Analysis: A Glance at the Nishi Ballot Arguments

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In general, elections are not won and lost on the ballot arguments, but the Nishi ones are somewhat interesting because there is a good amount of disagreement over core contentions.

I find it interesting that the core issue of the Yes on Measure J ballot argument drew very little attention.  The ballot measure is likely to rise or fall on both the degree to which the voting public believes that we have a student housing crisis, and also over whether the city or the campus is the entity that should deal with that housing crisis.

Being that as it is, I would say I am surprised that the ballot argument in favor of Measure J only briefly mentions the “affordable housing program aiding hundreds of disadvantaged students every year.”  The lack of affordable housing doomed the previous Nishi proposal and I would have emphasized it.

The argument plays up the location for student housing, environmental sustainability, and the traffic impacts.

The most controversial portion of the argument is probably the one that is least important.

The proponents argue: “This project will generate a one-time benefit of over $11 million in revenue for the City of Davis. Money that can be used for parks, roads and other city needs. Davis Unified School District will see an additional $2 million in one-time funding. The City also estimates almost $2.5 million in additional property taxes every year.”

The safer ground would have been to have mentioned that the Finance and Budget Commission voted 5-2 that they “generally concur with the estimate that annual ongoing revenues and costs for the city from the project would be modestly net positive over time.”

Going beyond that, they get into subjective analysis land.  Generally speaking, they are accurate: “This project will generate a one-time benefit of over $11 million in revenue for the City of Davis.”  Some will point out that these largely impact fees are reimbursing costs, others will argue that the language is technically accurate.

The city’s analysis is as follows: “Developer will pay Development Impact Fees to City of Davis as outlined in Development Agreement, currently estimated as follows: $11,000,000 impact fees plus $2,100,000 in construction tax and $2,100,000 permit fees. Developer will pay Yolo County Impact Fees currently estimated at: $2,200,000 Developer shall pay the Davis Joint Unified School District impact fees currently estimated at: $2,100,000.”

We can perhaps quibble as to how much of a benefit that actually is versus reimbursing for costs, but that’s a political debate.

The one area of real question is this one: “The City also estimates almost $2.5 million in additional property taxes every year.”

That statement appears to be misleading at best and inaccurate at worst.  It is not clear where that number comes from.  One possibility as we looked at 15 years of projected property tax revenue for the city, which appear to range from $34,000 to about $228,000, is that $2.5 million in property taxes is the sum total of those 15 years.  The other possibility mentioned to the Vanguard is that $2.5 million represents the full property tax generated at buildout, but the city only receives less than one-tenth of that.

Either way, not accurate as worded and perhaps flat out wrong.    A more accurate statement is that in addition to the one-time $11 million for the city and $2 million for DJUSD is ongoing property tax revenue.

But, really, this project is not about generating revenue for the city, it is about providing housing for the students, therefore, I would have stuck with the slightly net fiscal positive over time point and moved on to more important issues.

Now let us look at the arguments against Measure J.  The first one I find most interesting is that the argument here is not UC Davis should provide the housing, it is really about the air quality being adjacent to the freeway.  They eventually conclude: “Safer student housing can be offered on the UCD campus and elsewhere.”

Their core argument is: “Given the initial, limited air quality measurements, three years ago air quality experts urged the developers to perform measurements at the Nishi site itself over a longer time. Yet, they chose not to.”

Given that the project has dealt with the issues of affordable housing and traffic impacts, this is their strongest remaining argument.  Although as I pointed out yesterday, the need for additional studies at this point is questionable.

The reality is that there is not much difference between the existing inhabited locations along East Olive Drive and the uninhabited locations at Nishi.  It was pointed out that Dr. Cahill himself identified 10 characteristics that made Nishi problematic, and nine of them are shared by the area at East Olive.

The elevated portion of I-80 only encompasses a small portion of the Nishi property, and to argue that this makes the difference between habitability and inhabitability, I think, is questionable at best.

Dr. Tia Will pointed out to me that, despite more than 50 years of inhabitation at East Olive, there is no evidence of increased incidents of respiratory problems.

She wrote, “Based on the information provided by the county epidemiologist…. (t)here is no evidence of increased health care impacts along the I-80 corridor from Vacaville to West Sacramento. This would imply that the risk along this corridor is not increased over that of the other neighborhoods in Davis.”

Moreover, Dr. Thomas Cahill himself wrote to me that he is opposed to Nishi regardless of the air quality issues.  He wrote, “Air quality issues aside, the property is far too valuable for just student housing.”  Dr. Cahill had no problem with Lincoln40 and its nearly identical conditions and no problem with New Harmony, it was simply Nishi that he believes is problematic.

Aside from the air quality issue, the project opponents make some claims that deserve scrutiny.

First, “This project will increase traffic congestion on Old Davis Road and First Street to Richards, which is already bottlenecked many times daily.”

There is no traffic analysis here for them to point to.  This is sheer conjecture on their part.  There will be 700 parking spaces, but most of the traffic will not occur when those routes are congested.  Why?  Because the population that resides at Nishi will not drive to campus to attend classes.

As we have noted in the travel survey, of people living less than a mile from campus, less than 5 percent drive to campus.  Why drive and incur traffic impacts, parking fees, and other inconvenience when you are within biking and walking distance?

The numbers bear this out.

Second, they go after the affordable housing program.   Calling it “exclusionary, intended only for students, and to be implemented by the landlord.  This is contrary to the city’s long-standing affordable housing policies.”

This is an astonishing argument because the city’s long-standing affordable housing policies have excluded students.  Students are not eligible for affordable housing in the city.  Nishi along with Lincoln40 are two exceptions, so do the opponents really want to argue that we shouldn’t have affordable housing for students?

This would seem to be a self-defeating argument.

Finally, they rely on a minority opinion to determine: “The project design will saddle the city with more costs than revenues. That means the rest of the community will subsidize the financial shortfall of this project, imposing costs onto our community.”

We have discussed this in detail elsewhere, but, as I wrote recently, this is based on flawed and unrealistic assumptions on costs.

For instance, it is unlikely that an apartment complex with 2000 students would necessitate hiring additional police and fire, and yet the assumptions that show a net fiscal loss assume costs for police and fire which could only occur because of additional hires.

The key point I have made is that if Nishi ends up being a fiscal drain on the city, the city has a lot more problems than just Nishi.  That is not to discount the city’s fiscal challenges, but over time the Leland model on financing is far more concerned about unfunded infrastructure and retirement liabilities – none of which are really impacted by this development, even in the 15-year time horizon that we’ve analyzed.

—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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44 thoughts on “Analysis: A Glance at the Nishi Ballot Arguments”

  1. Howard P

    Am assuming both camps will also submit rebuttals to each other’s arguments.  Those will be interesting to see.  As you point out, each ‘argument’ has one or more ‘achilles heels’.

    1. Don Shor

      They didn’t stump me, Ron. I don’t engage with Matt on the Vanguard, and I found most of his comments pointless. There is little reason for you to continue directing people to that post.

      1. David Greenwald Post author

        I’ll respond to you as I did yesterday (without any response)… I’m not interested in getting in the middle of Matt and Dan’s pissing contest, which may in fact be uni-directional.

        My own perspective which I have offered you several times… There is too much debate over things like fair share and accounting for costs. To me the bottom line is looking at city finances at build out if Nishi is built versus not. My view based on my understanding of the numbers is if Nishi is built there will be slightly more money coming into the city than leaving and we will have slightly more money if Nishi is built than if Nishi is not built. Based on that I would call Nishi fiscally neutral. Finances should not be a reason that people vote for the project but also not be a reason to oppose.

        1. Ron

          David:

          It involved you, as well. Not just Don.

          Calling it a “pissing contest” is a disservice to anyone interested in the fiscal impacts of Nishi, or any other proposed development. (Not to mention the 700 parking spaces.)

          1. David Greenwald Post author

            You asked for why I didn’t respond, I gave you the answer. I don’t agree with Matt here, he’s entitled to his view.

        2. Howard P

          David… you question 15 year projections… as do I… too many variables to use them to base decisions today…

          Yet, if one looks at a 5 year projection as a ‘data point’, likewise a 10 and 15 projection, it may show a ‘trend-line’ (or, anomalies)… I like the idea of a “rolling” 5, 10, 15 year horizon… updated at least once every 2 years.  Cuts down on variables… better for decision making…

          Also, may cut down on some of the BS manipulations by some… maybe…

          1. David Greenwald Post author

            The problem I have with 15 years is after build out, I don’t think you’re assessing the impact of a development any longer. You’re assessing the costs to run a city. We’re not hiring more people as the result of Nishi, so assessing the fair share on the city is not really an accurate evaluation of cost for a development.

        3. Howard P

          Yes Ron, everyone should plainly see the close correlation between fiscal impacts and parking spaces… thou art a genius to tie the two.

          I defer to your obviously superior intellect….

        4. Ron

          Howard:  “Yes Ron, everyone can plainly see the close correlation between fiscal impacts and parking spaces… thou art a genius to tie the two.”

          I did not make any such correlation.  .

        5. Howard P

          a disservice to anyone interested in the fiscal impacts of Nishi, or any other proposed development. (Not to mention the 700 parking spaces.)

          My bad, no linkage there.  I sincerely apologize.

          I did not make any such correlation.  Suggest you read more carefully, before making comments.

        6. Howard P

          Agree in part, David, but I still think 15 years is a data point…  a lot of Davis came into existence within 25 years… 15 years is where you begin to see maintenance implications… will not argue that point further…

          I see your point, you apparently cannot see mine… OK.

  2. Ron

    David:  “I don’t agree with Matt here, he’s entitled to his view.”

    Which happens to correspond closely, with the “view” of an external analysis firm (EPS), and which isn’t being used for the latest version of Nishi.

    Kind of reminds me of your “view”, regarding an expert’s recommendation to conduct an air quality study, on-site. And, your “view” of the accepted standards already in place, regarding air quality. (Which likely weren’t created on a blog.)

    They must all just be a bunch of no-growthers, in your “view”.

      1. Ron

        EPS allocated costs (for Nishi 1.0) in a manner that’s similar to what Matt and Ray recommend for Nishi 2.0. This is all discussed within the comments for the article, below. (And, which you’re still avoiding.)

         

        1. David Greenwald Post author

          You’re comparing two separate projects. I’ve explained my thinking on the economic analysis, you’ve chosen not to respond to it and instead post links to others thinking (which I’ve already read).

        2. Ron

          Suggest that you respond to comments already made, rather than re-engaging, here.

          There’s no sense in engaging in repetitive arguments, which weren’t responded to the first time.

          [Moderator: link removed. Stop doing this.]

          1. David Greenwald Post author

            I have directed Don to remove further links to that article, it may harm this site and I’m not willing to take that risk.

        3. Ron

          David:  You’re deleting more than links, as I’ve already addressed this comment, below:

          “You’re comparing two separate projects. I’ve explained my thinking on the economic analysis, you’ve chosen not to respond to it and instead post links to others thinking (which I’ve already read).”

          Again, we’re referring to proper allocation of costs for ANY proposal, including Nishi 1.0, 2.0, etc.  Note that Ray’s analysis includes WDAAC.

          [link removed]

          1. David Greenwald Post author

            Nothing other than links has been deleted.

            Like I said before, the costs exist prior to the project. Allocating existing costs is not really a demonstration of fiscal impact of a project therefore you’re actually distorting the real fiscal impact on the city by engaging in that form of analysis.

  3. David Greenwald

    A lot of time spent on here arguing over a pretty minor point which is the fiscal impact of this project which I believe to be negligible in real money rather than accounting and cost allocation assessments.

    the bigger issues are: student housing needs, affordable housing program, air quality, and things we have rarely touched like energy efficiency and sustainability.

  4. Tia Will

    Although I feel it is unlikely that I will hear anything that will change my feelings about the project, I would like to hear more about energy efficiency and sustainability. Anything planned on those topics ?

  5. Ron

    David:  “A lot of time spent on here arguing over a pretty minor point which is the fiscal impact of this project which I believe to be negligible in real money rather than accounting and cost allocation assessments.”

    Wow.  Just wow. Coming from someone who (otherwise) spends a great deal of time discussing city deficits.

    Again, this impacts all fiscal analyses regarding development proposals, not just Nishi 2.0.  (At least, those proposals that are actually studied. Most, such as Lincoln40, are not.)

    1. Ron

      And, I wouldn’t refer to a $5.6 million projected city deficit for Nishi (by year 15) as a “minor point”, or somehow “fake”.

      The following is a link to the analysis from a finance and budget commissioner, which shows this deficit.  Hopefully, the Vanguard won’t delete this.

      http://documents.cityofdavis.org/Media/Default/Documents/PDF/CityCouncil/Finance-And-Budget-Commission/Agendas/20180312/07C-Solomon-Updated-Fiscal-Models.pdf

       

       

      1. David Greenwald

        His analysis is flawed because he’s allocating costs that exist independent of Nishi onto the project.  In terms of actual costs to the city, what we are talking about is a negligible positive or negative depending on how you draw up your assumptions, therefore this is a fiscally neutral project and I call it a minor issue.

        1. Ron

          You’re presenting no evidence whatsoever, to back up your statement. This analysis has already undergone some revisions, based upon input from the full commission and staff.

          Regardless of what you think of it, I’d suggest that the Vanguard is (once again) purposefully downplaying actual concerns regarding a proposed development.

        2. David Greenwald

          All you have to do is read your own link to Solomon’s analysis to see what he did regarding cost allocations of existing costs to this project.

        3. Ron

          And again, if you want to see more discussion regarding this, it can be found in the recent article regarding arguments “For, and Against Nishi”.  (I realize that you won’t allow the link to your own article for some reason, here.)

          1. Don Shor

            You are just repeatedly asserting a minority viewpoint that did not receive the support of the full Finance and Budget Commission. You have literally cited that study almost a hundred times on the Vanguard. It isn’t what the F&B Commission concluded. They disagree with the analysis. David has provided you with description of why he, the city staff, and the F&B Commission disagree with it, and you just keep circling back to it.

            We also generally concur with the estimate that annual ongoing revenues and costs for the city from the project would be modestly net positive over time.

        4. Ron

          David:  “All you have to do is read your own link to Solomon’s analysis to see what he did regarding cost allocations of existing costs to this project.”

          Again, a general statement without any backup.

          Regardless of what you think of this method of cost allocation (recommended by Matt, Ray, and EPS), it seems worthy of a more complete discussion (rather than quick responses to me, alone).

          That is, unless it’s something you’d prefer to bury.

          1. David Greenwald Post author

            That discussion will come between me and Matt, not me and you. I’m reluctant to expend more time on this with you, because you don’t reciprocate. In fact, your entire argument can be summed up in two links from other people’s work. I find it extremely I ironic that you call for mor backup when you steadfastly refuse to do your own heavy-lifting.

        5. Ron

          You didn’t even respond to Matt in the other article.

          I would think that some might appreciate at least knowing about the analysis and concerns brought up by other commissioners, which closely corresponds to the methods used by EPS.

          If one were to rely upon the Vanguard to bring it up, it would never even see the light of day.

          You’re welcome.

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