My View: Shenanigans or Not, We Need Workforce Housing *AND* R&D Development

I get that it is disconcerting to be called out by your councilmember, especially when it’s the affable and mild-mannered Will Arnold, but Councilmember Arnold got it right on Chiles Road Apartments – and people need to understand the difference between freeway commercial (convenience stores and gas stations) and R&D and recognize that it is possible to have more than one need at the same time and that government must balance priorities.

The background of Councilmember Arnold’s comment was an email to council that complained that “some seem to be claiming that there’s a ‘shortage’ of available commercial space” while at the same time “advocating for conversion of existing commercial space to accommodate residential development.”

They argue: “If there is an actual shortage of commercial space, then the proposed conversion of the Chiles Road site (from commercial to residential zoning) is difficult to logically explain.”

They then warn that “this latest missed opportunity is surely something I’ll remember, if/when the MRIC proposal arises again.”

I have a lot of problems with this viewpoint, but for Will Arnold’s purpose, as he explained in an email:

“I stand by my assertion that any comparison between the site we approved for housing last night, and a proposal that may come forward for an innovation center, must consider a number of critical factors, including size, location, and allowable commercial uses. Thus, any suggestion that, by converting one from commercial to residential, we must not really need any more commercial space elsewhere, I believe to be either greatly mistaken or disingenuous.”

Back in December, the Vanguard addressed this issue, as Economic & Planning Systems Consulting analyzed the fiscal viability of the 3820 Chiles Road Project and found that it was not viable for the type of R&D development that Mace Ranch would provide.

Basically, EPS concluded that the site was isolated and small.  What is more is that their theoretical research is backed up by observations from the developer.  Unlike other locations which have given lipservice to commercial development – like, say, Cannery – Lawrence Shepard, later assisted by Chuck Cunningham, both attempted over the period of years to find a viable commercial suitor.

Ultimately they enlisted the city through Diane Parro and Greater Sacramento’s Barry Broome, and were unsuccessful.

What the developer here found is that most commercial interests are simply not interested in developing a five- to seven-acre site for R&D.

EPS instead found that “R&D and office tenants prefer to co-locate with similar uses and with service providers in a ‘campus’ environment.”

If that is the case, where exactly is the contradiction?  That a small site is not viable for R&D does not mean that we do not need R&D.

The second point is on the shortage of commercial space.  The city went through this process back in January.  The finding at that time was there were 124.5 acres of vacant commercially zoned land.

But our analysis from January immediately begins to lower that number.  We conclude, once we take non-viable properties off the table and consider ownership intentions as well as the impact of the Frontier Fertilizer site, immediately 73 of the 124 acres are completely eliminated from consideration – for at least 10 and probably 20 years.

Based on that analysis, there is perhaps one nearly 10-acre site along Second Street that is potentially viable and available.  Everything else is either reserved for other uses, or very small and fragmented.

In short, whether we could develop the seven-acre site at Chiles or not, we just do not have a lot of available commercially zoned land.

EPS did estimate that “the City has an approximately 43 to 63 (year) supply of vacant land for future office and R&D/Flex Development.”

But even that has some questionable assumptions.  First is that all of that now 125 acres is viable, which it isn’t, and they are also assuming only adding 39,000 feet annually, or 2.2 to 3.7 acres a year.  That might be true with current R&D build out rates, but if the city wishes to really expand their economic development, we are going to find that the few sites scattered around town will fill up pretty quickly.

There is a third and perhaps more basic problem with the criticism – the implicit assumption that we only have one need.  The reality is that this community has many needs, the council has the job of balancing those needs, and sometimes that involves trade-offs.

This gets back to Will Arnold’s point that size and location are important considerations, that these decisions are not made in a  vacuum and that council must consider what the best use of any given property is – irrespective of the array of community-based needs.

In this case, we need R&D space, but we also need housing for the employees of R&D companies to live in.

We can hearken back to our conversation with Jim Gray and Dave Nystrom on the University Research Park mixed-use proposal for workforce housing.

As Mr. Nystrom explained, “one of the challenges (businesses in the park) face is hiring people because it’s so difficult to find housing in Davis. People I think have an expectation that if they’re going to work in Davis, they’re going to live in Dixon or Woodland or West Sacramento because the housing market is just so tight.”

Chuck Cunningham sees his project as helping the economic development needs of the community, as well.

“It’s not designated tech or R&D,” he said.  “But the property does have an important role in the city’s economic development plans.  We suffer from adequate housing for our Davis workforce.”

Mr. Cunningham stated, “While it’s a housing project, it is a component for the economic development goals for the city.”  He said, “It meets an unmet need in the city.”

Finally, a small but important point.  The Chiles Road site is about seven acres.  Mace Ranch Innovation Center would be about 200 acres.  Just because we believe that Chiles is better suited for housing does not negate the need for R&D.

In conclusion, whether you believe the claim is shenanigans or not, there can be no argument that we need R&D space.  The amount of available space in the city is much smaller than I think many people realized, and this particular property is not well-suited for R&D development.  Regardless, we need workforce housing and the conversion of this property which is seven acres to housing has no bearing on whether we need a 200-acre R&D property.

At this point we don’t know when the MRIC proposal will come forward – our expectation is that if it does, it will be R&D only, without housing, but we will see.

—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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  1. Ron Oertel

    This will be the first time I’ve logged in, since the Vanguard changed its policy.  I am not planning to engage here on a regular basis.  (I’m periodically posting on the “other” blog).  However, since David intercepted the email from Will to me, I’ll respond.

    One thing that David does not seem to be accounting for is the distinct possibility that MRIC will not be approved by voters (assuming it’s even proposed again), despite his near-constant advocacy.  Counting on such approval, while simultaneously changing existing commercial sites for residential usage is essentially “counting one’s chickens (and eating your young)”, before the new ones are hatched.  This doesn’t seem like a wise decision, to say the least.

    There’s also a strong incentive for peripheral site developers and businesses to work in conjunction, to claim that a 7-acre site is too small, and that a much larger, peripheral site (with housing) is “needed”.  There’s also an incentive for the developer to propose a “sweetheart deal” to land a business – especially if that business claims that housing is needed to make it “work” for them.  (Housing appears to be the “real” goal, for developers.)  Such an arrangement might work for one or two businesses, to “demonstrate” that there’s market demand.  However, it is unlikely to be feasible for the entire (200-acre?) site.

    Also, there is no reason that an existing, 7-acre site can’t accommodate both housing AND commercial development, via mixed-use.  I believe that such examples already exist.  However, that assumes that there’s actual demand for commercial development, rather than housing.  (All evidence suggests that commercial demand is actually quite weak, especially when compared to the profit from building housing.) The same thing applies regarding the Families First site, which was also converted to housing.

    Again, it’s unlikely that a single R&D business would occupy an entire, 200-acre site.

    A peripheral, freeway-oriented development does not seem to correspond with the city’s new “goal” of addressing global warming.  Especially since residents and workers would likely be commuting in BOTH directions – to the site, and from the site to locations such as Sacramento.

    1. Craig Ross

      See and you lived to tell.

      Now in terms of your comments, I disagree with a lot here.  I think the key point is that the business tried – and they didn’t just give it the old college effort – they spent years trying to get businesses, it wasn’t the right location.  It does not appear to be from lack of effort.

      The EPS analysis suggests the need for connectivity as essential for R&D development.  That’s what MRIC would bring that the current site doesn’t.

      1. Ron Oertel

        Craig:  Where does the EPS analysis state that “connectivity” is essential for R&D development?  And, how are they defining such connectivity?

        And, why hasn’t that “connectivity” been appealing enough, regarding the 2-3 other peripheral “innovation center” sites which have also been converted to housing?

        Also, why is EPS stating that there’s 40-65 years of commercial sites left in the city (as I recall), even when not including the Chiles Road site?

        1. Craig Ross

          They didn’t use the term connectivity, but they did write: “R&D and office tenants prefer to co-locate with similar uses and with service providers in a “campus” environment.”

          As David explains, EPS is look at all properties without determining viability and projecting past build out rates into the future.

        2. Ron Oertel

          Well, if David is going to attack EPS’ conclusions regarding the 40-65 year supply of available commercial sites, perhaps he should also question what David himself described as “theoretical research” (regarding connectivity), in his article above.

          Also, perhaps he could explain why 2-3 other innovation sites have failed, as well as the reason that these developments haven’t been built a few miles up the road (in any direction) – where developers have much greater influence over local development decisions.

          But first, perhaps David could explain why he’s intercepting emails from a council member to me, and building articles around them – even as some other council members expressed concerns that were similar to mine.  (In that same email, Will did apologize to me.)

          Getting back to the point (regarding lack of market demand for commercial development), here’s an article regarding the challenges of obtaining capital, for biotech companies:


        3. Craig Ross

          The first issue is how much space is available.  If you read the EPS report, they simply take the city staff report for the number – there is no deep dive there.  So refining that number seems reasonable – no?

          The second issue is how much build out there will be.  I think if the city stays on the same trajectory, your probably right, we don’t need more commercial property.  But is that really the goal?  Bottom line is if we are going to actually do economic development, we need more land. If we’re not, it doesn’t matter how much land we have.

          So ironically, both our positions are reasonable.  You just have to acknowledge that for your position, we’re not going to attempt to do more in the way of economic development.

    1. Ron Oertel

      And – wouldn’t you know it – it’s also not “connected” within a “campus environment”. (Unless you want to count a nearby church and a gas station as consisting of a campus.)

      1. Craig Ross

        You’ve hit on a problem here inadvertantly.  Too large and not large enough at the same time.  There are different uses.  Those uses have different needs.  But guess what – Nugget isn’t R&D.  It’s a corporate headquarters for a LOCAL grocery store chain.

        1. Ron Oertel

          You might want to read what’s in the link I provided, above:

          “This proposal anticipates returning the site’s main use back to the original intent of office with a business park designation. A “Business Park” is a hybrid of industrial and office parks, which contains multiple uses and activities to include: office, light industry, research & development and light manufacturing.” 

          The proposed site plan includes the subdivision of the site into three (3) parcels with one (1) building per parcel.  Parcel 1 (2.97ac) contains building A (32,220 sf office use), Parcel 2 (1.52ac) contains Building B (16,200 sf) and Parcel 3 (1.51) contains Building C (16,200 sf) for a total of 64,620 sf.  Building A is a highly-articulated pre-engineered metal building shell intended to reference a rural/agricultural theme. Buildings B and C are tilt-concrete structures, intended to accommodate a flexible office, R&D tenant mix as well as a maximum of 2,000 sf of retail.

          By the way, isn’t this usually the point at which you start noting the number of times I respond, while continuing to challenge me? (Of course, you’re not getting much help from other development activists today, so far. Including David – after apparently intercepting an email to me – and building an entire article around it.)

          All the more reason why I’ve enjoyed the break from this blog. (You know, even you would be treated with more respect on the “other” blog.)

        2. Ron Oertel

          What difference does that make, in reference to the link I posted?  It’s from the city’s own website.

          It’s an example of something that conflicts with everything you and David have claimed, and it’s right across the street from the proposed MRIC. (For that matter, it doesn’t even include housing.)

  2. Alan Miller

    intercepting an email

    So, did DG intercept an email from the affable and mild mannered Will Arnold to the rarely-if-ever-going-to-post-on-the-Vangaurd-again Ron Oertel?

    Enquiring minds want to know.

  3. Rik Keller

    What sort of shenanigans lead to The Vanguard’s publishing the contents of private emails?

    And why has The Vanguard ignored other actual recent R&D/office developments in Davis on similar sized property, saying that the Chiles Road site is not large enough, so we shouldn’t worry about the rezoning.

    One thing I do know: expect to see MRIC campaign ads and more campaigning from The Vanguard on their behalf in the future.

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