Commentary: Does Mace Mean We Should Forget about MRIC?

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The sun rises over the land that could become the Mace Ranch Innovation Center

The traffic concerns that have emerged along Mace – whether part of the overall traffic problems along the I-80 corridor or generated by structural changes along the southern part of Mace – have led some people (probably already inclined to oppose an innovation center) to speculate that any thought of a Mace Ranch Innovation Center should be shelved due to the traffic problems.

Given what we know about Davis politics, the traffic problems along Mace Boulevard, whatever their cause, are a cause for concern and will impact the likelihood of a successful Measure R vote.

One needs to look no further than the vote in 2016 on Nishi, where concerns about traffic along Richards Boulevard, even with a viable plan to mitigate those traffic concerns, led in part to the narrow defeat of the project at that time.  Going back further, one can see that traffic concerns at Pole Line and Covell were among the chief causes of the large defeat for Covell Village in 2005.

Does that mean that we should forget about MRIC?  If only it were that easy.  As I will argue here, we really can’t forget about MRIC – and that behooves us to address the current traffic situation on Mace, as well as address future impacts.

The first problem here is that the city is in grave need of new revenue sources.  A bit of irony here is that one of the reasons the city has sought out grant funding like the funding for this roadway is that we simply lack the funds to be able to afford to maintain our roads.  While I believe that the main factor here is external to the city, the extent to which Mace Blvd.’s re-design is contributing to this problem is emblematic of a city that lacks revenue sources.

We could walk through a variety of statistics from the infrastructure needs and funding gap to the lack of per capita sales tax revenue and come to the conclusion that the city needs economic development as a key additional means for revenue generation.

The second problem, as we have analyzed here, is that the city has limited available commercial space – and once we analyze those 100 to 140 acres of nominally available space, the functional amount of space in the near term shrinks to less than 50 acres.

Of course if we intend to continue with business as usual, that might be enough to last us a few decades, but if our intent is to expand our economic development to build a new revenue base, we need more space.

Third and finally, there just are not alternative locations for an innovation center at this time.  Some will point out that there was a proposal for an innovation center along Highway 113.  That is true, but the developers for that site have since taken their project to Woodland, a few miles up the road.

Going beyond that, it is not clear where you would even locate an innovation center, given the constraints of land ownership, the realities of land use policies in Davis, and the need for locating the center along transit lines and near major highways.

Is there a realistic alternative to the MRIC site at this point?  It is something that the council is clearly going to need to consider, for a whole host of reasons.  Given traffic problems in general throughout the city on Friday afternoons, and to a lesser extent on Thursdays, it is not clear that any location in the city would be free of such concerns.

At this point, MRIC seems to be the most likely location, assuming the developers come forward with another project – and if that is the case, planning is going to become really important.

The first thing that needs to clearly happen is we need to figure out a way to reduce the current impacts.  Again, it seems clear that not all of the problems here are caused by the redesign.  That fact actually does not really help with concerns about a new project along Mace.

The Waze problem is really, but also probably, part of the story as well.  Another problem is that there simply is not sufficient capacity along I-80 to accommodate additional traffic, especially when some of that traffic late in the week is not simply commuting home from work, but traveling to go skiing or otherwise going to the mountains.

Is this even something we can fix, without a regional solution that either reconfigures I-80 so that it doesn’t expand to five lanes and then contract down to three lanes right in the middle of Davis?  Or expand the causeway to four lanes to avoid the bottleneck effect?

The second factor is addressing the impact of MRIC.  It is easy to look at MRIC as adding a ton of traffic, but it is important to remember that the build out for such projects would be over a 20- to 50-year period, so it is not like a housing development where the traffic impacts would be early in the process.  This would slowly ramp up traffic over time, but we might not feel the effects for five to ten years at least – hopefully giving us time to address other concerns.

Second, I know there is an assumption that there will be housing on the site, but the last time I talked with the developers and city officials, that did not seem likely.  I, of course, would and have argued that having housing on the site, if structured properly, would reduce the need for off-site commuting and reduce the need for employees to drive on I-80 after work, but those arguments seem to fall on deaf ears of those who argue there is no way to ensure that the employees will live on site and that the real purpose of this project is to build housing under the guise of economic development.

Given the complicating factor of housing, it seemed at least before this issue arose that housing would not be part of this proposal.

But, if not housing, how do we address traffic impacts?  This is the challenge that we had with Nishi and will be a key challenge here.  Clearly this project needs to be heavily transit-oriented to work and that will be complicated.

The current situation along Mace Blvd., whatever the cause, is going to make it far more difficult for MRIC to come forward.  One of the keys for successful Measure R votes is limited impacts on near neighbors and overall traffic flow.  Even with a $10 million pledge by the developers of Nishi, it was not enough to overcome concerns with the traffic impact.

What it does mean is that any proposal is going to require a very good transportation plan and regional buy-in from SACOG (Sacramento Area Council of Governments) and other agencies to make it work.  There is no guarantee that even a good plan will be enough to overcome traffic concerns.

This is going to make a challenging proposal even more challenging, but my argument here is that we really lack a lot of good alternatives.  If we allow our concerns about additional traffic impacts to drive our public policy here, we are then stuck in a position where we have no clear outlet for economic development and thus no clear fix for revenue generation.

In the long run, I think that is a bigger problem than the current traffic impacts.

—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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144 thoughts on “Commentary: Does Mace Mean We Should Forget about MRIC?”

  1. Craig Ross

    To the substance of the article …  What is the extent of the “mess”?  Other than during peak hours on Thursday/ Friday, is there a problem?  I get uncomfortable when we use terms like “mess” apparently that are so profound that the word needs to be CAPITALIZED, without defining or quantifying the problem.

  2. Alan Pryor

    One needs to look no further than the vote in 2016 on Nishi, where concerns about traffic along Richards Boulevard, even with a viable plan to mitigate those traffic concerns, led in part to the narrow defeat of the project at that time

    I don’t expect the voters will trust that the City has a “viable plan” to solve Mace traffic while they are sitting in Mace gridlock anymore then they did on Nishi when you said the City had a viable plan while drivers wre stuck on Richards Blvd traffic trying to get through the tunnel.

    1. Craig Ross

      It doesn’t matter if someone says the city has a viable plan, it matters if the voters think there is a viable plan.  David’s opinion is that it was viable.  I tend to agree.  You disagree clearly.  

      1. Alan Pryor

        What I have provided is simply a observation that voters do not trust the Vanguard’s prognostications of “proposed” traffic improvements. Why would they? The Vanguard has never offered a shred of objective evidence to substantiate its opinions.

        1. Craig Ross

          Let’s just discuss the issues.  It doesn’t matter if it’s the Vanguard’s point or the developer’s point or the city’s point – the thing that matters is whether you agree or disagree with it.  Bottom line here – can we design an innovation park that addresses traffic concerns or is any proposal going to be doomed?

        2. Alan Pryor

          Unless the City can solve the traffic MESS (intentionally all capitalized) on Mace they admittedly at least partially created themselves, I believe any attempt to get MRIC passed will fail at the polls

  3. Alan Pryor

     

    The first problem here is that the city is in grave need of new revenue sources….While I believe that the main factor here is external to the city, the extent to which Mace Blvd.’s re-design is contributing to this problem is emblematic of a city that lacks revenue sources.

    Huh? WTF? So are you saying if the City just had more tax money they could have solved the Mace traffic problem they created by their own lousy design. This defies logic. Vanguard readers and Davis voters do see that, don’t they?

    1. Ron Oertel

      Alan:  If the “unstated goal” of obtaining the SACOG-administered grant was primarily to get the road repaved, I wonder if that would be a misuse of funds?

      It would be interesting to know what portion of the cost is due to road repaving (vs. “improvements”), and whether or not the city could have used the funds that it contributed toward this project directly for road repaving, instead.  (Thereby leaving out the unpopular “improvements”.)

      1. Craig Ross

        Ron: The goal of rehabilitating the roads was a stated goal: “First, they wished to rehabilitate the street.  Staff noted in their 2016 report: “PCI score varies from 16 to 45 as of 2013 and deteriorates at a rate of 2‐3 points per year.””

        1. Ron Oertel

          Thanks.  Whether or not its “stated” on a staff report would not necessarily negate my question. Are the SACOG-distributed funds intended to be used for road maintenance?

          Also, what stipulations are attached to the funds that the city itself contributed?

  4. Rik Keller

    It’s important to remember that research parks like The Vanguard is pushing are just “fields of schemes” that don’t deliver what they promise.

    From the Chronicle of Higher Education, 11/18/2018, “Enough With All the Innovation”

    https://www.chronicle.com/article/Enough-With-All-the-Innovation/245044
    “Marc Levine, an economic historian at the University of Wisconsin at Milwaukee, has studied the economic effects of university investment in innovation and entrepreneurship programs and found that there is little data to justify all the spending. Outside of the few examples of academe-to-industry synergy that most institutions dutifully cite as aspirations — Silicon Valley and Stanford, Boston’s Route 128 tech corridor and Harvard and MIT, and North Carolina’s Research Triangle — there’s scant evidence to connect these investments with local job growth or even increased university revenue.
    If the evidence for the economic value of entrepreneurship initiatives is so scant, and the crises of tuition, student debt, and class size so urgent, why do so many universities keep throwing money at the innovation chimera? One answer is that administrators, like most people, aren’t particularly innovative. They respond to trends. Think about it: What could be less innovative now than founding yet another academic center for innovation and entrepreneurship?”

    1. Rik Keller

      Marc Levine who is the director of the Center for Economic Development at the University of Wisconsin-Milwaukee is the foremost expert on research/business/“innovation” parks who has done the most comprehensive studies of them and their lack of economic development impact. It is interesting that The Vanguard —- which has recently proclaimed the need to pay attention  to “science” when it comes to public policy —- ignores these studies.

      1. Rik Keller

        The Vanguard also fails to mention that a very large proportion of the projected tax revenue for MRIC would come from the very small proportion of unrelated retail uses and hotel development on the site. Realistic projections for actual research park/“innovation” center tax revenues are low, and the amount of such development would have to be massive to make any kind of impact on the City budget.

      2. Richard McCann

        On what basis do define “the foremost expert”? I believe you posted Levine’s “The False Promise of the Entrepreneurial University” previously, and I reviewed it, finding a number of serious methodological issues. It’s not possible to draw any conclusions from that study as it has a number of selectivity biases and fails to account for key econometric issues. We can’t put any stock into that study.

        1. Rik Keller

          Richard: tell me somebody else who has studied the (lack of) economic development inpact of research parks more than Levine.

          Your earlier comments on his work were not credible  Simply citing yourself now is not credible either .

        2. Rik Keller

          Richard McCann: does this soumd familiar to you?

          https://www.chronicle.com/article/A-Better-Formula-for-Economic/125441/

          “Build a magnificent technology park next to a research university; provide incentives for chosen businesses to locate there; add some venture capital. That is the common recipe for harnessing higher education and industry to spur economic growth as prescribed by management consultants touting the “cluster theory” developed by Harvard Business School’s Michael E. Porter.

          …Regional planners and some academics get very defensive when asked to produce evidence of cluster theory’s success.“

           

           

        3. Rik Keller

          If you really want to dig into the literature on the subject, the following relates to research on whether the supposed “synergy” in research parks actually provides a boost to the firms that locate within them. (This is, of course, a different matter than analysis about whether research parks are a viable economic development engine for communities. But it is still interesting).

          “The academic literature on science parks has grown substantially over recent decades but offers very mixed results in relation to their effects on innovation, growth and job creation, partly because of the theoretical and methodological difficulties of assessing this ( Hobbs, Link, & Scott, 2016). In summarising this evidence, we drew in particular on the recent annotated literature review produced by Hobbs et al. (2016) and which reviewed more than 80 empirical, theoretical and case study research studies on science parks between the late 1980s and 2016. This literature suggests mixed evidence from matched pairs of firms located on and off science parks in terms of growth, with some finding positive effects ( Siegel, Westhead, & Wright, 2003;Westhead & Batstone, 1999) while others find no effects ( Ferguson & Olofsson, 2004;Lamperti, Mavilia, & Castellini, 2017;Liberati, Marinucci, & Tanzi, 2016). …”

    2. Mark West

      “or even increased university revenue.”

      Why would anyone care about the University’s revenue? The purpose of expanding our commercial space in town is to improve the City’s revenue. Any claim that new businesses won’t create new jobs is beyond silly.

       

      The Chronicle of Higher Education is a University focused newspaper, not a peer-reviewed journal.

       

      1. Rik Keller

        Mark West: you are missing the point and have not followed up on the actual findings of the literature on the subject. . Research parks/“innovation” centers are overhyped in terms of their actual economic development impact. Many are reliant on the largesse of educational institutions to remain viable. The private ones are even less viable.

        1. Mark West

          Rik Keller: I am not missing the point, you oppose development and will say anything to support your position. UCD is a virtual goldmine of commercial opportunity for the City, yet we consistently fail to capture that opportunity due to a lack of commercial space. There is nothing ‘overhyped’ about that reality.

        2. Mark West

          “I oppose field of schemes pie-in-the sky plans…”

          It is fascinating to me how someone who has been provided an opportunity to have a career and find an appropriate place to live is so willing to work to prevent others from having those same opportunities. The reality here, Rik, is that you use the ‘pie-in-the-sky’ descriptor (among many other examples) to push your agenda against creating opportunities for others. There is nothing pie-in-the-sky about the City’s shortage of commercial space and the resulting lack of business development, they are both simple realities that we need to address.

        3. Rik Keller

          Mark West: it is fascinating to me that you are pushing an economic development strategy that has been a failure in most places. And that you characterize someone opposed to snake oil schemes as being against jobs for other people.

        4. Mark West

          What ‘snake-oil’ scheme am I pushing, Rik?

          I’m calling for expanding our commercial sector in order to create opportunities for residents, not pushing any particular scheme. Contrary to your rhetoric, you have not presented a single bit of evidence that demonstrates that economic development doesn’t work, or that expanding our commercial sector won’t bring in new revenues to the City while at the same time creating jobs. You can’t present that evidence because it is contrary to economic reality. The real question then is not ‘if we should do it,’ but rather, ‘how we should do it?’ MRIC may not be the best approach, but it may well be the only approach available to us thanks to the false promise known as Measure J/R. Past decisions have consequences, in this case, by limiting our options for the future. Yet, you oppose even those few opportunities while never presenting alternatives.

        5. Rik Keller

          Mark West: for some reason you are ignoring the literature I’ve cited that shows that research parks are a boondoggle. That’s the economic reality.

           

           

        6. Rik Keller

          Mark West: Have you read Levine?  Dud you come across this conclusion?:

          ”Local economic development is a public policy field with a checkered history, prone to fad chasing and a “herd mentality” among decision-makers and often dominated by powerful business interests. Over the past three decades, for example, despite overwhelming evidence from academic studies that such projects yield little community economic benefit, cities and states have invested billions in convention centers and sports stadiums as “engines” of local economic development. In many ways, the entrepreneurial university is the “next new thing” in this long line of oversold economic development fixes.”

          MRIC is being pitched to us by failed snake oil salesmen like Barry Broome (who left Phoenix after a terrible track record of delivering actual economic development) as this exact kind of university/private business enterprise.

        7. Mark West

          “Over the past three decades, for example, despite overwhelming evidence from academic studies that such projects yield little community economic benefit, cities and states have invested billions in convention centers and sports stadiums as “engines” of local economic development.”

          Once again, this is an argument against tax subsidies, not economic development.

           

          We have businesses that want to build and/or expand here but have no room for them to do so. No need for tax subsidies just appropriately zoned land.

        8. Rik Keller

          Mark West: the research consistently shows the same thing regardless if subsidies are involved are not (and even research parks that are propped up by subsidies don’t have economic development impacts.)

          https://www.researchgate.net/publication/46454449_Do_Science_Parks_Generate_Regional_Economic_Growth_An_Empirical_Analysis_of_their_Effects_on_Job_Growth_and_Venture_Capital

          “Agglomerations, or “clusters” of industries, and especially of high-technology industries, can be major sources of economic growth. Policy makers therefore often search for ways to catalyze such clusters. A popular approach is to establish a science or research park in the hopes that it will attract companies and fuel regional economic growth. In this paper I assemble a county-level panel dataset to explore the effects of science parks on job growth and on venture capital. Non-parametric and econometric analysis reveals no positive effect of science parks on regional development overall. In other words, while success stories do exist, the analysis suggests that successes are the exception rather than the rule. Thus, policies intended to promote cluster development by subsidizing science or research parks are unlikely to be effective.”

          And https://www.jamesgmartin.center/2015/08/the-faux-field-of-dreams-if-you-build-a-university-research-park-they-may-not-come/
          “These assertions, by the way, are not based on conjecture. They’re backed up by academic studies and empirical evidence that show no causal link between a university’s “entrepreneurial” activity and local economic development. Examples of failed research campuses include Innovista at the University of South Carolina, UT-San Antonio’s Texas Research Park, and the Maryland Science and Technology Center in Bowie, Maryland.

          Officials in those cases promised thousands of jobs and economic stimulation. Instead, the projects failed to grow their local economies. Hundreds of millions of dollars were wasted on what ultimately turned out to be glorified office space.”

        9. Craig Ross

          “Examples of failed research campuses include Innovista at the University of South Carolina, UT-San Antonio’s Texas Research Park, and the Maryland Science and Technology Center in Bowie, Maryland.”

          Examples of successful ones: Atlanta, North Carolina, Boston, Seattle, St Louis and many others.

        10. Mark West

          Rik Keller: How does anything you have posted relate to the need to expand our local commercial tax base? How does it relate to the lack of properly zoned land needed to allow our local companies to expand?

          You are using data from large, subsidized projects located elsewhere to argue against our local reality. Your ‘evidence’ is not relevant as it says nothing about our local conditions and the small size of the proposed projects. The only nexus is the use of similar marketing terms…woohoo!

          Please, Rik Keller, tell us your proposal for making Davis fiscally sustainable. What are your alternatives to commercial development?

        11. Rik Keller

          Mark West:

          The first step is to not listen to the snake oil salespeople. Your idea that we should essentially just do anything that has the faint whiff of “economic development” is irresponsible.

          As fur your other questions: Davis already has a housing deficiency for current workers. Why do we want to provide “economic development” for commuters from other areas? We should focus on providing actual workforce housing rather than projects for rich students & seniors that have a pittance thrown in for a small percentage of low-income units.

          Do we actually have a lack of commercially-zoned land? You provide no evidence to support this claim. And indeed, the data we do have shows the opposite: there is a multiple-decade supply.

          Finally, I presented detailed documentation showing that research/business parks don’t provide the economic development benefits that their supporters claim. Much of the literature even shows no substantial performance benefit to business co-locating in parks.

          This is true even of the ones that are subsidized, much less the ones that aren’t. What we will likely see is a proposal that includes hotel and retail uses (if not housing also) which will be needed to make a project financially viable.

          Incidentally, the hotel/retail uses  will also produce a large proportion of the city tax revenue for the project because the office/research center uses are weak tax revenue generators. The size of the research/office component will have to be astronomical to even make a reasonable dent in the City’s budget.

        12. Mark West

          Rik Keller: You made a number of statements about what we should not do, but you have yet to describe an alternative to economic development for meeting the City’s fiscal needs. You are, however, quite adept at sayin’ ‘no.’ It is good to have at least one talent…

          “Davis already has a housing deficiency for current workers. Why do we want to provide “economic development” for commuters from other areas?”

          Davis does have a housing deficiency and the way to address that is to build more housing, which you oppose. I want to expand our commercial sector in part to create good jobs for our residents. Doing so will reduce VMT, not increase it.

          “Do we actually have a lack of commercially-zoned land? You provide no evidence to support this claim. And indeed, the data we do have shows the opposite: there is a multiple-decade supply.”

          This claim has been debunked as utter nonsense so I won’t waste time on it. I’m confident that Jim Gray can provide you with the details if you are truly interested.

           “Finally, I presented detailed documentation…”

          You linked to a couple of old studies and quoted conclusions that didn’t even match your own claims, let alone address our local issues. Show us a study that says that economic development doesn’t create revenues for the city…You can’t…

          “Incidentally, the hotel/retail uses will also produce a large proportion of the city tax revenue for the project because the office/research center uses are weak tax revenue generators.”

          Appropriately designed business parks following current ‘best practices’ include hotels, workforce housing, and local retail. All aspects will add to the revenues of the City.

          “The size of the research/office component will have to be astronomical to even make a reasonable dent in the City’s budget.”

          ‘Back of the envelope’ calculation done a few years ago suggested that we needed roughly 1000 acres of commercial development to meet the current needs of the City. It will take a few decades before we reach that level, but only if we start now. You have provided no alternatives…other than to say ‘no.’

           

        13. Rik Keller

          Mark: you don’t seem to understand the nature of the research I posted (including a 2018 study on research parks). Indeed you have been able to post any studies that contradict. these findings.

          I have been a strong proponent of affordable workforce housing. Your only proposal is to build more housing in general, which ignores the problem .

          Go ahead and post your back of the envelope analysis of the 1,000 acres of commercial development you say are “needed to meet” the needs of Davis. How many jobs is that? What is the City’s fiscal net from this type of development? How much housing and population growth would be required to maintain a jobs/housing balance? What is the fiscal net of this development in turn?

    3. Richard McCann

      A more careful reading of Levine’s 2009 article here https://dc.uwm.edu/cgi/viewcontent.cgi?article=1025&context=ced_pubs reveals that he is against willy-nilly investment in innovation parks. He points out the need to create agglomeration economies and to retain the newly trained workforce locally. UCD, due in part to its prime location, offers the elements that Levine says are too often ignored when a research university is in a location that is losing workforce and investment. Instead, we are looking to capture all of the necessary elements that are flowing right by us. That’s a very different story.

      1. Rik Keller

        Richard McCann: it’s amusing that your earlier response a couple months ago was that Levine’s research was not adequately peer-reviewed, and that your immediate response today was to question whether Levibe is an expert in this subject.

        Then you turn around and point to one part of Levine’s conclusions,  yet ignore the broader research he has done and conclusions he has drawn regarding the general failures of the business park/“innovation park” model. You have demonstrated the very definition of  “cherry-picking.”

      2. Rik Keller

        Richard McCann: in your “careful reading” of Levine, did you miss these statements and findings (just as a few examples?):

        “The Yale/New Haven and Johns Hopkins/Baltimore stories exemplify the elusive connection between research universities, academic entrepreneurialism, and local economic development. Almost without exception, the same narrative of overselling and disappointment recurs – especially, as Table 5 highlights, in older, historically industrial cities.”

         

        “Wallsten’s study (2004), although limited in a number of ways, nevertheless provides one of the only systematic empirical analyses of the regional economic impact of research parks. He compares trends in high tech job growth and venture capital formation in a set of “matched” counties across the United States: “treatment counties” that built research parks after 1986, and economically similar “control counties” without research parks. Wallsten found little difference in the economic performance of the two sets of counties, and concluded that establishing a research park has no net impact on job growth of the amount of venture capital attracted to the county. “While success stories do exist, the analysis suggests that successes are the exception rather than the rule. Thus, policies intended to promote cluster development by subsidizing science or research parks are unlikely to be effective” (Wallsten, 2004, 15).”

        “Table 8 provides the most salient summary statistics on the connections between research universities, academic entrepreneurialism, and economic development in medium-to-large U.S. metropolitan areas. For the 55 regions, I have calculated bivariate correlations between the key independent variables on entrepreneurial universities (levels of research expenditures, patents, and licensing) and a series of dependent variables representing economic development outcomes (city job growth, employment city and metro area residents, and metro area GDP growth). The correlation coefficients between these variables are arrayed in Table 8.

        The results are eye-popping. There are no meaningful correlations between any of the entrepreneurial research university variables and any of the gauges of city or regional economic well-being; indeed, only a few of the coefficients are even slightly positive, but these are far too low to suggest any relationship. Simple correlation analysis, added to the descriptive statistics presented earlier, reveals no support for rhetoric that entrepreneurial research universities are engines of local economic development.”

        1. Mark West

          “Thus, policies intended to promote cluster development by subsidizing science or research parks are unlikely to be effective”” 

          Who has suggested that the City subsidize the development? This is an argument against tax subsidies, not against economic development.

          The City needs more commercial space if we are going to expand our tax base and work to make Davis fiscally sustainable. It doesn’t matter what marketing terms are used to help ‘sell’ that idea to the voters, what matters is that we identify the space and get the projects built.

        2. Rik Keller

          Mark West: you are missing the point again. Even where these research park schemes are propped up by university/public funding, they are  usually unsuccessful and don’t provide economic development results. (And then what ends up happening in a lot of places is increased demands for bailouts/corporate welfare).

          Davis has multiple decades’ worth of available land for commercial development. But “some people” (like Greenwald) are trying to claim the contrary in their campaign for a large new suburban research park.

        3. Craig Ross

          Usually unsuccessful?  How do you know – you’re relying on 15 year old studies.

          St. Louis, Philadelphia, Seattle, Boston and Atlanta.  Atlanta’s innovation hub had barely started when the study you are citing came out.  Now it’s a multi-billion a year operation.

        4. Mark West

          No, Rik Keller, I’m not missing your point. You continue to throw out nonsense hoping some of it will stick. Your ‘evidence’ centers on the impact to Universities, not to their host cities.

          Show us a study that says that the majority of commercial development does not provide net revenues for the City. That would be an argument against economic development. What you are providing is the digital equivalent of ‘hot air.’

        5. Rik Keller

          Mark West: if you want to engage in the topic, you could start by reading at least some of the literature in the topic that I have pointed to that covers the lack of economic development impact on cities of this stale & failed strategy of suburban business parks.

        6. Rik Keller

          Mark West: the evidence in the literature is overwhelming that research parks are not  engines of economic development. It’s too bad that you don’t want to engage with economic reality.

        7. Richard McCann

          Rik

          First off, you didn’t just claim Levine was an expert in the field; you claimed he was “the foremost expert”. That’s a tall claim that demands substantial evidence, not just that he has peer-reviewed articles. I don’t question whether he’s an expert, I question whether he is the “foremost” one. That burden of proof is on you.

          And then I did cite to one of his articles, noting that it’s not really about whether innovation attempts have been successful, but rather the lack of evidence about a general effect from such efforts across all investments.

          What Levine found is that there has been no RESEARCH that supports whether innovation parks have been successful or whether research universities prompt economic growth. The lack of research doesn’t mean that the supposition isn’t true. It’s like saying because we haven’t done enough studies on gravity, gravity must not exist. As I’ve pointed out, the studies that he does point to are poorly constructed and inconclusive. It was the Wallsten study that I went through and pointed its fatal flaws. (It’s too hard to find past comments, and even stories, on this website.)

          So I’m curious as to how you believe economic growth might be created locally? Is it completely random? Is there absolutely nothing that a community can do to encourage local economic development? Are you saying we should just sit back and take whatever is going to come at us?

    1. Ron Oertel

      I “object to” the use of the word “Park” in this context.  😉

      Unless we’re referring to a “car park”. (Actually, perhaps that already applies to the “Mace Mess”, as well as I-80 itself.)

        1. Alan Miller

          To be more precise, an “innovation center” is a marketing term.

          EGG-ZACKLY.  That often ‘qualifies’ such for government subsidies, and maybe even an “innovation officer”.

      1. Rik Keller

        Even the Brookings Institute—despite its breathless jargon-filled pumping of the idea—has nailed the core of it: just the same old snake oil repackaged:

        “…trend in the rising use of the “innovation district” lexicon. In a number of cities, local stakeholders have applied the label to a project or area that lacks the minimum threshold of innovation-oriented firms, start-ups, institutions, or clusters needed to create an innovation ecosystem. This appears to result either from the chase to jump on the latest economic development bandwagon, the desire to drive up demand and real estate prices, or sometimes a true lack of understanding of what an innovation district actually is. The motivation for real estate developers to adopt the moniker seems clear: to achieve a price premium for their commercial, residential, and retail rents.”

        MRIC, though, is not even trying to be “innovative.” It is just a standard old-school office/research park: an isolated campus-type development located on the literal edge of town.

        1. Craig Ross

          “MRIC, though, is not even trying to be “innovative.” It is just a standard old-school office/research park: an isolated campus-type development located on the literal edge of town”

          I think you’re using the term “innovation” wrong here.  Innovation doesn’t refer to some sort of innovative design.  It refers to the fact that the research park is high tech, R&D.

        2. Alan Miller

          An “innovation center” is a business/office park that wants to charge higher rent.

          Or figure a scheme/scam to get part of their development subsidized (including tax breaks, same thing) . . .

  5. Craig Ross

    Perhaps Rik can address whether he believes the Innovation Districts in the following cities are successes or failures: St. Louis, Philadelphia, Seattle, Boston and Atlanta.  And explain why.

  6. Jim Frame

    I don’t see much of a nexus between the political viability of MRIC and the traffic snarl currently plaguing Mace south of I-80.  (For the record, I’m in the camp of completing the project south of the freeway and seeing how it performs for awhile before concluding that it needs to be redone.)   It seems to me that a large percentage of MRIC traffic will be to/from I-80, which involves only a short stretch of Mace featuring a few intersections.  I don’t foresee much MRIC traffic going south on Mace beyond the Nugget shopping center.

    The likely benefit of MRIC to the city is yet to be demonstrated.  The last go-round was disappointing even before the housing component was tossed in, which was a deal-killer for me.  I’d like to see a tech-oriented business center there, but the developer’s consultant last time wasn’t very optimistic about the ability of the site to attract a lot of interest.

    1. Ron Oertel

      Jim:  I understand that a lot of the traffic going through the “Mace Mess” is ultimately attempting to use the same freeway access points (and frontage roads) that MRIC would use.

      Complicated by apps directing traffic off of I-80, and back onto it using those same access points.

      Not to mention the existing gridlock on I-80, which ultimately backs up onto those same access points and streets. The existing gridlock is the reason that apps are directing traffic off of I-80 in the first place.

      The Mace Mess is already demonstrating the city’s lack of ability to anticipate traffic flow.

       

      1. Alan Miller

        The Maaaaeeeeesssss increases the gridlock on Mace, and thus the WAZE app will not route people via Mace, thus decreasing gridlock on Mace.  So the cause is the cure (is the cause is the cure) — creating “perfect gridlock balance”.

  7. Ron Oertel

    From article:  “Another problem is that there simply is not sufficient capacity along I-80 to accommodate additional traffic, especially when some of that traffic late in the week is not simply commuting home from work, but traveling to go skiing or otherwise going to the mountains.”

    Yeap.

    From article:  “Is this even something we can fix, without a regional solution that either reconfigures I-80 so that it doesn’t expand to five lanes and then contract down to three lanes right in the middle of Davis?  Or expand the causeway to four lanes to avoid the bottleneck effect?”

    Nope.  Nor should we, if the city is attempting to address its contribution to additional global warming. Unless that’s just “lip service”, when dollar signs are involved.

    Perhaps it’s time to acknowledge functional limitations of infrastructure, as well as environmental impacts. (Well, it’s already past that point, actually. But, that’s never stopped development interests and their allies from skewing the arguments.)

     

     

  8. Rik Keller

    I’m surprised that nobody has brought this up yet, but in the larger context it is irresponsible to consider these types of large-scale development projects outside the context of the General Plan. This is the whole reason we have a long-range land use planning process in place: to avoid piecemeal planning in a reactive mode.

    1. Matt Williams

      Rik, California State Law requires that any development in Davis that directly or indirectly adds population to Davis must be processed as a General Plan Exception.  The reason is because the current Davis General Plan includes a maximum population that is lower than Davis’ actual population.  We have no choice.  It’s the law.

    2. Mark West

      “outside the context of the General Plan.”

      The current General Plan (circa 2000) calls for 200 additional acres of commercial development over the subsequent 10 years (2010). None of that was created, so we are at least 200 acres and nine years behind the existing planning documents. MRIC would fit within the boundaries of the existing planning documents and consequently would not be a ‘piecemeal’ or ‘reactive’ effort.

       

      1. Rik Keller

        Matt: thanks for that info. Regardless of whether an exemption is required though, General Plan policies are still in effect and any project should be consistent with them.

        Mark: I don’t see reference to what you are talking about. Here are some relevant policy action items under Policy ED 3.2:

        “Study opportunities to designate lands for “green” technology, high technology and University related research uses within or adjacent to the City. Work closely with the local business community, community leaders and U.C. Davis officials in determining when and where such uses can best be accommodated in addition to the 25-acre enterprise site planned on the UC Davis campus.

        Preference should be given to sites that are viable economically and consistent with compact City form principles. As part of this study:

        • Consider re-designating or rezoning land(s) within the City limits (as of January 1, 2001) from Industrial, Business Park or General Commercial to research-oriented Business Park uses (that is, uses which allow a wider range of high technology, research and development uses than a URRP and which are complementary to UC Davis);

        • Encourage second floor and underground building construction to maximize the space available to accommodate URRP needs within the City limits;

        • Key considerations in such re-designation or rezoning shall include the timing of these potential development(s) and impacts and demands caused by these potential developments on the City and the Davis community. Impacts to address include, but are not limited to: traffic, water, housing (for example, growth demand), schools, effects on neighborhoods, and economics (for example, cost benefits and cost generation to the City); and

        Designation of a peripherally sited URRP shall only occur after:

        a) It is determined that lands within the City limits would not meet the needs for “research-oriented” Business Park uses.

        b) Specific guidelines for development projects on the periphery of the City are adopted.“

        1. Rik Keller

          Mark: go ahead and post the GP policy text that you are referring to. And while you are at it, respond to the policy text I posted above in regards to what you think means for a MRIC proposal.

  9. Ron Glick

    Interesting question about MRIC and traffic. First the question of  measure R  is interesting because I wonder how many of the people impacted by the road project get to vote on MRIC?

    Second I wonder how much of the gridlock on Mace is being caused by the inherent conflicts between bikes and cars . For some time the bike advocates in town have gotten whatever they have wanted; tunnels under I-80, bike lanes that fit two riders abreast, reduction of the claw, elimination of parking on B st. north of Russell, the Fifth st. road diet and the re-slopeing of the railroad overpass on Covell.

    Now with both paid parking and Mace we are seeing pushback from the community. I think an interesting question is have the bike advocates over reached?

    I don’t know much about the problems at Mace but one friend was talking about how they thought the bike infrastructure built into the project was over the top.

    As for MRIC. The project came to life when the ag and preservation communities revolted against building a business park on the 391 parcel that was city owned. That project would have generated millions in ongoing cash flow for the city and would have gone a long way toward righting the fiscal ship of the city.

    After 391 was put under a conservation easement and sold for a fraction of what it was worth to the city if developed MRIC got proposed as an alternative with FMC Schilling’s new plant as a potential anchor. When the oil market collapsed a few years ago the demand for subsea robotics declined too and FMC Schilling merged with Tecnip in an industry consolidation. I’ve heard nothing about the need for a new Schilling plant since and so it seems MRIC is plodding ahead with a development plan without an anchor.

    As far as I know Rik is right that MRIC is likely more of a blue sky wish at this point but in fairness to MRIC its hard to book projects when you can’t guarantee that the business park will be approved by the voters.

    1. Alan Miller

      I think an interesting question is have the bike advocates over reached?

      A bit of an over-reach itself, that statement.  I’m a huge bike advocate, and I agree with most (not all) of the projects you listed, but honestly there is so much more that needs to be built that has not.

      In this case, however, the bike infrastructure is so over-the-top ridiculous that it not only spends too much in one place, but it becomes a poster-child for those who oppose spending on any bike infrastructure improvements (sane, modest, or just maintenance) citywide.

    2. Rik Keller

      Ron Glick: do you have documentation of the fiscal projections for the City regarding the property you mention? My estimates for net annual fiscal benefit for the city for the R&D/office/industrial uses in MRIC proposal are in the range of $300-500K (using realistic land valuation based on regional figures; see elsewhere in the comments for detailed analysis) before taking into account costs for the substantial induced population growth from the project.

      1. Don Shor

        My estimates for net annual fiscal benefit for the city for the R&D/office/industrial uses in MRIC proposal are in the range of $300-500K

        Good start. Add in the hotel and retail, and you’ve got a reasonable amount of new annual revenue for the city.

        (using realistic land valuation based on regional figures; see elsewhere in the comments for detailed analysis) before taking into account costs for the substantial induced population growth from the project.

        Which would be zero, unless the voters approve more housing.
        Good analysis.

        1. Rik Keller

          Don: these estimates I provided are much less than listed in the EPS report (which has highly inflated land valuations). And as noted earlier, they don’t account for the fiscal impact of population growth in the city (which is likely to be negative). And if the new employees don’t reside in Davis, that estimate goes down even more.

          Ignoring the second and third points for the moment, that addresses maybe 4-6% of the City’s $8 million deficit, with an employment increase of 10,000 and a population increase of ~20,000 (or about 30% increase from current levels). Just further demonstration that we can’t build our way out of this.

          Returning to Mark West’s estimate of 1,000 acres of this type of development needed to address the City’s $8 million deficit, we would actually need at least 16-27 MRIC-sized developments or about 3,400 to 5,700 acres with  employment increases of 160,000-270,000 and population increases of 320,000-540,000.

          1. Don Shor

            The premise was that economic development was part of the fiscal strategy, with tax increases and cost reductions as the other parts. We need MRIC, as many smaller sites as possible, continued economic development downtown and nearby, and anything else that can help diversify the city’s revenues.
            Unless you’re saying that economic development leads to net negative revenues, doing nothing is not a workable strategy. There’s a limit to how much can be achieved by cost-cutting, and probably an upper limit on how much the voters will tax themselves or others. So permitting business parks where they can be added will help. That’s been the basic conversation here for well over a decade.

        2. Rik Keller

          Don Shor said “Which would be zero, unless the voters approve more housing.”

          Which would then substantially reduce the positive fiscal impact of the project because those projections are based in part on the employees living in town and their retail expenditures.

          1. Don Shor

            Which would then substantially reduce the positive fiscal impact of the project because those projections are based in part on the employees living in town and their retail expenditures.

            Yes, the multiplier effect. We’re making good progress here on an actual ballpark fiscal analysis. Let’s zero them out, and add back in the hotel and retail revenues. Where does that leave us in terms of fiscal benefits to the city?

        3. Rik Keller

          Don Shor: yes, let’s agree “zero out” the net fiscal impact of the research park uses of MRIC. Then all that’s left are the hotel and the retail uses which have no need to be built at MRIC (and the massive impact from 10,000 new jobs and 20,000 new population). Why are you pushing this project again?

          1. Don Shor

            let’s agree “zero out” the net fiscal impact of the research park uses of MRIC.

            No, just the multiplier effect of employees who reside here. There are fiscal benefits to research park businesses. Increased property tax on the real property and the unsecured property, as well as the business-to-business sales.

            the hotel and the retail uses which have no need to be built at MRIC

            They’re part of the proposal, so they should be included in the fiscal evaluation.

            20,000 new population

            Since this is a fake number, you might want to stop using it. The city’s population is not going to increase by 20,000 due to MRIC.

            Why are you pushing this project again?

            Economic development leads to revenues to the city to help improve the budget.

        4. Ron Oertel

          There’s already a large hotel currently under construction, essentially across the street from the MRIC site.

          Ultimately, I suspect that “economic development” arguments are not a winning hand for proponents, regardless of whether one believe it will help city finances.

          Which immediately turns back to traffic impacts, etc. Coupled with the fact that voters have approved two other developments, both of which eliminated commercial components that didn’t appear to be backed up my market demand. Not to mention the other sites around the city that have been converted from commercial zoning to housing, by the council. (Which will further impact traffic, when they’re all built.)

           

        5. Rik Keller

          In response to the question “Why are you pushing this project again?” Don Shor said “Economic development leads to revenues to the city to help improve the budget.”

          You are ignoring the mountains of research that show that research parks are ineffective in this regard.

          1. Don Shor

            It’s a business park.
            There is no subsidy.
            There is no way it loses money for the city.

        6. Craig Ross

          Most of that research is 15 years old.  Moreover – there is considerable evidence that a number of innovation centers are making sizable amounts of revenue, produce jobs, and help expand the economy.  The research cited by Rik Keller is narrowly focused and cherry-picked.  It doesn’t represent a representative survey of the research.

        7. Rik Keller

          Don Shor said:

          “It’s a business park.
          There is no subsidy.
          There is no way it loses money for the city.”

          1) Even research parks with substantial subsidies are oftentimes not functional (see Lexington KY example elsewhere here). And then the bait-and-switch happens: residential and retail uses get proposed, tax breaks get begged for, etc.

          2) Of course it could lose money for the city. First, the projected returns are tiny for the size of the impacts (10,000 new jobs, 20,000 new population according to EPS). Also, the EPS study was very narrow, not considering the costs of the residential development induced (usually a money loser for cities). And if infrastructure improvements aren’t able to be paid back because of less demand for the land than anticipated (see #1 above), guess who is lefty holding the bag?

          Again, why are you pushing a research park development that you see as providing employment just for out-of-towners, will cause massive traffic impacts, will add to some of the longest commuting times in the region, and will have minimal actual fiscal benefit for the City?

          1. Don Shor

            It’s a business park.
            It won’t increase the city’s population. The voters control that. Residential development is not going to be “induced” by this business park.
            I have no problem with what you call “out-of-towners” since we are part of a regional housing market and a regional economy. Davis, Dixon, and Woodland are symbiotically joined with respect to businesses, retail, and housing, and always have been.

            “Of course it could lose money for the city.” Of course it won’t. It will have a hotel, some retail, maybe a conference center, and some space for commercial and/or research-type businesses. All of those generate revenues for the city. I support it because we need more commercial space for existing businesses to expand, we need to expand our economic base, and because it will provide revenues that the city clearly needs.

        8. Ron Oertel

          Don:  “It won’t increase the city’s population. The voters control that.” 

          Your first claim is likely false.

          Regarding your second claim – not entirely.

          In fact, they don’t even control many development decisions.

        9. Craig Ross

          One thing I appreciate is Rik and Ron laying out the case against MRIC, it will make it much easier to anticipate the opposition campaign as a result.

        10. Ron Oertel

          Don:  “It will have a hotel, some retail, maybe a conference center, and some space for commercial and/or research-type businesses.”

          Of course, some of these claims might also be false.  There’s a brand-new hotel under construction across the street, conference centers are money-losers, and retail is dying.

          I’ve never previously noticed how many claims you make as “fact”, with no basis for doing so.

          Craig: As this point, I wouldn’t be that surprised if the MRIC developers gave up, at least for now.

          I have yet to see anyone successfully dispute the analyses that Rik put forward. The best they seem to be able to conjure up is, “yes it will”. (That is, when it doesn’t devolve into personal attacks.)
           

          1. Don Shor

            As this point, I wouldn’t be that surprised if the MRIC developers gave up, at least for now.

            Honestly, that wouldn’t surprise me, either.

        11. Rik Keller

          Don Shor has now given up saying that the research park component will provide any significant revenue for the city. He just wants a hotel & retail. MRIC is s project looking for a justification.

          We have also found out that Don doesn’t believe in providing housing for the Davis workforce because of regional  “synergy” mumbo-jumbo.

          1. Don Shor

            Don Shor has now given up saying that the research park component will provide any significant revenue for the city.

            False.

            He just wants a hotel & retail. MRIC is s project looking for a justification.

            False. The research/commercial component is also important.

            We have also found out that Don doesn’t believe in providing housing for the Davis workforce because of regional “synergy” mumbo-jumbo.

            I don’t believe that workforce housing is a necessary component of any particular commercial project proposal. The MRIC team isn’t going to build housing. They are proposing a business park. They may want to build housing, but I’m guessing that won’t fly. Would you support the project if it included dorms for the employees? I doubt it.
            It’s not mumbo jumbo, Rik. You worked as a planner. You know that housing and business development is regional. I suggest you stop pretending Davis exists in a vacuum.

        12. Ron Oertel

          Don:  It would certainly give participants on here, a break!  Maybe get back to some more friendly communications, as well.  Then again, David’s court case articles (and protest articles from Sacramento) don’t seem to draw as much interest. So, I’m not sure if David is ready to give up – even if the developer is.

          Perhaps a decision won’t be forced upon the city at this time, at least.

        13. Rik Keller

          Don Shor:

          If you think that a couple hundred thousand of $ (at the max) in annual City budgetary revenue is in any way substantial given the size and impacts of the research park component, you need to recalibrate.

          And talk about strawman arguments. You really think I am calling for on-site workforce housing? What I am calling for is a full accounting of the impacts of such a project and that we shouldn’t exacerbate an already out of whack jobs/housing balance.

          Both the EIR and the EPS study discuss the population increase that this project will induce (20.000+ in the EPS report), yet you want to ignore this. And you’re willing to have massive impacts on local traffic, infrastructure, etc. all for the sake of chasing tiny benefits. In contrast, let’s look at what City of Davis General Plan policy states:  “Key considerations in such re-designation or rezoning shall include the timing of these potential development(s) and impacts and demands caused by these potential developments on the City and the Davis community. Impacts to address include, but are not limited to: traffic, water, housing (for example, growth demand), schools, effects on neighborhoods, and economics (for example, cost benefits and cost generation to the City).”

          As far as the regional nature of employment and housing markets, well duh. But you are saying that there is some sort of “synergy” involved. You are calling for more jobs in an area that already has a jobs/housing balance way to high, to not provide housing for the employees in the city, and to exacerbate what are already the longest commute times in the SACOG region (people commuting to Davis). That’s just irresponsible planning. Even a non-professional such as yourself should be able to figure that out.

  10. Jim Frame

    As for MRIC. The project came to life when the ag and preservation communities revolted against building a business park on the 391 parcel that was city owned. That project would have generated millions in ongoing cash flow for the city and would have gone a long way toward righting the fiscal ship of the city.

    At one of the public meetings put on by the MRIC team, I asked why they were proposing housing instead of increasing the available commercial space.  The consultant looks awkwardly at Dan Ramos, then turned back to me at said something like, “We don’t think the market can absorb that much commercial space here.”  So the viability of a 391-acre business park on city land was hardly a sure thing.  Given the absence of anything happening at MRIC, the viability of a 200-acre park seems to be pretty sketchy as well.

    1. Craig Ross

      “the viability of a 200-acre park seems to be pretty sketchy as well.”

      A lot of misconception about how this stuff works.  This isn’t like a housing development where all the houses will be built and sold as they come on the market.  Instead, what will happen is you will have basic infrastructure laid down, and perhaps roads put in, but the build out is going to take place over the course of decades.

      The recruiting of companies is a competitive endeavor.  When the city got Mori Seiki, they were competing with a number of cities, eventually it was down to Chicago and Davis, and Davis won.  In part, they won because they had space to be able to build the building within 18 to 24 months.

      The key thing is that the city has sites that are shovel ready – so that if a company wants to come to Davis they don’t have to go through a five year planning process but instead they only need to build the buildings because the rest is ready to go.

      But from a viability standpoint, it’s not like there are going to be dozens of empty buildings.  It’s more a matter of having available land, zoned and entitled.

  11. Rik Keller

    Mark West stated the following in regards to the amount of commercial development that  we would need to create enough tax revenue to address the City’s budget shortfalls: “Back of the envelope’ calculation done a few years ago suggested that we needed roughly 1000 acres of commercial development to meet the current needs of the City.” Setting aside for a moment Jim Frame’s good commentary that there isn’t likely demand for this amount of development in the first place, since Mark has not provided those back of the envelope calcs, I will do some here to show what this level of development means:

    * 1,000 acres at 30% floor area ratio & 25o sf/employee (standard assumptions for commercial/office development
    = 52,272 new jobs.
    – Davis currently has a jobs/housing balance higher than the SACOG regional average (1.37 vs. 1.18; i.e., Davis is not providing enough housing for its employees and is a net jobs “exporter”/ commuter “importer”), but assuming that Davis keeps up in the future with adequately providing workforce housing and that these new jobs are actually for local benefit, this new employment would require an amount of housing roughly equivalent to regional projections = 1.2 jobs/household and 2.5 persons/HH
    * additional population of 108,900

    So Mark’s “solution” (note: that that this does not consider the fiscal costs of providing services to that amount of development)  to the City’s budgetary woes works out to adding a new population of ~109,000 (note: this does not consider the additional indirect and induced employment to provide services to this new population, and the increased population, in turn, related to that). Looking out, say, 30 years into the future, that 109,000 population increase would represent a 3.2% annual growth rate from the current population of ~69,000. I’m positive that this is not in-line with anyone’s vision for Davis or with reality itself.

    1. Don Shor

      The city voters control the growth of the city. The growth is controlled by Measure R and there is a cap of 1% annually from another previous measure.
      Adding jobs doesn’t add population to a particular city. It just redistributes jobs within the existing regional housing market. Building MRIC would not add 109,000 people to the city’s population, or even 20,000 people using your math (200 acres = 20% of your total).
      You have yet to explain how you would increase revenues to the city’s budget to pay for current expenses and unfunded liabilities, or whether you even think that is a necessary goal.
      The MRIC site was the culmination of a long planning process that began in 2010 with a peripheral business park task force, which held many public hearings and resulted in three sites being selected outside the city limits along with the possible redevelopment of 5th Street between L and Poleline Roads. Of those, only the Mace Ranch site actively remains under discussion, though two of the others could revive at some point.
      The premise of that planning process was that economic development would help the city broaden its tax base and improve the long-term structural deficit. You seem to be arguing that developing farmland, which presently yields no income to the city, would somehow not provide any fiscal benefit. That defies common sense. It’s not subsidized. It’s not being promoted as a panacea. It’s simply part of a strategy of strengthening the city’s finances by providing revenues from commercial development. Not as much as was originally envisioned, but better than not adding anything at all to the city’s coffers.
      The many small vacant parcels have been identified and analyzed. There are myriad reasons they aren’t being developed. While it would be great to try to remove any hurdles for developing the smaller parcels, they don’t add up to much and often there seem to be other reasons they aren’t in play.
      MRIC is surrounded by ag-conserved land and freeway, so it doesn’t promote sprawl. There are very few near-neighbor issues. It is a logical place to add some businesses, a hotel, and some office space. It might take a long time to build out. It may be that this owner/developer team isn’t the one to do it for various reasons. But there is little question that it would yield more revenues to the city than it presently does.

      1. Rik Keller

        Don:

        1) As I stated,  I am responding directly to Mark West’s statement that we need 1,000 acres of commercial development to address the city’s current budget problems and taking it at face value. again, we should not be considering proposal like MRIC in a piecemeal fashion, but they should be part of a General Plan visioning process for what the city wants to be. My calcs show what Mark’s vision for the future of Davis ends up being.

        2) Supposedly these jobs are for local benefit, so we need to assume a certain amount of population growth. My assumptions are that Davis needs to be more in-line with regional averages so that we are not just serving as a jobs center with some of the longest commute times in the region, and that we also need to provide adequate workforce housing.

        3) In contrast, you apparently don’t think that the city has a responsibility to adequately provide housing for its workforce and they should just live elsewhere and other jurisdictions should pick up the slack.

        4) My solution is to first realize that we are not going to be able to build our way out of the problem.

        5) if you were interested in really looking at the City fiscal impacts for MRIC, you would have realized that the documentation that is currently available far overstates the land valuations and thus City revenues.

        1. Don Shor

          2) Supposedly these jobs are for local benefit, so we need to assume a certain amount of population growth.

          Nope. The voters control the population growth. And local benefit includes the surrounding communities.

          My assumptions are that Davis needs to be more in-line with regional averages so that we are not just serving as a jobs center

          Your assumption is either flawed or unachievable, and irrelevant to the decision about MRIC.

          3) In contrast, you apparently don’t think that the city has a responsibility to adequately provide housing for its workforce and they should just live elsewhere

          They do live elsewhere, and will continue to do so. We couldn’t build enough affordable housing in or near Davis to provide local housing for the people who work here, for the most part. Davis is part of a regional housing market. People who work in Davis live presently in Dixon, Woodland, West Sacramento, and even further afield. That’s how things work pretty much throughout California. If you want to make it easier for them to work here, focus on public transportation.

          if you were interested in really looking at the City fiscal impacts for MRIC, you would have realized that the documentation that is currently available far overstates the land valuations and thus City revenues.

          I am quite certain that it is greater than zero, which is the present net revenue from the site to the city.

        2. Rik Keller

          Don:

          Let’s look at the documentation of potential city tax revenue generation of the MRIC proposal in more detail. David Greenwald has previously said ““Let’s suppose we can get $5 million a year from just one innovation center…” This is fiscal irresponsibility. Total “field of schemes”/pie-in-the-sky wishful thinking not grounded in reality.

          [First of all, it should be stated as a caveat that–as Matt Williams has pointed out–the following data is from a report that has never been publicly vetted. I do mention some very strange assumptions that need to be examined far more closely, and I’m sure there will be others reveled with a closer reading. (“The FBC was primed and ready to ask questions like that one in April 2016 when the EPS analysis of MRIC was scheduled to be heard by the FBC, with staff, EPS, Plescia, Godwin and the MRIC development team all present.  But that never happened because the MRIC development team withdrew their application. (Matt Williams, 12/9/2018)]

          One key thing that gets glossed over in looking at estimates of net City revenue generation is that the baseline MRIC proposal includes a hotel, and when taken away in a comparison alternative the net City budget revenue gets reduced by 33%. Take away the ancillary retail component of the project and you probably lose another 15-20% from there.

          Those uses are not connected to a the research park component, could be located elsewhere in the city. Including them in the analysis just makes the research park component look like it is producing a lot higher returns than it is.

          David Greenwald has in the past repeatedly characterized the EPS analysis as “conservative” without providing information to back this assertion  up. Just as one example of strange, seemingly non-conservative assumptions in the report, the industrial/manufacturing component is assumed to be valued at $250/sf for tax assessment purposes. This valuation is very high with regional industrial space sales prices in 2018 around $90/sf. http://www.kiddermathews.com/downloads/research/industrial-market-research-sacramento-2018-2q.pdf

          Note also that market rents for the Davis/Woodland submarket are well below the regional average at $0.32/sf monthly compared to $0.48/sf.  That’s equivalent to only about $60/sf sales value for industrial properties, or 25% of the number in the EPS report. With the industrial component at about 35% of the total project square footage, a more realistic valuation of that component would reduce the projected City fiscal benefits substantially.

          Similarly, the flex/office valuation in the EPS report likely overstates a realistic valuation more in line with regional averages of around $160/sf rather than the $245/sf figure used in the report.

          Why is industrial land valued at 4-5x the going regional rate? That one figure (along with valuation of office/flex space is inflated but not as dramatically so) changes the revenue calculations dramatically.
          Additionally, both Don Shor and the Davis Vanguard have neglected to describe the larger context and impact of the project. For example, there are 5,800 projected employees (in the “no hotel” alternative). And the EPS report projects a total of 10,300 local jobs that will be created due to the project. Translated to local households, to provide housing for employees at the current jobs-household ratio of 1.2 (Davis has a higher jobs-household ratio than the regional average and therefore already underprovides workforce housing), that would mean a population growth of about 21,500 (at current 2.5 persons/HH). The fiscal costs and impact of this population increase are, of course, beyond the narrow scope of the EPS report.

          Looking at just the research park component of the project and using more realistic projections, at build-out decades down the road, it would likely have a net positive City fiscal impact significantly less than $1 million/year (realistic land valuation assumptions would be about 1/3 of this), a small fraction of the current $8 million shortfall in the City’s budget. It would also induce population growth at 30% higher than existing levels. Those are extremely modest gains for a very large impact. And the fiscal impact of that population increase, of course, has not been taken into account at all.

      2. Ron Oertel

        Don:  “MRIC is surrounded by ag-conserved land and freeway, so it doesn’t promote sprawl.”

        MRIC is sprawl, itself.  And, will likely create additional sprawl elsewhere.

        It is unbelievable to me, that folks are pushing for developments that will put even more strain on an already-overwhelmed I-80. But then again, that’s nothing new. What is new is that the impact is spreading to roads adjacent to I-80, as a result of cell phone applications, complicated by the “Mace Mess”.

      3. Alan Miller

        Building MRIC would not add 109,000 people to the city’s population, or even 20,000 people using your math (200 acres = 20% of your total).

        But whatever it doesn’t add to the city’s population, it will add to I-80’s traffic, minus a tiny number that may take public transit.

        1. Rik Keller

          Keep in mind that at the same time the Don Shor is saying we don’t have to provide housing for the new employees at MRIC, the projected fiscal impacts of MRIC in the EPS study are based on the assumption of the employees actually living in Davis (and a substantial portion of their retail spending in Davis, etc.). Therefore, based on Don’s vision of serving as a job provider to other communities in the region, the positive fiscal impacts on City revenues from MRIC would be substantially less than even the highly inflated numbers in the EPS report (see my detailed analysis of the actual realistic fiscal benefits elsewhere in the comments.)

        2. Ron Oertel

          Alan:  I believe that yards have been “outlawed” for new residences, in Davis (and probably beyond Davis, soon enough).  The only opportunity left for landscapers is to create plant screens in an attempt to filter out toxic air. 😉

    2. Ron Oertel

      Don:  “Adding jobs doesn’t add population to a particular city.”

      It is almost certainly going to attract additional population to a given city/region.  That’s why there’s a “housing shortage” (especially Affordable housing) in the Bay Area, but probably not in Tulsa, Oklahoma (or in other vast areas throughout the country).

      It’s also creating a situation where lower (and even middle-income) folks can no longer afford to live in many parts of the Bay Area.

      Davis is already an “employment center”, in the form of its adjacent UC. That’s why there’s a net influx of commuters.

      Sacramento is also an “employment center”, for many residents from Davis and throughout the region.

      1. Don Shor

        Davis is part of a regional housing market. Ask the next ten people you meet where they live, where they work, and why. We will not solve the “jobs/housing imbalance” ever because Davis is considered a nice bedroom community for Sacramento with good schools. Some of the people who work at MRIC will be local residents, some will commute in. None of that is particularly relevant to the decision to develop MRIC or not.

        1. Rik Keller

          Don Shor said: “Some of the people who work at MRIC will be local residents, some will commute in. None of that is particularly relevant to the decision to develop MRIC or not.”

          Of course it is relevant! And it is incredibly irresponsible for you to suggest otherwise.

          1) It is critically important whether we are trying to provide jobs for local residents or whether we just want to provide jobs to the rest of the region, continue the pattern of some of the longest commute times in the region, and massively  increase impacts on local roads.

          2) We need to have a full analysis of the impacts of the project in order to provide an adequate knowledge-base for decision making. This includes all secondary and tertiary impacts, induced growth, etc.

          3) The City’s own policy calls for it. Look the the City of Davis General Plan policies that I posted elsewhere in this thread:  “Key considerations in such re-designation or rezoning shall include the timing of these potential development(s) and impacts and demands caused by these potential developments on the City and the Davis community. Impacts to address include, but are not limited to: traffic, water, housing (for example, growth demand), schools, effects on neighborhoods, and economics (for example, cost benefits and cost generation to the City)”

        2. Ron Oertel

          Don:  You sidestepped the fact that the point you initially made is 100% false.

          Adding jobs ultimately attracts population to a city and region.  Some folks even move to an area specifically because of a job offer/recruitment.  In fact, that’s what initially allowed Davis to be “graced” with my presence from elsewhere, years ago.  Well, that coupled with the fact that I was effectively priced-out of my original home town.

          I suspect that UCD itself attracts employees who moved to the city or region from elsewhere, specifically because of job opportunities. The same thing is likely true, regarding some of the local private employers.

        3. Ron Oertel

          Craig:  Without repeating all of the arguments (either in support of, or opposed to pursuit of additional growth and development), I think the answer is that it ultimately depends upon what one values, or believes is important for the city and region.

          I’d really suggest just leaving it at that, else the conversation is in danger of starting over from the beginning, again.

        4. Rik Keller

          Don Shor: you are proposing that—in a town that is already not adequately providing housing for its workforce—we should provide housing for our workforce even less? Just let other surrounding jurisdictions take care of it, add to regional VMT, etc.?  Oh, and some mythical public transit system will magically be built? That’s a terrible city planning vision.
          If you don’t think that employees of a future Davis research park will be or should be Davis residents, one wonders what you see as the greater purpose of pushing for a research park in Davis to primarily employ the residents of other communities.
          Keep in mind also that the fiscal impacts in the EPS study are based on the assumption of the employees actually living in Davis (and a substantial portion of their retail spending in Davis, etc.). So based on your assumptions, the positive fiscal impacts on City revenues will be substantially less than even the highly inflated numbers in that report (see my detailed analysis of the actual realistic fiscal benefits elsewhere in the comments.)
           

        5. Rik Keller

          Nice backtracking, Mark West. I’ve done you back of the envelope calcs for you so you know what the economic reality actually looks like. You’re welcome.

        6. Rik Keller

          Actually Mark, you provided an estimate (sourced from someone else) about the level of commercial development need to address the City’s problems. I provided a reality check on those numbers and demonstrated how/why we can’t build our way out of the problem.

        7. Mark West

          I didn’t backtrack at all Rik. I just pointed out your dishonest approach to interactions here.

          You do have an impressive imagination and might make a career as a fantasy writer…

          Don has done a good job demonstrating where your assumptions are wrong, and why that impacts the value of your conclusions.

        8. Rik Keller

          Mark: since you have now backtracked on your comment that we need 1,ooo acres of commercial development to meet city needs, what is your revised stance on how much research park development the city needs? Please support with actual data.

          While you are at it, please provide documentation for your claim that

          “The current General Plan (circa 2000) calls for 200 additional acres of commercial development over the subsequent 10 years (2010). None of that was created…”

           

        9. Rik Keller

          Mark: all I see is a string of insults from you. Why are you avoiding the actual discussion? And why are you presenting data on here that you apparently don’t believe in?

          Still waiting for the documentation of your General Plan claims. Or was that also just something that you overheard from someone else and didn’t bother to verify?

        10. Mark West

          Rik Keller

          The only thing that I have stated about you is that in my opinion, you are dishonest in your approach to the conversation here. For instance, you misattributed my position in your zeal to create a strawman to attack, and when I called you on it, you attacked me further by stating that I had ‘backtracked’ from my positions along with other similarly petty and inaccurate comments (“a string of insults”…” avoiding the actual discussion”…” presenting data…you apparently don’t believe in?”).

          In contrast, when I made a statement about how you opposed new housing, you corrected me by stating that you support affordable workforce housing. I accepted your assertion without further challenge. I am sure in due time we will have an opportunity to assess the validity of your claim, but for now, I have no reason to doubt you on that topic.

          I believe your approach to interactions here is dishonest. When you subsequently repeat your attacks after having been corrected, you are being intentionally dishonest. There is an agreed-upon term to describe those who are intentionally dishonest. I’m certain you know what it is, so there is no reason to repeat it here.

           

           

    3. Mark West

        “since Mark has not provided those back of the envelope calcs”

      I didn’t do the calcs so I have nothing to post, I just reported what was posted here by another commenter. It was intended to simply provide ‘ball park’ estimate to aid the discussion at the time.

      “So Mark’s “solution” “

      It is so nice of Rik to tell me what my ideas are.

      The only ‘solution’ I have proposed is the need to expand our commercial sector so as to improve our tax base. Everything else that Rik is attributing to me in this discussing is a product of his own imagination.

  12. Ron Oertel

    104 comments, now. Plus 6 that were apparently deleted.

    Without even a proposal!  And this time, I’ve largely refrained!

    Seems like a battle-is-a-brewin! Or, will it be outright war? 😉

     

  13. Ron Glick

    “Ron Glick: do you have documentation of the fiscal projections for the City regarding the property you mention?”

    I phoned a friend this was his response:

    We realized that the City’s share of the property tax would not be sufficient for generating the types of revenue the City should be receiving from the project.When we were looking at the Mace Project, we always assumed that we would be putting in a supplemental tax district of some sort that would be based on the total square footage that was built.At build out, we assumed the special tax would generate in the range of $5 million to $10 million per year (i.e, a couple dollars per square foot per year, adjusted each year for inflation.)For example, in Mountain View, the City leased land to tech companies back in the 1990s, Google took over a good chunk of that land and the City now generates significant revenue from the lease payments each year.

    1. David Greenwald Post author

      Yes. That’s a point I’ve made in the past, about a $2 per square foot CFD is what the city was contemplating at the time.

    2. Rik Keller

      Thanks for the follow-up, Ron G.

      The statement from your friend that “the City’s share of the property tax would not be sufficient for generating the types of revenue the City should be receiving from the project” is interesting. The fiscal analysis done for MRIC doesn’t describe any type of special tax district at all. And as Don Shor and I discuss elsewhere in this thread, when you take out the hotel/retail uses on MRIC (they have no reason to be there in particular) and just leave the research park, and after accounting for impact of induced residential development likely fiscal impact in the city budget is minimal.

    3. Rik Keller

      Speaking of Google & Mountain View and leases, here’s two articles on how tech companies have gotten away with paying insanely low property taxes in some cases:

      https://www.nytimes.com/2012/02/24/us/california-property-taxes-can-vary-wildly-in-silicon-valley.html

      “This is because in 1978 California voters passed Proposition 13, a ballot initiative that allows state and county government to increase the tax rate on commercial and residential properties based on the value of new buildings constructed, but forbids government to reassess a property’s underlying land to full market value without a change of ownership….The result is that in a time of deep cuts to education, health care and other state services, valuations on commercial property are inconsistent and sometimes strikingly low. For example, according to county records, the assessed value of one 13.7-acre tract underlying part of Google’s headquarters is $789,635, producing an estimated tax rate of 1.3 cents a square foot, far less than most neighboring properties.”

      https://arev.assembly.ca.gov/sites/arev.assembly.ca.gov/files/hearings/Goldberg_Testimony_3-12-12.pdf

       

  14. Ron Oertel

    Below is an article regarding the challenges that biotech companies face in the region, regarding raising their ability to attract capital.

    Lots of luck squeezing blood out of this turnip.  (Unless the “real goal” of including housing is allowed, of course.)

    https://www.davisenterprise.com/business/davis-based-company-hosts-meeting-of-biotech-executives-discussing-capital-challenges/

    Probably better-off growing actual turnips. At least they provide a nice buffer, for the city. And, they don’t add even more gridlock on I-80 and its access points.

    1. Ron Oertel

      To clarify, the article above discusses biotech’s lack of ability to attract capital for such endeavors (in this region), which is apparently viewed as high-risk.

      1. Rik Keller

        Realistically, rather than squeezing extra tax dollars out of research parks, jurisdictions are pumping money into them in the form of tax breaks to try to make them viable:

        “University of Kentucky officials are hoping that a tax break will spur a new wave of development at the school’s Coldstream Research Park, which still has vast empty spaces. The Lexington Herald-Leader reports the Lexington council has approved the tax break. It would let developers keep up to $32 million over 20 years for building on portions of the park.” https://www.seattletimes.com/nation-world/uk-hopes-tax-breaks-will-spur-development-at-research-park/

        And yes, when the promised development doesn’t pan out, you get the classic bait-and switch:

        Last year, the city approved changes that would allow UK to use as much as 15 percent of its research park for retail developments, apartments or town houses. The changes also allow for more density by requiring less green space around buildings and increasing maximum building heights.

        UK officials have said that adding residential units will allow it to attract more businesses to the research park, which still has vast empty spaces nearly 30 years after it was first proposed. Isolated industrial and research parks are outdated because people want to live, work and shop in the same area, UK officials have said.”

         

        1. Ron Oertel

          Rik:  Not to mention the “innovation center” planned at UCD’s medical center (Aggie Square), which I recall is dependent upon land provided by UCD (as well as public subsidies from Sacramento, etc.).  For awhile, I recall that David was essentially holding this up as something that Davis “missed out” on. (Also ignoring that it’s connected with the medical field I understand, making it more appropriate for a location next to UCD medical center.)

          Commercial development is generally looked at from a regional perspective, by investors.  And yet, they’re not exactly popping up all over, especially not without housing included.

        2. Rik Keller

          Commercial development is generally looked at from a regional perspective, by investors

          Yes. And yet the EPS study for MRIC shows a valuation for the industrial/manufacturing uses at $250/sf for tax assessment purposes. This valuation is very high compared to regional industrial space sales prices in 2018 around $90/sf. http://www.kiddermathews.com/downloads/research/industrial-market-research-sacramento-2018-2q.pdf

          In regards to Aggie Square, I guess the CIty of Davis “missed out” on subsidizing a research park: “McCarty said it would eventually cost “tens of millions, if not hundreds, for this to be implemented.” Steinberg also said that city will be expected to contribute, and May agreed that the university will raise money for the project.”
          https://statescoop.com/uc-davis-partners-with-sacramento-to-open-innovation-hub/

           

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