Monday Morning Thoughts: Can We Think Big on Collaborating with University?

Innovation-Park-example

There is a nexus between the two stories we have been running in recent days – the city’s “response” to the UC Davis LRDP (Long Range Development Plan) and the city’s fiscal position.  Yesterday’s column and Friday’s article laid out some of the bad news – it goes beyond just the $655 million of infrastructure needs and lays out where the city stands to see millions of increased costs for unfunded liabilities.

The bad news is this, if salaries grow by 3 percent, which is the level that CalPERS assumes and a level that keeps up with a traditional cost-of-living increase, “the pension contributions will require an additional $5.3 million per year.”  That is on a $60 million or so general fund.

The worst news is, even holding everything constant in terms of current compensation, we stand to have millions of increased costs to provide current compensation and benefits.

As Mayor Robb Davis explains, “While it is true that we are ‘keeping up’ as things stand currently, the cost of ‘keeping up’ continues to grow and that crowds out funding for other projects our community needs to maintain the level of service citizens expect.”

“Something must give,” he said.

As we noted, the short-term strategy is cost containment, hotels, and taxes.  But this is again why in 2013 we started looking into economic development.

But everyone is gunshy of large-scale economic development.  We saw Nishi with its 300,000 square feet go down to defeat – a narrow defeat, but a decisive one at that.  Before that fatal blow, the Davis Innovation Center proposed for north of Sutter-Davis hospital suspended its project and the Mace Ranch Innovation Center would suspend its project a year later.

Is the dispersed innovation model dead in Davis?  From the ashes of Nishi comes the investment by Sierra Energy in Area 52, and now the purchase of Interland by Fulcrum Property at $70 million, to create the University Research Park, gives us a glimmer that there are still investments to be made and still a future in economic development in Davis.

These companies are betting millions, in fact, hundreds of millions, on the prospect for economic development.

In the LRDP response document, the city looks to do some key things on commercial space.  First, they wish to “[i]ncrease availability of limited supply of commercial/R&D space within City for private companies.”  Second, they wish to reduce the “impact of property tax base by UCD owned/leased space within City.”

But to me the biggest of these items is this: “Explore opportunities for City/UC Davis collaboration on how best to gauge and accommodate spin-off business space needs stemming from on-campus research.”

There are still some opportunities to think big.  As we reported right before Thanksgiving, UC Davis is no longer wanting to put the World Food Center at the railyards in Sacramento.  That is a multi-billion dollar potential project that, if Davis can get its act together, could land in an innovation/research park here in Davis.

The World Food Center makes a huge amount of sense for Davis.  First, its mission jibes with the identity of Davis – academic, research, and agricultural.  It would bring in huge ag tech companies and startups.  It would become the fertile ground for technology transfer.  And it would jibe well with our agricultural identity, our desire preserve prime agricultural and our values about food security and overcoming hunger and fighting climate change.

The World Food Center could become the anchor for research and development in Davis that sticks to Davis values.

But there are barriers.

The university is skeptical about partnering with Davis.  Even on the modest Nishi-Gateway project, the university bowed out of the concurrent redevelopment of Solano Park, in part because they feared Davis could not deliver on Nishi – and they were right.

Measure R makes it difficult for any entity, public or private, to want to invest in a partnership with Davis.

The second problem is that we would have to find a way to overcome the tax revenue if UC Davis invests in part of a research park.  Although, perhaps, limiting the UC Davis involvement to the WFC center and allowing the rest of the park to be privately developed might help.

When the Vanguard looked at the city’s retail tax dollars, its per capita tax dollars were near the bottom of comparable communities.

While cost containment and expansion of hotels represent good steps forward, without new sources for revenue, Davis is going to have trouble continuing to meet the community’s infrastructure needs while providing services and amenities that make Davis unique.

As Robb Davis put it, “something has to give.”  But we need to figure out a way to preserve the Davis that we all love.

I agree with many that there is no magic bullet.  But I disagree that small amounts of incremental change will thwart insolvency.

As Mayor Davis argued, “I believe we must discuss cost containment—broadly writ—and put a revenue measure before the population in the next two years.”

What does that look like?  The mayor said, “It is no exaggeration to say that over the coming 5 years (and beyond) we need an additional $15-29 million each year to cover all these costs combined.”

Easy to say, but what those taxes would look like will be mindboggling.  Cutting into those taxes with revenue from economic development is a better way to go – but if the community doesn’t understand the nature of the problem and is not willing to work to find solutions, we are never going to get there.

—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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67 Comments

  1. Tia Will

    It would bring in huge ag tech companies and startups”

    While I agree with most of the points that you are making. I also agree with what you seem to see as a positive, and I see as a definite negative. This difference is encapsulated in your ( correct in my opinion) choice of the word “huge”. I fundamentally do not believe that the word “huge” is compatible with the nature of our community. If “huge” is what is desired, then the rail yards in Sacramento would continue to be a much better solution as would perhaps Woodland. Although on both the national and local levels some seem to equate “huge” with better, I do not share that philosophy. With “huge” comes “huge problems” and changes. If we have “huge”companies, where are their “huge” numbers of workers going to live ? How are we going to provide services for the “huge” increased needs of both the companies and their employees ? Davis has already seen “huge” changes since I first arrived in 1979 and yet, here we are with the same structural problems, just on a larger scale.

    This is a classic expression of the “build our way out of trouble” philosophy upon which you and I differ.

    1. Barack Palin

       I fundamentally do not believe that the word “huge” is compatible with the nature of our community.

      I and I’ll bet most of Davis would love to have a company like Google or Apple move into Davis.

  2. Tia Will

    David

    I think that is the wrong question with regard to future development. I think that Mori Seki is one company which has benefits for the community. The question for me is how many Mori Seki’s before we change the fundamental nature of the community ?  The answer is probably somewhere between no more ( my preference) and as many as we can attract ( the preference of the grow as fast as we can group) and that is the question that our community is currently grappling with.

    I think of it this way. Sutter Hospital is a definite positive contributor to our community and an excellent fit for our community. That does not mean that we should also build a Kaiser hospital and a UCD hospital here because Sutter is beneficial. Sometimes more is not better.

  3. SODA

    To David’s question on Mori Seiki:

    I have asked this before. Does anyone know the tax revenues they provide the city? And  how many jobs?

    I am sure they are a fine company but I do not think their building is attractive in any way. A huge (sorry Tia) windowless factory building. What is the net positive?

    1. Barack Palin

      What is the net positive?

      Umm yes.  Ask the people that work there if it’s a positive.  The building is in an industrial area.  I don’t believe it’s ugly, but it wasn’t built for the community’s visual enjoyment.

      1. hpierce

        True of sales tax revenue.  Not property taxes.

        I get why sales tax revenue, identifying specific payers is not “public”.  You may consider it ‘unfortunate’, but it is to protect the business from competitors’ knowledge of the company/business…

        1. South of Davis

          hpierce wrote:

          > I get why sales tax revenue, identifying specific payers is not “public”.

          > You may consider it ‘unfortunate’, but it is to protect the business from

          > competitors’ knowledge of the company/business…

          Public companies release average sales per store and/or average sales per sf (so you can get a pretty good idea of the sales tax per location of public companies).

  4. Marina Kalugin

    Think BIG?????????   with LK gone and JM gone and with mealy mouthed yes men in charge now….and with the Napol still in charge and yes boys in charge of the council… nada….have to wait a few more years  until Matt is on the council….can we get rid of the developer and realtor funded yes boys next time?  who knows and who cares right?   I cannot even vote in Davis any more….but my daughter-in-law and son wanna live there…if they ever have children my grandchildren then I have to care right?   cya

    I will likely get something closer in and so on.. but first I have to divest of some of my other properties….omg my organic farm/ranch in Capay had chemtrails within site….nada

    It was over the Bayer land a few miles south … but still nada…the drift and all..omg..

    In Baja there were chemtrails by the USA fly buys in 2013.   The gringos all complained…that was the END of the chemtrails….got it…in MX they follow the money …

    and the gringas and their developments bring jobs and visitors.

    The MX protect small business…..nada the US of A@@@@@@@

      1. Biddlin

        That must explain why you allow her to libel others at will, go far astray of every topic, post harmful health advice and grace us with seditious and manufactured vignettes from her life.

        1. Barack Palin

          It reminds me of Art Bell and his Coast to Coast radio show.

          Bigfoot, chupacabras, yetis, chemtrails, ghosts, the Luminati, out of body experiences, alien abductions……………….

  5. Marina Kalugin

    not really PROP taxes are public… ask me and I will share ALL

    even nonprofits in the USA are not secret info…

    one can use the YOLO tax records to learn a ton….and then one can use other deductive skills they don’t teach under common core to extraplitate who is doing why and what for..

    [moderator] edited, off topic

  6. Marina Kalugin

    and some of ya may…not likely …the DS is busy at work earning his tax deductions while furthering or is it pandering to his agendas….wtf knows.. I sure don’t.

      1. Ron

        Don:  “And I don’t have a specific agenda.”

        You absolutely do have agenda(s), which you’ve made a point of repeatedly on the Vanguard.  (Most, if not all commenters have an agenda.) (Perhaps a more accurate description is a “frequently-expressed point of view”, regarding particular issues.)

        1. Don Shor

          I have opinions on various issues, which I am not reluctant to share. But I have no specific agenda. This is getting off topic, so I’d prefer that we not continue this on this thread. I was just responding to Marina’s comments.

  7. Marina Kalugin

    according to some of the business law classes I took at UCD and then later for my MBA at Sac State U….of course that was some decades ago I learned a thing or two about nonprofits also  DG is running a huge risk with a guy who is so biased as his moderator… we were just chatting about that again this morning..

    and I told him my plans if he won’t clean it up……got it ?

     

    1. hpierce

      Oh, I get it… adding ‘extortion’ to your repertoire, oui?  MX gives advanced degrees in that…

      Maybe MH intervention would help… and am not referring to a Davis attorney…

  8. Ron

    Although the university pays no property tax on developments it owns or leases, I realize that this can theoretically be addressed by agreements, prior to development. Without such agreements, the financial benefit to the community would be far more questionable.

    I just wonder if Sacramento would offer a “better deal”, and would forgo the ongoing property tax.  If so, Sacramento would likely offer a better deal for the university and/or developer. Perhaps Sacramento is more “desperate” to attract such activity to its railyard. (Certainly, their mayor seemed quite supportive of the proposed development – as noted in a previous article.)

    1. hpierce

      “Theoretically” is the key word… two problems with that theory… first is that once a property is developed, its assessment goes up no more than 2%/yr; second, the chances of UC agreeing to that is about the same as you being struck with a meteorite in the next six hours… don’t rush out to buy a hardhat…

    2. South of Davis

      hpierce wrote:

      > first is that once a property is developed, its

      > assessment goes up no more than 2%/yr;

      If you do nothing by maintenance California property taxes will go up by 2% most years, but if you pull a building permit to improve a property the taxes can go up by a LOT more than 2% a year (I know a guy that put a second story of office above a Bay Area industrial building and his tax bill went up by MORE than 100% in one year)…

      P.S. After the recent Oakland fire I think we will have less people looking the other way at non permitted work and the state should be making more tax revenue…

      1. hpierce

        You are correct… I should have been more clear… once a property is developed, absent additional permitted improvements, it can only raise 2%/year.  Yet, let’s say you have a 250k property acquired 20 twenty years which now would fetch 500k if you sold it, you still only pay based on the acquisition cost plus a max of 2%/yr.  If you added 20k of permitted improvements, you’d pay based on that amount plus the 20k.  It is only if the value of the improvements are truly significant (not sure, but generally ~ 25-50%), does the entire property get reassessed.  Or change of ownership, where it gets re-pegged to market.

        The Oakland warehouse is probably a “total loss” (in more ways than financial, in my opinion)… so, if it is torn down and rebuilt, it would likely be assessed at ‘market’ regardless of previous assessed value, even with the same owner.

        Your friend’s thing seems to match the “substantial change” criteria… if not, he should appeal the assessment… many did a few years back, when the purchase price ended up exceeding ‘market value’, due to the bubble burst… that was generally successful for the applicants.

        Main point I was trying to make is that UC will never pass up their property tax exemption… on properties they lease, suspect that is part of the calculus when they negotiate the rental costs… probably split the decrease in property tax with the landlord…

        1. Robert Milbrodt

           
          Property taxes are not difficult to understand, but the rules are not as straight forward as some seem to think.
          All property is supposed to be re-assessed upon completion of construction or change of ownership.  All property is also supposed to be reviewed annually (as of Jan 1st) to assure that assessment do not exceed current fair market value.  Just because it is supposed to be done, does not mean that it is being done, or that it is being done correctly.
          Only the portion of completed contruction or the portion of a change of ownership is subject to reassessment. The reassessment of that portion is not supposed to exceed its fair market value as of the date of value (the date the construction is/was available for use, or the date of the change of ownership).  The construction does not have to be “permitted” to be assessed.  The test is the extent to which the construction contributes value to the underlying property.  There are presumptions that repairs, replacements, and many reconstructions do not contribute value.   Tax appraiser are supposed to do this analysis and provide market data to support any assessment changes that are being made.  (Again, just because they are supposed to doesn’t mean they are, or that they are doing it correctly)
          In the event of a calamity (such as the Oakland warehouse fire), the property owner may replace the original structure with no change to the original assessment.  There also are ways to work within the property tax rules to modify the replacement structure while retaining the bulk of the original assessment.
          Anyway, there are many ways to structure development agreements and arrangements with UCD that would provide tax advantages to the Davis community.  What’s missing is the knowledge and the desire to do so.   Many have repeatedly offered such expertise to the city and school district, as have I, and we have yet to even receive a reply.

  9. Biddlin

    What a shrike. I don’t know why David hasn’t blocked your ip already, hopefully this threat will finally prompt him to do so. Your hateful, seditious and mendacious posts detract from and often derail thoughtful comment. Since your intentions of leaving are as duplicitous as many of your anecdotes, I can only hope that David and Don finally act in the interest of the majority of the Vanguards readers.

    1. Ron

      Biddlin:  “I can only hope that David and Don finally act in the interest of the majority of the Vanguards readers.”

      I disagree.  Although I don’t always agree with Marina, and find that some of her posts go off-topic, she also hits on some important points, at times.  (Actually, most commenters eventually go off-topic, but it usually builds that way in a more step-by-step manner, in response to other commenters.)  Not seeing any “threat” here, either.

      No one is forcing anyone to read or comment on another’s posts.  (I often “skim through” comments, to see if there are important points.) Nor is anyone prevented from commenting on another’s posts, as long as it adheres to Vanguard policy.

      1. Barack Palin

        I agree Ron.  Marina has done nothing that deserves to be banned from commenting.

        Biddlin, there’s a blue “Ignore Commenter” button  right here————————->

        You asked for it, stop complaining and use it.

      2. Biddlin

        “and I told him my plans if he won’t clean it up……got it ?”

        That’s a threat worthy of Mario Puzo. This harridan is an affront to common decency.

      3. ryankelly

        It is a dilemma – should crazy comments, outbursts and veiled threats be tolerated or should the community  pressure the person to exert some self control?  What would be the healthy option?  Would providing clear boundaries of acceptable behavior help or would it result in a violent response?  Should the commentator be allowed to continue with the community giving them a figurative pat on the shoulder and ignoring them (what you are suggesting).  You may not see threat here, but its clear that the commentator believes that it is, so we should take it seriously.  I don’t think I’m alone in thinking there is a problem here.

        1. South of Davis

          Ryan wrote:

          > It is a dilemma – should crazy comments, outbursts

          > and veiled threats be tolerated

          Anyone that wants to ignore Marina can just hit the ignore button.  I have not done it yet since she makes some good points between her “crazy comments, outbursts and veiled threats”…

        2. Barack Palin

          RyanKelly, same advice to you that was offered to Biddlin.

          Ignore commenter button———————————————————————->

          Click on it and your threat(really????) disappears.

  10. Edison

    There would be many benefits to the approach David suggests. Good, well planned high-tech and “innovation park” developments would provide logical linkages to the basic research conducted at UCD and provide employment to a highly educated populace.  The World Food Center would likewise be a logical development in which the City of Davis and UCD could potentially collaborate.

    I do take issue with the following statement in David’s commentary: “But everyone is gunshy of large-scale economic development.  We saw Nishi with its 300,000 square feet go down to defeat – a narrow defeat, but a decisive one at that.”

    I would not agree that everyone is reluctant to approve large-scale development. I believe the Nishi vote lost for a variety of reasons, but the 300,000 square feet of commercial space wasn’t one of them. The reasons included the project’s student-oriented housing component (which is UCD’s responsibility), residential development in an area that the EIR found would have significant and unavoidable human health air quality effects, traffic impacts, and others.

    I believe Measure A would have won, and perhaps have easily won, if the project had been limited to an innovation park. Such a project would have put to productive use a vacant parcel that despite its disadvantages has the benefit of being close to both the university and downtown Davis.  Putting a commercial development near I-80 would not have had the same air quality implications because (as Davis has pointed out previously), commercial buildings could have particulate filters and because such buildings typically don’t have windows opening to the outside, as do residential structures. And, most commercial buildings are not occupied around the clock and on weekends, as would have been the apartments proposed for the site.

    Plus, in my opinion the Measure A proponents harmed their campaign by employing college students to make phone calls and door-to-door campaign visits. It was obvious in talking to those students that virtually none of them knew anything about our town’s long-standing tradition of limiting growth to maintain a small town feel, preserve nearby agriculture and moderate environmental impacts. During those student phone calls I would ask them whether it should in fact be the university’s responsibility to provide on-campus housing, rather than the city of Davis, and in every instance they finally admitted that UCD should in fact do so. Although I never thought of this during the Measure A campaign, I don’t think I’d want my son or daughter living that close to a busy railroad track. Just think of the inherent risks associated with a derailment, especially if the recently defeated oil shipment proposal had gone through.

    I would urge our city’s leadership to open a dialogue, through the 2×2 process Council has established, to see if a collaborative approach can be achieved to locate the WTC at the Nishi site.  I am sure that creative minds would be able to find a way to jointly develop the site without sacrificing the property tax benefits that the City definitely needs. (Again, thanks to Mayor Robb Davis for continuing to emphasize the City’s fiscal difficulties.) The only caveat would be that the site should be totally devoted to WTC and related activities, but no housing. I can virtually assure Vanguard readers that housing would again garner opposition from the concerned individuals who, with only $20,000, managed to defeat the highly financed Measure A campaign.

      1. Marina Kalugin

        perhaps…. it is still toxic to the inhabitants of the cubicles….the costs to handle the air quality and so on on that toxic dump site will be horrific.

        I loved the train when I lived within 50 yard of it on Nishi but the property was heavily sprayed by crop dusters as was Ricci….

        The best use of the land is to do research on the emissions of the trains and I80.

        If Dr. whatever from Physics.. Cahill?  would like some seed money I have some to give him…

        But we have to move fast…..

        I have to make some smart donations before the end of this year….

        1. hpierce

           the property was heavily sprayed by crop dusters as was Ricci….

          That is a flat out lie… at least since 1972… probably long before… or perhaps a Kalugin induced psychosis?  The Ricci property was known as a ‘truck farm’… you don’t crop spray those…

          Marina, can you provide one tiny shred of evidence that the Nishi property was crop sprayed after I-80 was built? That the Ricci property was after the early development adjacent to it in the 60’s?

          Or is this another “made up” “fact”?

          Looks like you did well on the public dole, and will still do so… and yes, you can be easily found on ‘transparent california’… as you say, ‘follow the money’ … to MX, where you will pay no taxes on your pension… nice ‘move’…

      2. Alan Miller

        Just think of the inherent risks associated with a derailment, especially if the recently defeated oil shipment proposal had gone through.

        As many are similarly confused:  only one of two proposals was defeated:  Bencia Valero.  The Phillips 66 San Luis Obispo project is still pending.  That project could bring 100 car oil trains through Davis multiple times per week.

        I don’t think I’d want my son or daughter living that close to a busy railroad track.

        Many people in Davis live much closer — do you propose that they be relocated?  Vacavill is building new housing along the same rail line.  What criteria do you propose as a buffer between housing and railroad tracks, based on what?  Of course the answer is, no answer, you are just against Nishi and proposing a bad argument.  There are no laws that prohibit housing near railroads.

        1. Marina Kalugin

          PHILLIPS 66….omg is anyone voting for that…omg….really?  na da….if anyone has a nonprofit that I can donate to …against that …lemme know…ya know where to find me right?

    1. hpierce

      Unlike Ron, I disagree… problem was motor vehicle access via Richards/Olive from West Olive… that’s why I voted against it, as did 3 other members of our household…

      1. Ron

        hpierce:  That is the problem with that site, regardless of the type of development.  I seem to recall that you have some professional experience, regarding traffic engineering. And, that you pointed out the impact (on the entire intersection), resulting from an extended left-turn light (for northbound traffic on Russell, turning left onto Olive).

        I was just agreeing with Edison, that it likely would have passed (approved by a majority of voters) if its use was limited to an innovation center. I suspect that the voters of Davis would be more supportive of such a use, even with the problems it would create.

  11. Marina Kalugin

    and guess what if someone would ask me wtf I am ….I would proudly say I am an activist….the rest is all for later cya   🙂

    At times in my life I would also say a TECHIE.   I knew Steve Jobs personally…he tried to follow the money but didn’t learn the truth early enough.

    I support David’s agendas and campaigns….I don’t like to throw out idle threats…he knows me well enough to know I am never IDLE and always follow up my suggestions with documents….some pay attention some do not

    for a few days I am back in the same time zone.   gotta run…

     

     

  12. Marina Kalugin

    my work is done here for today…gotta rush…while the county offices are still open   🙂

    the mark of a true master is to rile up the minions and then leave them at it.

    the Jews in the original communist party were masters also.. cya

  13. Chamber Fan

    Strongly supportive of the WFC and the city to re-examine a research park on the periphery.  Heartened that people would consider a research only proposal.  Perhaps with the WFC and university involvement it can be economically feasible.

  14. hpierce

    ones on here with a ton of alphabet soup letters next to their names

    according to some of the business law classes I took at UCD and then later for my MBA at Sac State U…

    I can claim 3… only one of which you could ever attain/aspire to… assuming you graduated from a baccalaureate program… was it in science or arts?

  15. Ron

    You guys do realize that some of the comments directed at Marina might be construed as an overly-personal and unnecessary attack?  Not sure what the Vanguard policy is, regarding that. If there is one, I’d suggest that it’s not being enforced.

    Seems like there’s a fine line between good-natured/amusing “teasing”, vs. character assassination.  Most comments seem to fall somewhere in-between.

    1. hpierce

      So, one cannot call a series of patently untrue statements “lies”?  If someone consistently makes such statements, is it wrong to call them a ‘liar’?

      I get your drift, generally, but should we take mis-representations, etc. and respond only by “good-natured/amusing “teasing””?  Particularly when the other is not playing by those rules?  

      Consider “minions”; “Jews in the original communist party were masters also…”; “I don’t like to throw out idle threats…”; “.can we get rid of the developer and realtor funded yes boys next time?  who knows and who cares right?”; “the DS is busy at work earning his tax deductions while furthering or is it pandering to his agendas….wtf knows.. I sure don’t.”

      Nah, nothing in those contributions today were inappropriate, and all were “good-natured/amusing “teasing””.  Yeah, right..

      Would you like to invest in a bridge between Manhattan and Brooklyn?  I can get you in cheap!

      Best.

      1. Ron

        hpierce:  It was a general comment, not directed at anyone in particular.

        I realize that you have a particular interest in ensuring that statements are factual (regardless of one’s point of view).  That is a valuable service for all Vanguard readers, even when you point it out in a rather blunt manner.

        In general, I’d have to disagree that responding “in kind” is a sufficient justification regarding responses.  (Reminds me of “he/she did it first”.)  I suspect that we all do this, to some degree.

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