My View: Inventory of Commercial Sites Illustrates the Need For Peripheral Innovation Center

Mace Ranch Innovation Center
Original MRIC Plan

The quote from the 2010 Studio 30 report is telling: “The current isolated and dispersed sites that are available and appropriately zoned are not adequate in terms of size, location, or configuration (and related constraints) to address the emerging market need of an Innovation Center.”

A current view of the city’s inventory of sites shows that the problem is even worse than many might have imagined.

City staff identified 124 acres of private vacant commercial land in the city.  But that’s actually misleading in itself.  When it comes down to it there are basically three large areas within the city that are vacant.

You have the area north of Sutter-Davis along John Jones at 27 acres.  You have five parcels along Second St which are about 24 acres.  And then you have a single parcel at Cowell and Chiles which is nearly 15 acres.

Of those, the one on John Jones is reserved for hospital expansion.  The one on Second St is the Frontier Fertilizer sites and thus unlikely to support new development.  And only the one on Chiles is really available.  That was the location where there was a proposed R&D park for a time, but there are concerns that the location is too far from freeway access and the site itself at 15 acres is too small for an actual campus.

That is the problem – take out those sites and there is just 60 acres or so of vacant commercial land in the city.  Just four of the remaining sites are even 6 acres.  Of those, one will become Plaza 2555 while the other will become the URP Mixed-use project.

The best options for high tech commercial development appear to be near Sierra Energy’s project west of Richards, a vacant spot on URP, and some of the spots along Second St.  But the numbers are few and far between and dwindling.

There are still some possibilities as Sierra Energy expands, as University Research Park could densify and the city could densify in the core.  But if we are looking at a need for an innovation park campus that has the space requirements and access to the freeway, we really are looking at MRIC as being the best location for sizable development.

The demand for commercial development is very different from the demand for housing.  It is not simply a matter of making land available.  We need to have infrastructure in place so that a location is shovel ready because a commercial entity does not want to have to wait five years for an approval process, vote, and build out – they want to hit the ground running and get their business up and running as soon as possible.

It is not even a matter of build it and they will come.  In many cases, what we have to do is recruit important companies and at times that means compete with other locations.  For instance, Mori Seiki is a perfect example, we were fortunate to have appropriately zoned land in Davis, we had our selling points, but we had to win a recruiting battle against the Chicago Area to get the company to come to Davis.

Davis has some disadvantages in this process.  Land in Davis is expensive.  Development fees in Davis are higher than other areas.  There is a longer process, particularly if there requires a vote and it is less predictable than other comparable communities.  And there is the potential for litigation at the end of the approval process.

Nevertheless, as Barry Broome made clear in his presentation in November, Davis does offer a lot to prospective companies – moving research at the university to the lab and finally to the market is facilitated by the close proximity to the university.  Davis has a brand name and a competitive edge in a number of fields.

What this inventory illustrates is that one barrier to expanding our economic development is the availability of appropriate land – there just isn’t much vacant land that is available for commercial development.  That is why in 2010, the Studio 30 report recommended that Davis develop the close in Nishi – which has largely been substituted by Area 52 and the University Research Park – and a 200 acre peripheral innovation center which can serve larger companies and also startups.

What we now know is that the sites are even more limited than perhaps we really understood with 17 of the 27 sites less than 2.5 acres and most of the large sites infeasible for this type of development.

The clear next step is for us to expand our inventory with a peripheral park.  While 200 acres seems like a huge addition – and it is since it’s actually more than 50 percent larger than the totality of all available land in the city – we need to keep in mind that we are looking at a 30 to 50 year build out.

That means once we approve this site, we are not going to need another expansion in the foreseeable future.  Residents can look at this really as a one-time deal.

—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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29 thoughts on “My View: Inventory of Commercial Sites Illustrates the Need For Peripheral Innovation Center”

  1. Todd Edelman

    The importance of freeway access in a City that prioritizes active transportation. A mono-use sprawl with no planned robust public transport access. A congestion inducing thing, where  anyone eastbound will rarely visit Downtown after work. No fundamental way to contribute positively to the City’s goals for bicycle modal share.
     
    The City of Davis should join the lawsuit against PG&E, with any positive ruling used as leverage to make these energy creeps move their regionally-focused facility to the periphery, because actually most of those things which are bad for an innovation center are adequate for it.
     
    Alternatively, making this site into a “new village” – i.e. a mixed-use development – is not about some magic process that will have everyone who lives here also working here. What it’s about is having the massive infrastructure needed for this development to be shared by people and different entities all day long, and all week long. This would mean that it would make sense to run buses most of the day, all of the week and all of the year, and better yet a new train station stop – for a regional service that stops here in addition to West Sacramento and Dixon and the current stations – can be justified because it would be used all day long. This new service is a natural part of any evolution of Capitol Corridor, and there’s already a study in progress for a local train along most of the route I mention – and a logical further enhancement is that it would use a tram-train type vehicle, a not uncommon solution in Europe which runs on main train tracks like a heavy rail vehicle and on local tracks in a town as a light-rail vehicle.  At this site it would run the periphery, and it would also use light rail infrastructure in West Sac. It could conceivably also run directly from Sacramento Valley station to RT’s network in Sacramento.

    1. David Greenwald Post author

      “The importance of freeway access in a City that prioritizes active transportation.”

      The importance is less to do with people working there and more to do with deliveries, commerce, etc.

      1. Todd Edelman

        But as part of external sprawl and with internal sprawl and “free” parking the freeway access will be the main one, by far, unless there are extremely robust measures taken… because even the best transport solutions cannot address bad development very well. And by the way – to be clear – I never suggested that there would be a lack of freeway access. Commercial journeys as you mention would instead be routed along 2nd St. from Mace all the way to a re-development of the PG&E yard without impacting the street grid, but also anyone who lives or works there would be minutes away by bike or foot from Davis Depot.

        1. David Greenwald Post author

          That’s true to some extent, but as the map attests, there is not that much left on 2nd St, particularly if the Frontier site is not operational

        2. Todd Edelman

          Well, my focus is 2nd to 5th along L and so on, the PG&E space, not 2nd St., though probably stuff would organically fill in here with a huge development there….
           

          1. Don Shor

            Something like 200 employees work at or from the PG&E corporation yard. So moving the facility to a peripheral location, desirable as it would be for economic development purposes, would need to factor that into the transportation equation.

        3. Craig Ross

          I used to laugh at people that argued for redevelopment of the corp yard, but given PG&E’s problems and likelihood of being broken up, it becomes a distinct possibility.   What that corp yard would become is an interesting question and it’s not clear that answer is R&D rather than housing.

        4. Matt Williams

          With respect to Don’s point about the 200 employees, it is my understanding (but not knowledge) that the vast majority of those 200 employees are out in the field (which covers most of the northern half of California) working on remote site issues most of the time.  Those employees essentially commute to the 2nd Street site and then board the PG&E vehicle and depart for the remote location where the technical issue/challenge/problem exists.  They frequently spend the night (often for multiple nights) at a motel proximate to the location of the technical issue/challenge/problem.  They then return to 2nd Street at either the end of dealing with the technical issue/challenge/problem, or periodically if the technical issue/challenge/problem is one that takes multiple weeks to address/fix.

          The reason that is important is that the location of the “yard” on 2nd Street is really not either strategic or tactical.  It is more an accident of history.

          With all the above said, there is physical PG&E infrastructure located on a portion of the 2nd Street site that is not realistically movable.  The natural gas piping station on the southwest corner of the parcel, where L Street and 2nd Street meet, is one such massing of permanent infrastructure that would remain if the transportation yard moved away.

  2. Rik Keller

    Greenwald: you should at least do a little research and critical thinking before you jump into full campaign mode. 

    “In fact, as I shall argue, the contribution of university-based technology transfer to local economic development has been wildly exaggerated. Although it has become almost a cliché for entrepreneurial universities and regional leaders to boast of becoming “the next Silicon Valley,” a systematic review of the historical record reveals that the celebrated success stories of university-led economic development are more the exception than the rule. Far more typically, the commercialization of academic research and investments in university technology transfer have had little discernible impact in reshaping the economic trajectory of cities or regions. Nor, for most universities, have university-generated patents and licenses produced the internal returns envisioned by proponents of academic commercialism. In the last analysis, the case for the entrepreneurial university as a “game changer” or “driver” of local economic development is more chimerical than compelling.”

    https://uwm.edu/ced/wp-content/uploads/sites/431/2018/11/entrepreneurial_univ09.pdf

    1. Craig Ross

      One of the questions in this “debate” has been whether the city has enough existing space to expand its economic development.  The answer now is a clear no – no real surprise, but there can really be no dispute.  You’ve now jumped ahead to the next question and argued that R&D development won’t work in Davis.  I don’t know that we can know prior to the fact anyway, so if you’re argument is we shouldn’t try because you don’t know if it will work, you lose me.

      1. Don Shor

        If we want another company the size of  Mori Seiki to locate in Davis, with the jobs and revenues that it provides, we don’t have the space left. We don’t really know why they chose to locate here. Perhaps just the ambience of a university town attracted them, or the proximity to the Bay Area. Or the climate. Who knows?

        I am dubious about significant amounts of university-related businesses developing locally, but it certainly won’t happen if there is no land available of sufficient size. I personally call MRIC a business park rather than an ‘innovation park’ because I consider the latter term to basically just be marketing. But in the absence of sufficient land for a cluster of businesses and the supporting retail and hotel(s) that make that prosper, we won’t get more city revenues and we’ll continue to have a significant structural fiscal shortfall in our budget.

         

        1. David Greenwald Post author

          I partly agree that the term “innovation” park, center, district is a bit of marketing, but it also distinguishes itself from a low-tech park. Brookings defines Innovation Districts: ” dense enclaves that merge the innovation and employment potential of research-oriented anchor institutions, high-growth firms, and tech and creative start-ups in well-designed, amenity-rich residential and commercial environments.” The key is the merging of university research with private sector efforts. The bottom line though that I agree with you on and disagree with Rik on is that without having available land we will fail – whether we succeed or not with that land, we won’t without it. This inventory demonstrates rather conclusively that we just don’t have the available space for much in the way of commercial development.

        2. Rik Keller

          Greenwald: you are not disagreeing with me; you are disagreeing with the reality of the lack of success of the type of development you are pushing and with the experts you study them. 
          One wonders why you don’t act like an actual community watchdog journalist and report on the reality, not the empty promises.

          1. David Greenwald Post author

            And the reality is we have effectively no commercial land that is vacant to do anything. And the other reality is apparently you believe we don’t need to do anything because there is no prospect for success. That makes for a rather short conversation.

        3. Rik Keller

          Greenwald: stick to the topic. Discuss what the foremost expert in the field who did a comprehensive national study says about these sorts of “innovation” centers. 
           

    1. David Greenwald Post author

      The Innovation Park concept came out of the Innovation Park Task Force and the Studio 30 report 2010-2012, long before Barry Broome ever came to the region.

  3. Don Shor

    As the work of Glaeser, Goldstein, and others have shown, the local stock of human capital –educated residents—is, by far, the best predictor of local economic development success (e.g. income or employment growth) – much more important than levels of university patents or even research funding. It logically follows, therefore, that expanding access to higher education and improving learning are the truly crucial ways in which universities contribute to local economic growth.

    Thus, when universities like UWM increase the tuition burden on students and slash core areas of research and teaching, while simultaneously investing in what Irwin Feller calls “niche technology areas” in the name of entrepreneurialism, they are, in fact, undercutting the university’s central contribution to economic development. William G. Bowen and collaborators’ important recent study calls attention to the distressingly low (less than 60 percent) graduate rates at U.S. flagship public universities (Bowen, Chingos, and McPherson, 2009); strategies to raise this rate would do much more to promote local economic growth than the standard arsenal of academic commercialism.

    In Milwaukee, the UWM six-year graduation rate rests at only 48 percent, and although the majority of UWM graduates remain in the region, the urban core has experienced a significant net out-migration of college-educated residents in recent years, the vast majority moving from the central city to outlying suburbs …..

     In Milwaukee and in troubled cities across the country, universities need to be part of a comprehensive strategy to generate, attract, and retain human capital in the city; generating talent, not patents and licenses, is how universities most effectively contribute to local economic development.

    Universities also contribute mightily to local economies as investors, employers, and real-estate developers, and as institutions engaged in community problem-solving. In recent years, urban institutions such as Penn and Yale have led the way in using university investments to bolster local economic development, through such programs as purchasing preferences for local, minority-owned businesses and joint university-city development projects in troubled neighborhoods (Rodin, 2007).

     

    Excerpted from pp 94 -6

    The False Promise of the Entrepreneurial University Selling Academic Commercialism as an “Engine” of  Economic Development in Milwaukee by: Marc V. Levine University of WisconsinMilwaukee Center for Economic Development Working Paper September 2009

     

    https://uwm.edu/ced/wp-content/uploads/sites/431/2018/11/entrepreneurial_univ09.pdf

     

    1. David Greenwald Post author

      What is interesting is Rik cites Marc Levine in an article from 2009 (yes a decade ago). I was looking to see how influential Levine’s thinking was in the field, and found this article – it takes aim at East Carolina and Greenville – what I find interesting is not only did they get serious pushback from Greenville, but of course we know something about Greenville and its success because of the work of Joe Minicozzi who spoke here five years ago. In addition, you have the work from the Brookings Institue also from 2014, that cites numerous successful Innovation Districts across the country – including the one in Atlanta that Gary May played a role in. I’m certainly open to reading more – but what I’ve seen here is not evidence that what Davis is considering is a bad idea especially in light of the complete lack of available land for commercial space in the city. Worse case scenario is that you have 200 acres surrounded by land in conservation easement that doesn’t get built?

      1. Rik Keller

        Greenwald: no one is saying that universities don’t help contribute to economic growth. The point is that decades of “innovation centers” have a very poor record of producing economic development. The question remains: in light of this overwhelming evidence, why are you pushing them? And why aren’t you discussing failures like the UWM example?

      2. Matt Williams

        Greenville is also illuminated by James and Deborah Fallows in their excellent book “Our Towns”  Anyone who wants to can read more HERE.

        In the economic-development world, this part of a still-generally poor state is renowned for how thoroughly it has made the transition from a textile-based economy, which was still viable even 20 years ago, to become the center of one of the country’s most successful advanced-manufacturing clusters. Its most famous facility is the BMW auto works, which continues to expand and which ships most of its output to markets overseas. Michelin is also here, and a GE division, and the successful electric-bus company Proterra. The industrial turnaround of this area has become a familiar story — about which we heard some quite unexpected angles, as we will describe. 
        The bigger surprise is all the aspects of civic life other than major factories that have evolved here. These range from public art, to environmental and public-spaces initiatives, to a revitalized downtown that urban-planning teams from around the world visit to study, to an in-town minor league baseball stadium, to educational innovations we have not seen in other places and had not anticipated here.

        1. Rik Keller

          Greenwald: you are desperately trying to cherry-pick on the fly selective quotes from the study I cited. You should not have to learn about major literature on the topic from me. You are doing the community a tremendous disservice by not doing your homework and by campaigning for a project without basic familiarity with the relevant literature and studies. 
          This is not community watchdog journalism. This is credulous boosterism.
           

  4. Jim Frame

    Universities also contribute mightily to local economies as investors, employers, and real-estate developers, and as institutions engaged in community problem-solving.

    With regard to real estate, it’s worth noting that universities don’t pay property taxes, so any land that they own and use in serving their core mission comes off the tax rolls.

    1. Matt Williams

      Jim, that is true, but also can be dealt with in the terms of a Development Agreement.  The FBC and the Nishi developers agreed on an annual “Make Whole”payment of $93,000 per year.  Council incorporated those “Make Whole” provisions in the Development Agreement (which never was executed because of the failure of the June 2016 Measure R vote.  Similar “Make Whole” provisions are included in the Nishi 2018 Development Agreement.

  5. Don Shor

    The likeliest scenario, based on the discussion a couple of years ago, is that Schilling Robotics moves to the MRIC site. That would free up their property on Cousteau Place, which is right next to the UC Center for Mind and Brain. Hopefully a private business would choose to locate there, though it’s certainly possible that UC would seek to expand on that site. At MRIC, there are plans for a hotel, a conference center, and there would be a retail component and likely at least one restaurant. And there would be room for other businesses. Whether those are ‘startups’ or associated with research spun off from UC is anyone’s guess.

    In any event, space would be created along 2nd Street and at MRIC for any kind of business that needs it. We can’t predict or control exactly what locates where except for the general parameters of zoning. But all of what I’m describing would yield higher revenues for the city, make some job opportunities for that “local stock of educated residents” and perhaps get some of those UC graduates to stick around. 

    There is no cogent argument against any of this that I’ve heard. It’s not growth-inducing, because the MRIC site is basically landlocked with respect to development. It makes more money for the city than it costs in services. So I just don’t get all the negative commentary about it. Call it a business park if the “innovation park” idea rankles you somehow. 

    I’ve now read some essays and blog posts by the expert cited by Rik and by myself above. It’s difficult to discern what he thinks actually works in the realm of economic development. He opposes public financing of business parks and arenas and such. Well, that’s not being proposed here, so it’s largely irrelevant. If he has some positive contribution to the process of economic development and practical suggestions, I didn’t find them. But some of his research is behind paywalls.

     

     

  6. Jim Wallis

    Hi, Guys:
    I guess you only really need a business park if you want businesses to locate in Davis.  When I started my biotech firm I put it in Woodland because there wasn’t any decent space in Davis.  Well, that plus the fact that rent was half as much in Woodland.  At my next expansion I’ll probably go to the proposed Woodland Research Park.  If that doesn’t get built then perhaps to Dixon.  It would be nice to have an option in Davis so my people don’t have to drive so far, but none of the existing spaces that Mr. Greenwald mentions are very attractive to me.  So, sure, go ahead and build the MRIC if that can be done. 

    It’s certainly true that Universities aren’t nearly as good at creating businesses as they imagine themselves to be, but that doesn’t mean there aren’t lots of businesses looking for space.  Space is especially tight right now.  New space is expensive, and the government stuff takes forever. More available space makes things easier.  I literally can’t build fast enough for my needs so I’ll go to a different town if the space is there. 

    I like the MRIC drawing.  Having it at a freeway exit is perfect since most employees would come from out of town.  The sailplane is a plus.  Owners like to locate businesses in Davis because it’s a great bedroom community, and the location is seen as validating to investors.  Plus if it gets built it will help hold down prices in Woodland! 

    – Jim

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