The guest column by Tim Keller on Monday definitely drew a lot of comments. But there is a key point that got missed in the back and forth, and that is the point that we learned when the city of Davis at the beginning of 2019 inventoried the availability of commercial space in Davis, and the point that Danielle Casey drove home two weeks ago during her presentation at the Vanguard event: we don’t have space in Davis to do economic development.
You can argue that there isn’t commercial demand, you can argue that innovation centers across the country have failed or underperformed, but at the core for most people – this is about creating space.
As Tim Keller put it, “Off-campus innovation space is the single place where we have most failed to live up to our end of the deal as hosts to a research institution.”
He adds, “Without R&D Space, all of that investment in research has a very hard time making it to market – and if it does, it is usually because the founders migrate towards the bay area.”
Here’s the thing – investors whether it be the developers of the ARC (Aggie Research Campus) or people like Tim Keller are willing to put time, energy and most importantly money behind their bet that innovation and economic development in Davis can work.
This is the point that Danielle Casey made when I asked her how the region views Davis from the standpoint of economic development.
“When we work with firms that are looking at coming into the region, they’re looking at expanding, it has already been said in terms of certainty… We have innovative companies that are looking at connecting with Greater Sacramento. I’d say, for the most part, Davis isn’t even considered because they’re going to do a look at a requirement in terms of commercial space availability and they’re just not finding it,” she said.
“They don’t even see it all,” Danielle Casey said. “So you’re not even getting a look to begin with.”
And the other point she made – UC Davis is a huge selling point. She echoed the comment of Barry Broome , that “they see it as an untapped resource but also as the gateway to Silicon Valley.”
She noted, “The perception (of UC Davis) is very high.”
Forget all the fancy words, forget about research campus, forget about an innovation park, this is about creating space so that a company looking to come to the region will consider Davis because they want to be in that space.
Both Rochelle Swanson, the former councilmember, and Danielle Casey made the point that companies will pay a premium to move to places like Davis because they have the campus connection and the access to a world class labor force.
But as we know from the city’s presentation in January, Davis lacks the space. The city has about 120 acres of undeveloped commercial space, but a lot of that is either unavailable or tied up. The reality is that number is really about 50 and most of it in relatively small parcels.
That’s important. It is why Bayer/AgraQuest left. It is why Schilling Robotics will announce this fall it is leaving. And it is why companies looking to the Sacramento Region – that are of any reasonable size – are not looking at Davis.
You can argue that this means there is no commercial demand for Davis. But that is flat out a false conclusion. How do we know? Start with Mori Seiki. Too far in the past? How about Mars coming to downtown Davis for a small but important lab on G Street? How about ADM (Archer Daniels Midland Co.) coming to URP (University Research Park)? How about Fulcrum investing millions in the University Research Park, Sierra Energy investing millions in their new technology and innovation space, Nugget picking Davis for its new headquarters? How about the two hotels about to open in Davis that will lead to hundreds of thousands in TOT (transient occupancy tax)?
Even without a lot of space to offer, big companies like Mars and Archer Daniels Midland are looking our way. Investment companies like Sierra Energy, Fulcrum and now Ramco are willing to bet millions on this market.
What happens without space? Tim Keller discusses that. In 2008, he won the Big Bang competition at UC Davis with VinPerfect. Seems like a good company for Davis – innovating technology to improve wine making and packing.
But he writes that “when I started VinPerfect, it was clear very quickly that we were not going to be able to stay in Davis. I needed a laboratory and I needed space to prototype my products – and that simply didn’t exist here – so we were forced to leave.”
That is a familiar story, as one of our commenters yesterday pointed to the announcement of 14 new startups at UC Davis.
A previous year startup has transitioned from product development to commercialization: “Sage Therapeutics received U.S. Food and Drug Administration approval of its product, Zulresso (brexanolone) injection, for the treatment of postpartum depression in women.”
As the commenter pointed out, they have an $8 billion market cap. But here’s the thing: “An $8 billion dollar company spun out from technology developed at UC Davis but now headquartered elsewhere.”
If we had the space would that company have stayed? The reality is there are never guarantees on these things, but there is one guarantee I can make – without space, it will be much harder for companies to stay here and most bigger companies will, as Danielle Casey put it, not even give us a look.
Tim Keller’s announcement on Monday is important. It shows that companies are looking at ARC as a potential landing spot and a place where they are willing to place their bets.
All we need is some space and an opportunity to make this happen.
—-David M. Greenwald reporting