the Development Agreement that will not be known at the time of City Council action on the applications. This is a factor of both the timeline required to allow the City Council the ability to place the General Plan Amendment on the June 2016 ballot for voter consideration, and a desire to know whether the project is approvable before expending the effort to resolve all remaining issues.”

Staff anticipates the Development Agreement to have placeholders or re-openers reflecting:

  • Specific details of Community Facilities Districts or other financing mechanisms.
  • Development impact fee and community enhancement contributions, fee calculations and credits, and financial commitments to infrastructure improvements.
  • Specific locations for agricultural mitigation, Compliance will be verified at the time the mitigation land is identified for preservation, which would be required prior to any construction or conversion of the Nishi property.
  • Completion of tax-sharing negotiations with Yolo County.
  • Water and sewer connection obligations and charges.

Staff is recommending approval of the application despite the fact that there is no concrete agreement at this time with UC Davis on access issue. Moreover, while there are stipulations that the buildings cannot be commenced until the Richards Interchange Improvements are complete, the traffic analysis of Richards for the Hotel Conference Center is being legally challenged.

Ultimately, Nishi as a Measure R project will go before the voters, perhaps as soon as June, but will the voters approve a project with traffic analysis, roadway impacts and even university access up in the air? Those may not be questions for the Planning Commission specifically, but they certainly loom large over the larger issue.

—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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  1. Barack Palin

    Ultimately Nishi as a Measure R project will go before the voters, perhaps as soon as June, but will the voters approve a project with traffic analysis, roadway impacts and even university access up in the air?

    Look at what happened when the Cannery got approved by the CC with issues still “up in the air”.

    Hopefully the voters will remember and vote no if the Nishi project doesn’t have ironclad solutions to the issues in place before any vote.

    1. hpierce

      To clarify… Nishi should be in the City-wide CFD, for financial stability for those bonds [also could mean that the existing payments could be reduced, and/or bonds paid off earlier].  Or, alternatively, pay the higher rates for “impact fees”… in my opinion, the problem with Mace Ranch and the Cannery was the ‘Developer CFD’.  I’ll promote Nishi being annexed into the City-Wide one, and oppose the formation of a Developer one.  That might be “as clear as mud”… but don’t have time nor inclination to expand on that today.


        1. hpierce

          The City-wide CFD EXISTS, and has since the early 90’s… all new development (almost, Cannery being an exception as I recall… there may be others, but the smaller ones) was a part of it… Wildhorse, Mace Ranch Park, Aspen, Evergreen, etc., etc., etc.

          It was an alternative to paying higher development impact fees.  And the end of the day, for a given property, it attempted to be a “push”.

          Some developers opted (and City let them) to pay the higher impact fees instead [which might mean those were set too low].  The bonds were authorized ‘back when’.

        2. hpierce

          My amplification cut off, due to time limits on editing…

          If it was not for the City-wide CFD (new development after it was formed ~ 1990), the Pole Line Road overcrossing, some District parks, the Pelz bike/ped OC, the I-80/SPRR [now UPRR] undercrossings would not have been built when they were… the CFD allowed the City to sell and use bond funds.

          Hope that helps, but as you seem to discount anything I say, I doubt it.

  2. Tia Will

    I am not cynical, but I am exasperated. I am unclear about why our city staff would feel that Nishi, as a Measure R project, is “ready for prime time” with as many uncertainties as they have acknowledged, to say nothing of those which will certainly rise if the Cannery is any example.

    Please, please get the details figured out, and then present  a strong project for the Measure R vote. I have been in favor of a project at the Nishi site for as long as I have been aware of the possibility. But without some assurance that these issues will be resolved favorably to the city, I could not support what is essentially a concept proposal at this point in time.


    1. hpierce

      Tia… the EIR is a disclosure document, not “the answer”… disclosing the unresolved issues means the DEIR is ready for “prime time” makes sense… the EIR is not a decision [except as to what information is needed to decide the entitlements]… it is a document to present issues, define alternatives, etc.

      Would you opine that a “diagnosis” is a “treatment plan”?  Would you withhold a diagnosis until a treatment plan was in place?

        1. hpierce

          Betting that the PC will recommend to the CC whether to CERTIFY the EIR, as being complete enough to make a DECISION on the entitlements… arguably, in many circumstances, you should have a certified EIR in place to say “NO”.

        2. CalAg

          DP: Are you kidding? They are being asked to approve the whole enchilada.

          Deliberation and a recommendation that the City Council certify the project EIR and approve the following project applications: i. General Plan Amendment (Nishi Property) ii. Prezoning and Preliminary Planned Development (Nishi Property) iii. Gateway/Olive Drive Specific Plan Amendment (West Olive Drive) iv. Development Agreement, including Baseline Project Features as required by Chapter 41of the Davis Municipal Code (Nishi Property).

          This is coming in under the radar at Mach 3.


      1. Tia Will


        I understand what you are saying. However, I cannot think of a single instance in my practice in which I would provide a diagnosis without laying out the treatment plan at the same time. Even if my treatment plan was that we needed greater expertise than I had to offer, I always have a plan at the time of diagnosis even if it is only referral to the appropriate individual. Perhaps this is not realistic in public planning, but I hope it at least serves as an explanation for you about why I have the perspective that I expressed.

        1. hpierce

          Do you DECIDE on a treatment plan, or do you generate alternatives before a diagnosis is made?  That is what an EIR does.  A diagnosis may mean “no treatment at all”.

          To use an analogy in the medical field… my parent was diagnosed with Stage IV pancreatic cancer… no “cure”… however the parent was given options… no treatment, just pallative care, treatment with an expected prolongation of life, with pallative care an option, oh, but no “cure”.  Now that parent would have been offered “the pill”.

          In my opinion, short of filling the Richards UC with concrete, there is no “cure”… the best we can do is not make it worse, and some “pallative” measures.

          Unless you know someone with a magic wand.

  3. CalAg

    “Staff writes the draft Development Agreement reflects the following commitments of the city and the developer.”

    The draft Development Agreement reflects zero commitments. None. Nada.

    It’s a draft folks. Who knows what its final language will look like.

    If Staff gets their way, the DA won’t be finalized until after the Planning Commission and City Council blesses the project and sends it on to the voters for approval. And once it is finalized, it is just a contract between the City and the Developer that can be amended with three votes on the CC … without a public vote.

    But these baseline features have not been established.

    This is a big deal. Staff is trying to fast-track Nishi through the Planning Commission while the project pre-entitlement work is incredibly incomplete.

    It is stunning and amazingly disrespectful that Staff would ask the Planning Commission to pass the project to the CC for final approval without sharing the foundational documents like the Baseline Project Features. It’s also a slap in the face to the public, who obviously expect to provide substantive input on the BPF throughout the final stages of the hearing process.

    Staff gets a F for utterly failing to turn in their homework on time, and the CC/CM gets a F for putting them in this position to fail.

  4. Tia Will


    Do you DECIDE on a treatment plan, or do you generate alternatives before a diagnosis is made?  That is what an EIR does.  A diagnosis may mean “no treatment at all”.

    Neither. You need to be agreed upon the diagnosis before generating alternatives or deciding in collaboration with the patient upon the treatment plan. I agree that a diagnosis may very well mean no treatment at all. That is always an option as long as the patient, or city fully understands the potential consequences of doing nothing as well as all that of any alternative options.


  5. Jim Frame

    Anyone know if the Nishi fiscal analysis accounts for profit from the research/business park land accruing to the city, which is (was?) going to be the owner of that land?

    1. CalAg

      City ownership of the R&D component was part of the initial “deal” that got the current planning effort moving forward. See this link – page 3, bullet point #1.

      Although letting Pinkerton “play developer” on this acreage was a bad idea out of the gate, city ownership was definitely used by Staff and the Developer to “sell” the current entitlement process. It’s now off the table and has been swept under the rug.

      Depending on how the Baseline Project Features are written (i.e. whether development of the R&D component is required to get building/occupancy permits for the residential component), we will get a pretty good idea if the Developer’s ultimate goal is to actually develop the R&D component or just hold the land undeveloped for a future up-zoning effort.

      Too bad the BPF’s are not being made public at this time.

      1. hpierce

        Draft BPF’s would indeed be appropriate… but do you really want ACTUAL BPF’s until after vetting @ PC and CC?  I wouldn’t… but having a “menu” and recommendations certainly would be appropriate when it hits the PC on ENTITLEMENTS.  Not necessary for the certification of the EIR, tho’… at least in my opinion…

        1. CalAg

          Sorry. I assumed that it was implied that the BPF’s were “draft BPF’s” – only the CC has the authority to finalize the BPF’s.

          Staff simply needs to let the Planning Commission and the public see the draft of page 32 in this document:

          Asking the Planning Commission to take action without this critical information is a big problem. If I was a Commissioner, I would continue the public hearing until staff can produce a more complete packet for their consideration.

          The document on the table right now is an insult to them and the process.

  6. Matt Williams

    Jim, I do not recall that being discussed in the EPS fiscal analysis that was presented to the FBC, and after a quick review of the 199-page analysis document, I found no reference to land accruing to the city.  The very logical place where that might be discussed is on Page 14 of the EPS Report, which is quoted below; however, there is no reference to land accruing therein.

    The fiscal impact analysis is predicated on a set of assumptions that reflect current, conservative economic and demographic conditions. However, more favorable assumptions may significantly diminish the deficit or result in an annual net fiscal surplus for the City’s General Fund. For example, a moderate increase in taxable sales generated by the onsite retail and other nonretail, nonresidential uses will produce additional sales tax revenue that may diminish the estimated annual deficit for the City’s General Fund. In addition, a higher property tax sharing allocation for the City or the addition of a potential hotel project onsite may result in an annual net fiscal surplus for the City’s General Fund. Finally, privatization of parks, open space, and public works maintenance obligations may also result in an annual net fiscal surplus for the City’s General Fund. The details of these potential amendments to the Base Development Program (sensitivity scenarios) are discussed in detail in the fiscal impact analysis memorandum

  7. Jim Frame

    Absent a formal agreement to transfer the R&D acreage to the city upon entitlement, might not the $350k pre-planning expenditure by the city constitute a gift of public funds?

  8. Jim Frame

    This is pretty confusing, and I’m hoping someone can provide a comprehensive explanation of the actions.  Here are a couple of notes:

    1.  On 11/27/2012 the CC approved the Pre-Development Cost Funding and Negotiation Agreement with Nishi.  A key provision was that the development agreement would require Nishi to convey 22 acres to the city for development of a research/business park, in exchange for which the city would commit up to $350k toward the development application processing costs.  The Pre-Development agreement had a life of 24 months, so it would have expired in November of 2014.  (Not to excite the conspiracy theorists, but the city’s website only has minutes of 4 CC meetings for 2014:  1 in January, 2 in February, and 1 in December.  What’s up with that?)

    2.  On 06/02/2015 the CC approved a draft development agreement negotiation proposal.  The protocols section of this document state that the “main focus of this team will be the community benefit deal points.”

    And some questions:

    1.  What happened to the idea that the city was going to own and develop the 22 acres of R&D space?

    2.  Did the pre-dev contract expire, or get renewed?

    3.  How much money did the city spend on the pre-development application processing.

    4.  If the 22-acre transfer is no longer on the table, were pre-development expenditures (if any) legal?

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