MRIC Moves Forward As a Commercial-Only Project

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Developer Dan Ramos discuss the project in January
Developer Dan Ramos discuss the project in January

Just two weeks after the Davis City Council unanimously directed the staff to continue with preparation of the Mace Ranch Innovation Center (MRIC) as proposed only, and not as a mixed-use project, the project will be back before the Planning Commission to receive a status report and allow for public comments before providing feedback on the project design.

The proposed Innovation Center component of the project includes up to 2,654,000 square feet of innovation center uses and dedication of 64.6 acres of green space (including parks and open space) on a 212-acre site.

That 2.66 million square feet includes 1.5 million square feet for R&D (research and development),  884,000 square feet for manufacturing and research uses, 260,000 square feet for “supportive commercial uses” – which could include a hotel conference center with 160,000 square feet and 150 rooms – and another 100,000 square feet of other supportive retail throughout the MRIC.

Also discussed with be Mace Triangle, which is the 16.6-acre city-owned parcel that “was included within the overall project boundaries to ensure that an agricultural and unincorporated island is not created and to allow the continuation and expansion of existing uses.”

Staff writes, “Development of up to 71,056 square feet of general commercial uses including up to 45,900 of research, office, and R&D, and up to 25,155 square feet of retail is assumed on the Mace Triangle properties.”

However, this view is not universally held by council members, particularly Brett Lee.

With the housing option off the table, two key considerations that remain are the fiscal analysis and mitigation. The EPS report from the fall found that the project would net about $2.2 million – however, as was the case with the Nishi property, some have criticized the report for its conservative assumptions.

EPS found that MRIC contributes about $3.8 million in gross annual revenues, but $1.6 million in costs, for a net $2.2 million contribution to the city revenue at buildout. However, a revised economic analysis by the Finance and Budget Commission ramped up projections for Nishi, at one-fifth the size, to $1.4 million.

With efforts to enhance revenues such as a service-CFD or a per square foot assessment, it is conceivable that MRIC could generate well over $5 million per year.

As Rochelle Swanson put it two weeks ago, in arguing that the city could not afford to risk a mixed-use component, “Who bears the cost if this doesn’t pass, (it) is $2.2 million fiscal annually… a net $6 million potentially and a one-time $10 million fee.”

The Finance and Budget Commission is expected to meet on the item next Monday, March 14, and at that point we might get a better sense for what a more realistic assumption will be in terms of ongoing city revenue.

Another issue that needs more resolution will be where and how the project finds its mitigation. The Open Space and Habitat Commission was scheduled to meet Monday night. One thing that they will be looking at is a proposal to use the Howatt Ranch site as potential mitigation land.

As the Vanguard reported a few weeks ago, Dan Ramos, the MRIC project manager, is looking into an approach that would utilize the 775-acre and city-owned Howatt Ranch property that, in the past, the city has looked at as a possible sports park site.

Mr. Ramos has been discussing the possibility of purchasing that property, using that as mitigation land, and turning it over to the non-profit Center for Land-Based Learning, where they promote farmland practices that would help preserve the land as open space and farmland in perpetuity.

Councilmember Rochelle Swanson told the Vanguard that she is supportive of the concept. “It is completely consistent with what I have been talking about from day one, we need to be utilizing an opportunity to lock up our land in a conservation easement.”

Dan Ramos told the Vanguard that this is a way to move the mitigation right to areas next to the city as well as close to the property itself. Not only that but, by turning the land over the Center, he would avoid having to purchase land from a farmer and then allowing the farmer to continue to farm and harvest that land for profit.

However, Open Space advocates have told the Vanguard they object to using city-owned land that faces no real threat of being developed rather than land near the borders, where there are actual development threats.

The issue of how much mitigation and where figures to be a big issue going forward, now that housing on the site has been precluded.

—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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27 thoughts on “MRIC Moves Forward As a Commercial-Only Project”

  1. Barack Palin

    However, Open Space advocates have told the Vanguard they object to using city-owned land that has no real threat to be developed rather than land near the borders where there are actual development threats.

    I totally agree with this.

    1. Frankly

      I think you are missing the point that there is added benefit in this land being actually used for something that the city does not have to pay for.

      Also, as Davis changes with more working professionals and young families buying homes from the old folks that leave, the no-growth attitudes will likely diminish and pro-growth CC members will be elected and then you might wish that some of this city-owned land had been previously locked away.

      1. CalAg

        This smells like Ramos trying to game the system again. I’m guessing they hope to get the City owned land below market based on a favorable appraisal.

        Also, I think Greenwald’s reporting on this is incorrect. My recollection is that Ramos said in the Enterprise that they would lease the land to agribusiness users. The CLBL proposal was for a much smaller piece of land on a different property.

        The MRIC project is in deep political trouble based on their previous attempts to (1) change the rules of Measure R, and (2) manipulate the CEQA process to add a very large housing component to the project. There is still a reasonable path to approval –  but only if they stop playing games.

        If the City (as a matter of policy) wants a conservation easement on Howitt, then they should put it in place without MRIC. If they want to sell the property after the easement is in place, then they should put it on the open market and sell to the highest bidder. Anything less is fiduciary malpractice.

        1. David Greenwald Post author

          “Also, I think Greenwald’s reporting on this is incorrect. My recollection is that Ramos said in the Enterprise that they would lease the land to agribusiness users. The CLBL proposal was for a much smaller piece of land on a different property.”

          I met with Dan Ramos and his team, then I followed it up with phone interviews with Rochelle Swanson and Mary Kimball of CLBL. If we got it wrong, then they told it to me wrong. I don’t know what the Enterprise was told, I don’t know if the plan morphed.

        2. CalAg

          Just reread the Enterprise story dated 2/17/96. As far as I can tell, Ramos is proposing to buy 50 acres at the SW corner of the city’s Howatt property to give to CLBL. This is the same land that is being considered for a sports park.

      2. Miwok

        Also, as Davis changes with more working professionals and young families buying homes from the old folks that leave,

        Frankly thinks real estate actually changes hands? More like they change titles to family members who maybe live there already, OR they buy an extra house to supplement the income. Every time I see a home I thought to buy thirty years ago, they are still rented to students. Some of them have been cared for, many NOT.

        IF zoning were consistent with the uses of properties in Davis, or enforced, there would be so many changing hands it would be a Real Estate Boom. Start with that. Basics. Oh well, arguing with myself again. Be Well.

  2. Tia Will

    As Rochelle Swanson put it two weeks ago, in arguing that the city could not afford to risk a mixed-use component – “Who bears the cost if this doesn’t pass, (it) is $2.2 million fiscal annually… a net $6 million potentially and a one-time $10 million fee.””

    Rochelle Swanson asks a very reasonable question. However, this perspective avoids some other, equally valid questions.

    1. Who bears the cost if the financial gain to the city falls on the low side, or even lower than anticipated? Will we not then hear arguments that we need more such projects for yet more “economic growth”?

    2. Who bears the cost of the traffic, congestion, and adverse environmental impacts caused by the lack of housing which is another of the city’s problems that a project without a housing component will doubtless exacerbate.

    3. Who bears the cost of the increased need for housing throughout the city generated by an industrial use only project ?

    My feeling is that we should be endeavoring to create the best possible project that addresses the needs of the city in a holistic fashion not just addressing one side problem and just hoping everything “balances out”. Which of course it will not, and then we will be feeling the pressure for yet more housing. The classic “grow our way out of trouble” approach that has worked so well up until now !

    1. Frankly

      I think you might need to learn how to use a calculator.  It really is all simple math.  Expenses exceed revenue by a large amount.  So what do you propose we do about it if not grow our local economy so we can grow our local revenue?  And when you respond please keep your proposals in the realm of feasibility.

      1. Tia Will

        Frankly

        So what do you propose we do about it if not grow our local economy so we can grow our local revenue?”
        I am sure that you already know what my solution would be. I believe that as the adults, we have the obligation to pay as we go for the amenities that we want. I do not believe in passing our expenses on to others who come to town, or to our children. I have often stated that my preference is paying as we go, whether this is in the form of increased taxes, or tolls, or paying for downtown parking, with offsets for those who genuinely cannot afford to pay. I have said this repeatedly, so I really do not know why you keep asking. 

        1. Mark West

          The City has roughly $650 million in unfunded obligations for things that we have already ‘used’ but have not ‘paid for.’  With roughly 65,000 residents, that means $10,000 per person.  Following your approach, maybe we should all just write a check.  Not bad for you, perhaps, but for a young family with two children we are talking $40,000.  Not exactly chicken feed.

          We are not, of course, going to have a per capita tax, so the point here is to demonstrate the magnitude of the problem. We cannot solve this situation by simply raising taxes. The responsible approach is for the City to dramatically reduce future expenses, which can only be accomplished through reductions in Total Compensation, and to increase tax revenues by improving the economic vitality of the region.  We won’t solve the problem by building more houses, but we may by increasing the number of good jobs available for residents thus making the community wealthier.

    2. Matt Williams

      Tia Will said . . .  “My feeling is that we should be endeavoring to create the best possible project that addresses the needs of the city in a holistic fashion not just addressing one side problem and just hoping everything ‘balances out’.”

      I agree Tia.  The United Nations has said much the same thing in a slightly different way, “We should be striving for development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

      Graphically, that looks like this . . .

      http://www.nps.gov/subjects/culturallandscapes/upload/1050_1050Sustainability1.jpg

  3. The Pugilist

    I think it was a huge mistake to get rid of the housing component.  Now you will see the naysayers hammer this project on traffic and roads impacts that could have been mitigate with onsite housing.  Just watch.

    1. Tia Will

      The Pugilist

      Now you will see the naysayers hammer this project on traffic and roads impacts that could have been mitigate with onsite housing.  Just watch.”

      I don’t think that you will have to watch very long. I have long opposed the this project largely because of the pressures I saw with the lack of housing. It was only when the housing proposal was floated that I decided to take another look at the project since that had been one of my initial reasons for opposing it. With housing off the table, I am back to my initial position.

      Please note that I did not make up this concern. During my initial conversation with Mr. Ramos when housing was not a consideration per the city criteria, I asked him what the anticipated number of employees requiring house might be and his answer was a shrug and the comment ” thousands ?”.

  4. ryankelly

    Howatt Ranch would be better utilized by the Center for Land-based learning than developing it into a Sports Park.  A sports park is a type of development and will take it out of agricultural use.  The City shouldn’t be in the farming business.

    Since they are looking at including a hotel, could there be extended stay units to accommodate longer term or transient employees that may come for a few months at a time to work at an onsite company?  Or would that look too much like “housing?”

    1. The Pugilist

      You realize there is nothing preventing the city at the next council meeting from putting Howatt into an easement and then donating it to CLB.  If they do that, they will have the benefits of that process PLUS MRIC will still need to mitigate with land that’s not currently owned by the city.

      1. ryankelly

        I don’t think the City can give the property away.  It would be a gift of public assets and illegal, I think. They could lease it maybe.  Regardless, I wouldn’t dismiss Ramos’ idea outright.  The City needs to sell Howatt Ranch or there will be continual pressure to do something with in besides farming it.  If a sport park is what is needed and Howatt Ranch is not even close to being an ideal location, maybe a trade with land that would be better suited for this?  I’m sure I’m not the only one considering this.

      2. Mark West

        “You realize there is nothing preventing the city at the next council meeting from putting Howatt into an easement and then donating it to CLB”

         

        The City has somewhere between $500 and $750 million in unfunded liabilities. These are obligations that we have already made, and do not have the money to pay for.  The last estimate I heard shows that we will need to pay $30 million more each year just to keep this balance from growing larger. The City’s annual General Fund budget is only $50 million, so we will need to nearly double the budget today just to maintain the status quo. The last thing the City should be considering is giving away a valuable asset.

  5. Eileen Samitz

    I am sorry Alan, but housing on this site would not have reduced traffic. It was just a ploy to bring on 850 high density housing units that not many people live in long term.  There was no way that the developers could make the majority of that housing be occupied by MRIC employees, nor could it control how many people lived in each unit who worked elsewhere and had to commute. The MRIC worker – housing occupancy assumptions that were being made to try to make the argument of lower impacts were preposterous. The entire concept from the beginning of considering any innovation center was for revenue that the City needs. That is what MRIC needed to focus on as a commercial-only project.

    1. Miwok

      The comedy is the City thinks people would live there and work there..

      I just wonder when the City projects the Income of $3.8 Mil starts vs when the Expenses of $1.6 Mil starts?

      That, Frankly, was a question my calculator cannot solve, but it sound to me, like most Davis things, the Expenses will start way before the “profit” starts? Who pays that until it gets to be Profit?

      the City should solicit :Naming Rights” to get this off the ground?

  6. Ron

    “A hotel conference center with 160,000 square feet and 150 rooms – and another 100,000 square feet of other supportive retail throughout the MRIC.”

    This is the first I’ve heard about a hotel and retail.  My support is getting “shakier” all the time.

    For those who live in/near Mace Ranch, good luck trying to make a left turn onto Second, from Pena or Cantrill (if MRIC is approved).  (The recent, deadly collision serves as a reminder.)  Seems that MRIC should make a specific financial contribution to install traffic lights, to allow traffic to enter safely onto Second Street from those intersections.

    Not looking forward to the Finance and Budget Committee “coming up with” their own rosy projections again, as they did with Nishi.  (Hey – why even hire a professional, outside consultant in the first place?)

     

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