In the staff report for Tuesday night, staff is recommending the approval of the Nishi Gateway application, believing that “the project appropriately integrates the City goals for economic development, housing, environmental sustainability, community character, and fiscal responsibility.”
The application would allow the development on the 47-acre parcel west of Olive Drive, and nestled between UC Davis and I-80, to be annexed to the city of Davis and developed as a mixed-use innovation district and housing project, provided it would pass a Measure R vote, presumably in June.
Right now the project includes 650 residential units, 440 of which are apartments and 210 are condos. It has 325,000 square feet of R&D (Research & Development) space, 20,000 of retail and 19 acres of open space and park.
In the staff report, staff highlights nine reasons why they are recommending approval of the application.
First they write, “This site is identified as a priority development area in SACOG’s Sustainable Communities Strategy. SACOG [Sacramento Area Council of Governments] has concluded that the project is supportive of all of the Blueprint principles. Adding housing to meet the needs of community employees will help meet regional goals for VMT [Vehicle Miles Traveled] and GHG [Greenhouse Gas] reduction.”
The project also has “sustainability components stronger than any development in Davis.” Staff writes that they are :comfortable that this proposal, particularly when “balanced with a multitude of other policy objectives, appropriately contributes to city sustainability goals and takes the city in the right direction for new development projects.”
Third, “Housing and businesses on the Nishi property will provide customers for local businesses, particularly downtown merchants.”
Fourth, “Internal open space and bicycle/pedestrian connectivity forms the backbone of the subdivision layout. The project includes a grade-separated connection to the Old Davis road on the UC Davis campus.”
Development Impact Fees from the project “can assist in contributions to improving operations of the Richards Boulevard corridor, and the project will not go forward until Interchange improvements and the connection to the UC Davis campus are completed.”
Staff also believes “the project demonstrates unprecedented collaboration with UC Davis and Yolo County.” The financial contribution from the State of California Strategic Growth Council to the sustainability and environmental reviews “demonstrates the importance of this development to regional efforts in GHG reduction.”
In terms of the fiscal impact, “EPS found that the total one-time impact of construction of the Nishi project is estimated at 1,000 jobs, $186 million of output, and $75 million of labor income in the Davis economy, while estimates for the Yolo County economy show 1,800 jobs, $329 million of output, and $130 million of labor income. The Nishi project is estimated to produce an ongoing economic impact in the Davis economy that totals between 1,500 and 1,800 jobs, $315 million and $385 million of output, and $89 million and $107 million of labor income.”
Finally, staff writes, “The provisions of the Development Agreement address fiscal impact on the General Fund, and the Finance and Budget Commission concluded that the project would have net fiscal positive benefits to the City of Davis.”
Since the beginning of the year, staff, the community and the developer have worked to address concerns and to reshape the project baseline features, which would be unalterable upon passage of a Measure R vote – without a subsequent vote.
As the Vanguard reported earlier this week, the Finance and Budget Commission now believes that the Nishi project is a net fiscal positive for the city. As staff notes, “The Commissioners did not agree on the amount of benefit the City would receive. The final motion to conclude $1,400,000 of annual benefit passed on a 5-1-1 vote; dissenters agreed that the benefits would be positive, but suggested numbers in the $500,000 range.”
Staff reports (and there is a separate item on the agenda), “The City Manager and Assistant City Managers have met with the County Administrator to begin discussions of concepts for the necessary tax-share agreement with Yolo County.” Also on this agenda is a recommendation that the city council adopt “Principles for Nishi Tax Share Agreement,” to establish the City’s expectations for “tax-share discussions moving forward.”
The baseline features continue to evolve. As reported previously, the developer and council removed a provision that would have allowed an additional 20 percent dwelling units without a new vote. That leaves the baseline project as 650 dwelling units.
The Baseline Project Features limit the project to a maximum of 1,732 off-street parking spaces. “The City and the Developer are committed to exploring options to reduce the parking further, through the Transportation Demand Management Program, with a target maximum of 1,550 parking spaces. The Environmental Impact Report assumed 1,925 off-street parking spaces for the Nishi property. A reduction in parking spaces is one of the tools for achieving the desired reduction in Vehicles Miles Travelled and vehicle trips required by Mitigation Measure 4.14-5 and the Sustainability Implementation Plan.”
The Baseline Project Features require phasing the construction based on the approval of the grade-separate crossing, as well as the Richards Corridor study. First, “The Baseline Project Features call for all backbone infrastructure, including the grade-separated crossing to UC Davis and the improvements to the Richards Boulevard interchange, be completed prior to any occupancy on the Nishi site. Construction on the Nishi site could begin only after construction has begun on the interchange and the grade-separated crossing.”
Second, “The Baseline Project Features also include commitments for backbone infrastructure to the R&D properties with the first phase of development, to ensure ‘permit-ready’ sites when prospective purchasers or buildings are identified.”
There are also financial commitments, most notable, “The property owner has committed to a Baseline Project Feature for a projected net fiscal positive.”
One of these is the “make-whole” provision should property be purchased or leased by an entity exempt from property taxes.
The Baseline Project Features include “establishment of a Land-Secured Services Financing District for municipal services, to ensure positive fiscal and economic benefits for the City of Davis. This will provide a supplemental source of revenue to the City of Davis, in addition to projected sales and property taxes. The Development Agreement establishes a minimum of $300,000 per year to be generated by the District.”
Staff notes, “A Services CFD is different from an infrastructure CFD, which has the purpose of financing bond debt to provide capital funds for construction of physical improvements related to a development project. A Services CFD provides an ongoing revenue stream from payments that are made by property owners within the district and collected with the annual property tax bill. This provides a permanent source of funding for City operations to serve the project, in addition to property and sales taxes that would continue to be collected per statute.”
The Baseline Project Features establish “[d]eveloper commitments of $1 million for the affordable Housing Trust Fund and an additional $200,000 for the City Council to allocate amongst on-site civic arts, establishment of a local carbon offset program, and implementation of the Downtown Parking Management Plan, for a total of $1.2 million.”
There are also sustainability commitments. There is the belief that that a LEED-ND rating would be difficult to obtain certification for. The council believes in the value “of a third-party verification process for sustainability commitments.”
At this point, “The Baseline Project Features commit the City and Developer to pursue certification through Leadership in Energy & Environmental Design Neighborhood Development (LEED-ND) offered by the U. S. Green Building Council. Should that not be achievable, the project will be rated using the LEED-ND point system through a City-defined process, with a local citizens panel, as defined in the Development Agreement.”
—David M. Greenwald reporting
(Please note this is a summary of where the staff sees the project and the current baseline features. The Vanguard will have a series of analyses on critical issues leading up to the vote on Tuesday by council).