Guest Commentary: Aggie Research Campus – Our Best Chance to Support the University We Love

by Tim Keller

One of the things that unites all Davis residents is our pride in UCD. It drives our economy; it is why we have such a diverse and well educated population, and it gives us the cultural vibrancy that you expect of a college town.

But that label: “College town” doesn’t do it justice. The United States has more than 3,000 colleges – but only 130 research universities. UC Davis is in the top 20 of those universities and is #5 among the public research institutions – drawing in more research funding than even UC Berkeley.

We have every right to be proud of UC Davis, but that pride also comes with a responsibility. The city is a host to the university, and we are partners in its success, but in one critical area we have continually fallen short: Space for campus technologies to transition into “the real world”

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. 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.

This is why when I heard that the Aggie Research Campus (ARC) was going to be back on the agenda for the City, my immediate responses were “Its about time!” and “how can I help?”. This is our chance to live up to our end of the deal as hosts to a powerhouse research university. By providing a place where those technologies can access the space and equipment they need to efficiently commercialize.

I know first hand what happens without a space like ARC. In 2008 I won the UC Davis “Big Bang!” business plan competition which launched my company VinPerfect. – A packaging technology that allowed screwcap wine closures to “breathe” giving the winemaker perfect control over how that wine ages over time.

But 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’s why I took it upon myself to create the kind of resource that I wish I had when starting VinPerfect: A shared space with lab equipment and prototyping equipment that could be used by a number of R&D based companies and keep costs low. That space is Inventopia, which is home to 14 startups all crammed into 1800 square feet next to the DMV.

Inventopia is what is called a “tough tech incubator”; a place where resource-intensive technologies can efficiently do the work they need to get to market. And the idea behind it isn’t new. In fact, all of the other top-tier research universities have major facilities like this: all except UC Davis.

The ARC will change everything. It will include dedicated incubator space for organizations like Inventopia as well as highly flexible commercial space for companies to move into as they gradually scale up. The open space in ARC will be home to highly-instrumented agricultural test plots and pads for testing renewable and sustainable technologies.

These are not things that are going to be produced anywhere else, and they are critical to the success of UC Davis Research. So I am excited to support the Aggie Research Campus, and I ask you to support it too. It is long overdue, and it is the single greatest thing we the voters of Davis can do to support the University we love.

Tim Keller is Executive Director of Inventopia


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83 Comments

  1. Alan Pryor

    I agree that start-ups will always need small spaces at dirt cheap rental rates until their technology can be commercialized and investor money starts to flow. That’s the nature of start-ups. And  I applaud the author for providing exactly such space to new ventures in the aging, low-rise commercial space on 5th St. –  apparently for only $150/mo each according to a recent Enterprise article.

    But it is hardly likely that such low-end, dirt cheap space will be available to start-ups at ARC if it is ever built out. ARC will be all new, high-end construction focused only on providing large spaces for established companies wanting to move into Davis or for growing, well-funded existing Davis companies wanting more space in town. It will require sky-high rents or lease payments simply to allow the money behind the project to get a return on their high costs of new construction and the high property tax rates that will result from the high build-out costs.

    While ARC may free up a little commercial space in Davis for start-ups resulting from mid-sized companies in Davis expanding and moving into ARC, the economics of the ARC project ensure that no dirt-poor start-ups of the type fostered by Mr. Keller will ever be able to afford to move there right out of the chute.

    Citizens of Davis may or may not want ARC built out for a variety of reasons. But it is disingenuous to claim that ARC will suddenly provide a cheap home for fledgling new start-ups. Such start-ups will never be able to afford high-end space at ARC and they will always flock to dirt-cheap existing commercial space to satisfy their need because that is all they afford. As I said, that is the nature of start-ups.

    And I also find it disingenuous to claim that Davis has an obligation to provide high-end space like ARC to companies because we “owe” it to UCD. UCD enjoys a lot of free rides from the City of Davis compared to the precious little economic benefits we derive from its presence. I would say UCD owes more to the City than the other way around.

    1. Tim Keller

      I’d like to directly address question of whether inventopia will be able to help startups at ARC.

      It is true that startups tend to seek out cheaper real estate.  Thats what I had to do with my last startup.  But that is what happens when they are directly leasing their own space.

      Inventopia on the other hand, is essentially an industrial / scientific co-working space.  We have a lot of very expensive equipment and resources; but none of our startups uses those resources all of the time – so it is quite effective to share.  And it is how I am able to serve 13 startups in less than 2000 square feet of space!

      Just as the co-working model has allowed freelancers and startups to inhabit very nice professional space in facilities like the Urban Hive and any of WeWork’s locations – Inventopia is doing the same for the R&D intensive startups.  This model works because the sharing of space means we can pay the higher-end lease rates. So startups get better facilities AND they pay less.. Win-Win.

      Aside from this fact, Alan would be correct.  Calling a commercial real estate development a “technology park” by itself doesnt do anything for startups unless there is a business model on the ground that is designed with startups in mind.  There are a lot of developments like that, who use the language of innovation to describe what is in fact, just another commercial space.

      Lets be clear – I wouldn’t be in support of the ARC if they were not making space for UC Davis startups.  But they are, and in my experience trying to support the startup community here, we cant get that space quickly enough.

      1. Ron Oertel

        Seems to me that your business would easily “fit” into existing space/sites within Davis, even if it quadrupled in size.

        It also seems that startups which are truly on the verge of going “big” end up in places like the Bay Area, where capital and other businesses already exist. (Sort of the “holy grail”, for some.)

        And for ag-related industries, there’s no shortage of space/opportunities in the region.

        1. Rik Keller

          Ron O.: let’s not forget that the projected rents in the draft non-vetted fiscal impact analysis produced a couple years back for MRIC are at much higher rates than the then-current market rates for similar industrial/warehouse/flex office/research space in the region. This was done to boost the apparent positive fiscal impact to the City budget. But, of course, these rent levels would also completely price out the start-ups that it is now being argued that the development would serve.

        2. Tim Keller

          Seems to me that your business would easily “fit” into existing space/sites within Davis, even if it quadrupled in size.

          It only seems easy because you don’t understand what is involved.  Lab space is expensive to build and difficult to find already built,  Industrial space is difficult also.  For our existing location we lucked into finding an existing lab next to an existing shop space, and we lucked into a superstar of a nice landlord (Sam Harrison) who was willing to take a chance on us.

          Inventopia, (once we have room for it) also plans to have an open-to-the-pubic maker space, and arts space and facilities for teaching manufacturing technologies to vocational students.  We currently cant do either at our small existing location, nor can we help any of the various companies that have larger projects.

          A great example is RePurpose Energy.   They take end-of-life batteries out of Nissan Leaf’s to build systems to store solar power for use after dark.   They have a bench at inventopia, but I cant accommodate their battery huge modules, much less the shipping containers they build their systems in.

          Do we want to be using stored solar energy after the sun goes down rather than defaulting back to natural gas?  Then we need to make it so that these kind of people are spending their time developing this technology – not fighting for a place to do it.

          And for ag-related industries, there’s no shortage of space/opportunities in the region.

          This is simply untrue.

  2. Rik Keller

    https://www.chronicle.com/article/Enough-With-All-the-Innovation/245044

    “One can be excused for asking the obvious question, then: What evidence is there that any of this very expensive innovation and entrepreneurship stuff works — that is, rewards students with fulfilling, well-compensated careers, while generating revenue for the institution (not to mention “changing the world”)?

    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

        McCann: you actually did no such thing. His is a study that involves hundreds of real life case studies across dozens of regions. And all you had to offer were opinions that didn’t refute his detailed findings in the slightest.

      2. Rik Keller

        McCann if you really think you “rebutted Levine’s study,” you should go out and get yourself a book contract! All these other researchers are backing up and extending Levine’s findings and getting some of that sweet sweet $.

        “The Campus Innovation Myth” (June 2019)
        https://www.chronicle.com/interactives/20190611-vinsel

        Matthew Wisnioski and Lee Vinsel are professors of science, technology, and society at Virginia Tech. Wisnioski is a co-editor of Does America Need More Innovators?, just out from MIT Press. Vinsel is writing, with Andrew Russell, a book that is tentatively titled “The Innovation Delusion.”

         

    1. Tim Keller

      Looking over the article Rik linked, I find myself agreeing.  There is a LOT of hype about innovation all over the country, and a lot of people spending money on programs that try to spur innovation, and Im sure a lot of that money is wasted.

      Such is the risk when people try to “program” innovation from the top-down.  It just doesnt work.  Unless there are talented people out there with great ideas who are willing to take the risk of starting something new – then all of the TED talks and workshops in the world wont get you an ounce of benefit.

      But that is NOT the problem we have in Davis.  We, in fact, have an abundance of intellectual capital, and talent.

      If we want our professors, our post-docs and grad students to be able to take what they develop on-campus and translate it into the real world, then we need to provide a space for them to do it.  And the university cannot (by law) do this kind of work – which is why they create and support partnerships like the university’s DRIVE network of which Inventopia is a member.

      So yes, I would agree that innovation is over-hyped in many many places in the world.  Here in Davis CA however… it is most definitely not.  In fact it is the thing that we have the biggest opportunity to excel in.

       

  3. Rik Keller

    The Effects of Academic Incubators on University Innovation, Christos Kolympiris Peter G. Klein, (19 December 2016)
    “In this article, we analyze the impact of academic incubators on the quality of innovations produced by U.S. research‐intensive academic institutions. We show that establishing a university‐affiliated incubator is followed by a reduction in the quality of university innovations. The conclusion holds when we control for the endogeneity of the decision to establish an incubator using the presence of incubators at peer institutions as an instrument. We also document a reduction in licensing income following the establishment of an incubator. The results suggest that university incubators compete for resources with technology transfer offices and other campus programs and activities, such that the useful outputs they generate can be partially offset by reductions in innovation elsewhere.”

    1. Richard McCann

      So, where do the universities’ innovations go? Is there a reason why those innovations can’t be captured by firms located near a university? Note also, this study was about university-affiliated incubators. It’s not clear how ARC will be set up and whether it will be drawing directly on UCD resources.

      Finally, here’s a key quote from the abstract:

      ” It follows that measuring the net economic effect of incubators is challenging because besides the effects on innovation efforts, the presence of an incubator may attract particular kinds of faculty and students, enhance the prestige of the university, generate economic multiplier effects, and benefit the community as a whole.”

      1. Rik Keller

        MvCann: you clearly haven’t read the whole study. This are possibilities that are put forward. And yet the conclusion is that  there are no measurable effects that can be found. Just a lot of wishful thinking.

        1. Bill Marshall

           And yet the conclusion is that  there are no measurable effects that can be found.

          Looks like a two edged sword… in layperson’s terms, ‘might hurt, may help’… ‘your mileage/investment results might vary’.  “Mixed bag”.  “Inconclusive”. Caveat emptor.

          Acknowledge your points, in that quoted post…

  4. Rik Keller

    http://cityobservatory.org/21st-century-snake-oil/

    “…But puffery and self-dealing are nothing new on the technological frontier or indeed, in the world of economic development.”

     

    “Around the country, dozens of cities and many states have committed themselves to biotech development strategies, hoping that by expanding the local base of medical research, that they can generate commercial activity—and jobs—at companies that develop and sell new drugs and medical devices. There’s a powerful allure to trying to catch the next technological wave, and using it to transform the local economy… of course, it hasn’t worked out.”

     

    1. Richard McCann

      I agree that cities that try to introduce a whole new technology with no supporting industry agglomeration are likely to fail. Think semi conductor production in Kansas.  But the researchers need to ask a different question of what were the starting conditions in each case and how did that affect the outcomes?

      Your critiques fail to address the most important question: how does local business development occur with concentrations in specialty areas? And it’s not spontaneously and by accident.

  5. Craig Ross

    I find it really funny – people with money are willing to put millions behind these projects, but people like Rik Keller think they know better based on the 10 to 15 year old research of Marc Levine – most of which was during the Great Recession.  The world is a different place.

    The question people have asked is whether there was an anchor tenant for this proposal.  The answer now is yes.

  6. Ron Glick

    Forget all this theoretical back and fourth. Let’s look at real examples like the Fourteen touted here:

    https://www.davisvanguard.org/2019/07/14-new-startups-emerge-from-uc-davis-innovations/

    Included among them is Sage Therapeutics that now has an $8 billion market cap. That is not a typo. An $8 billion dollar company spun out from technology developed at UC Davis but now headquartered elsewhere. Other examples are abundant beginning with the tomato harvester, Calgene and the strawberry collection. Outside of  UC Davis we have Agraquest, Marrone, Schilling and Arcadia.

    If you want to know what is going on take a look at this website:

    http://www.seedcentral.org/calendarofevents.htm

    The opportunities abound. The question is will Davis capitalize on UCD’s innovation or give it away to other places? Will it be like Xerox and the Graphic Interface aka the mouse that it gave away for nothing to Apple. Or will we be like SanFrancisco that got Genentech after it was started by guys from UC Berkeley?

  7. Ron Oertel

    Regarding Genentech, are you referring to that outpost that’s contributing to sprawl along Highway 505?

    There’s a 2-million square foot facility planned in Woodland (7 miles from UCD, via a freeway that’s still moving at this point), along with all of the accompanying sprawl associated with these developments. This includes 1,600 new homes, in addition to all of the other sprawl occurring there.

    Not to mention West Sacramento, Dixon, etc.

    1. Don Shor

      Regarding Genentech, are you referring to that outpost that’s contributing to sprawl along Highway 505?

      Probably we need to straighten out this misconception. My recollection is that Genentech was going to locate a facility in Davis, but instead chose to open that particular facility in Dixon. This has been construed at times as a loss for Davis.

      Various reasons were given for their decision at the time, but one of them likely was that the new facility was to include animal testing. At the time, animal rights activists were routinely demonstrating around the Davis area, holding frequent rallies near the UCD Primate Center.
      For a long time, you couldn’t actually find the facility in Dixon, but it is there. No sign out front, nor any evidence of what is in the building that you do see, nor will you casually walk up to the front door.
      They already had a facility near Vacaville which they purchased in 1994. That is what you see along the highway. The closer proximity of the new site to that facility, and the cheaper land in Dixon, were undoubtedly also factors in the decision to locate there. But the protest climate in Davis was said to be a serious factor in the consideration at the time.

       

      Edited to add: I am surprised to find this old article from a defunct Dixon blog still available. It affirms what I had heard.
      https://patch.com/california/dixon/bp–what-genentech-didnt-tell-us-when-it-came-to-dixon

    2. Alan Pryor

      Speaking of sprawl and traffic, the 800 lb gorilla that nobody is talking about is how ARC will impact traffic on Mace Blvd which has become the most congested roadway in Davis by far. Locals already complain of 30+ minute routine delays to get from South Davis onto the freeway from Mace and 20+ minute delays getting from North Davis onto the freeway at the height of afternoon rush hour. The traffic study in the EIR stating no unmitigatable impacts used traffic count data from 8 years ago.

      See New Mace Blvd Traffic Study Needed Before Making any More Changes (https://www.davisvanguard.org/2019/07/new-mace-blvd-traffic-study-needed-before-making-any-more-changes/)

      1. Bill Marshall

        Most folk, in my experience, perceive a 3 minute delay as 20-30 minutes… perception and frustration as to not have everything happen in a “New York minute” (on their terms)… 20-30 minute delay on Mace is not even close to being credible… but, have to consider the source of those #’s… they are likely not credible, as those who repeat and cite them…

        Just saying… as someone who has used Mace frequently and recently… it’s bovine manure, unless someone can cite actual studies… done by folk who are qualified, as to queues and delay… I’ll burn a wet log tonight in the fireplace …

  8. Ron Oertel

    “A group of CEOs and executives representing nine biotech companies in the greater Sacramento area met on Jan. 16 to discuss ways to overcome the current shortage of high-risk investment capital available for life science enterprises in the region.”

    “Success stories involving capital sourced locally from the Sacramento area, however, remained conspicuously absent from the group’s conversation.”

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

  9. Bill Marshall

    You are correct… Genentech was looking fairly seriously @ the Covell Village site… I was involved in some of the talks… I knew about it in my professional capacity

    You are also correct as to the “community” (aka ‘activists’) context… and the “no-growthers”…

    ‘Covell Village’ property is not within the City… County… added complications as to ‘revenue sharing’ agreements…

    At the time there were issues about some of the property being in the flood zone.

    Multi-faceted ‘issues’, so Genentech chose Vacaville, at that time… much simpler, and time was important as to what they needed to do.

    1. Ron Glick

      Yet Genentech recruits from UCD as do other biotechs in the little biotech production hub in Vacaville.  Many people live in Davis and commute to Vacaville at these plants adding to traffic that could have been local.

  10. Rik Keller

    “The Campus Innovation Myth” (June 2019)

    https://www.chronicle.com/interactives/20190611-vinsel

    “Myth 1: Universities Are Economic Engines

    Other universities and localities make often dubious attempts to emulate those successes, using policy, planning, and funding to create “technology clusters” from the ground up….Such efforts rarely succeed…

    Myth 2: Universities Make Innovators….

    Myth 3: Innovation Initiatives Improve Communities…

    …the mimicry that pervades innovation initiatives is also a result of the very language that gives the myths of innovation form. Virginia Tech’s Innovation Campus proposal, for example, rings with buzzwords, including: blockchain, catalyze, collisions, digital revolution, embedded industry partners, hackathons, ideation, immersive learning projects, intrapreneurship, labor-­market gaps, market-driven curriculum, multidisciplinary, pathways, platform, priority needs, scale, soft skills, start-ups, talent production, traditional silos, and upskill.
    This innovation-speak risks devolving into the higher-education equivalent of what André Spicer of City, University of London calls “business bulls–t.” Spicer argues that business bulls–t is no laughing matter; its “empty words will trump reasonable reflection and considered action … it empties our language and makes us less able to think clearly and soberly about the real issues.”

    Matthew Wisnioski and Lee Vinsel are professors of science, technology, and society at Virginia Tech. Wisnioski is a co-editor of Does America Need More Innovators?, just out from MIT Press. Vinsel is writing, with Andrew Russell, a book that is tentatively titled “The Innovation Delusion.”

     

     

     

     

     

  11. Ron Glick

    “Regarding Genentech, are you referring to that outpost that’s contributing to sprawl along Highway 505?”

    Yes and headquartered in South San Francisco. Its also a subsidiary of Roche Holdings, market cap $232 billion, and a premier oncology drug manufacturer whose products have saved countless lives.

    I guess the fundamental  question is if you view having such a company in your community  as an asset or a liability. I see it as an asset whose benefits far outweigh its costs and worthy of accommodation and mitigation for its negative impacts.

    1. Bill Marshall

      Yep.

      Genentech had (perhaps still does) pretty innovative telecommuting, flex hours, etc., to precisely avoid traffic impacts… my spouse’s sister worked there (SSF, where I lived my first year on this planet)… I know this…

  12. David Greenwald

    I find it kind of interesting the discussion here – concrete examples of companies v abstract theory. I have seen enough over the last ten years to believe if we have space we can fill it. I also don’t see the downside to creating the space – what’s the risk?

    1. Bill Marshall

      what’s the risk?

      Apparently, one more person, one more dwelling unit, one more square foot of non-res, one more car, to some… apparently 3 of them have posted on this…

    2. Ron Oertel

      You think it’s likely that there’s commercial market demand for the (more than) 2 million square feet planned for Woodland, along with all of the other locations available in Dixon, West Sacramento, etc.?

      Regardless, there are known downsides (which are “definite” – and not a “risk”).  This includes loss of prime farmland, a logical boundary for the city, vastly increased traffic congestion, probable development pressures on other lands nearby (including the Shriner’s property, Covell Village site, etc.).

      Then there’s the matter of the (850?) housing units, and the impact that would have on the “fiscal profitability” of this development, from the city’s perspective.

      Any word yet regarding the number of parking spaces planned for this freeway-oriented development?  And, how they would be divided between workers, vs. residents?  (It’s certainly a convenient location from which to commute to/from Sacramento.)

      1. David Greenwald

        Remember the time horizon is for a twenty plus year time horizon. Right now as Danielle Casey pointed out – companies are not looking here because we have no space for them.

      2. Don Shor

        Ron:

        You think it’s likely that there’s commercial market demand for the (more than) 2 million square feet planned for Woodland, along with all of the other locations available in Dixon, West Sacramento, etc.?

        Yes.

        Most of the commercial real estate market in the Sacramento region is either “strong” or “spectacular” depending on the product and location (but with a caveat for retail space):

        Office space—”The office market had a strong 2018, resulting in a decline in vacancy to 9.2 percent, a new low for the market. Strong market metrics result from increased demand from tenants looking to enter the market. High levels of demand have also led to an increase in lease rates and property values. No submarket better exemplifies this more than downtown Sacramento, which has seen asking rates for ‘Class A’ space eclipse $3 per square foot/per month on a full-service gross basis for the first time. The outlook for 2019 is similar, with nearly 1.7 million square feet of tenants actively seeking space and a lack of available ‘Class A’ throughout the region.”

        https://www.ccul.org/resources/your-economy/226-uncategorised/resources/economic-forecasts/3038-sacramento-regional-economic-forecast

        1. Rik Keller

          Look how this matches up:

          * the publisher of this blog “Remember the time horizon is for a twenty plus year time horizon…”

          vs.
          * “But as it turns out, the distant prospects of success always enable biotech proponents to argue that their efforts simply haven’t yet been given enough time (and usually, also resources) to succeed. And likewise, no one can pronounce them failures. When asked why the struggling Scripps Institute in West Palm Beach hadn’t produced any of the spin off activity expected, local economic developers had a read explanation, reported the Palm Beach Post:
          “Biotech officials urge patience and repeat the mantra that a science cluster needs decades to evolve. “This takes a lot of time to develop,” said Kelly Smallridge, president of the Business Development Board of Palm Beach County.”“The biotech bonanza Jeb Bush hoped for? It didn’t go as planned,” Palm Beach Post, June 15, 2015
          So rather than being a liability, the long gestation period of biotech emerges as a political strength. Apparently, you’ve got to give the snake oil just a little bit more time to kick in.
          http://cityobservatory.org/21st-century-snake-oil/

        2. Craig Ross

          Key question Rik Keller – what’s the harm of approving a project knowing that if it doesn’t draw commercial business the land will lie vacant as it is right now?  I don’t believe that’s going to happen, but what’s the harm of failing here?

      3. Bill Marshall

        A “logical boundary” for the City, definitely includes the land below the Mace Curve and the site known as Covell Village… glad to see someone else is thinking “logical boundaries”… might well be more…

        1. Bill Marshall

          So, you concede the two sites I mentioned as being in the “logical boundaries”?

          Unclear.

          Or just “cherry-picking” as to what you respond to? Lots of others do that as well…

        2. Ron Oertel

          ARC would create pressure to develop other sites, such as Covell Village, the Shriner’s property, etc.

          Personally, I have no particular concerns with development inside the Mace Curve, such as the new Nugget headquarters (or the new Residence Inn).

          Part of the justification for the Cannery was to provide an alternative to Covell Village. As a side note, I suspect that many of the new residents there wouldn’t be thrilled with a development at the Covell Village site. I also suspect that many of the residents in the east and southeast parts of town (in particular) are (already) concerned about traffic impacts on Mace.

        3. Bill Marshall

          Look at a map, Ron… independent of ARC, Shriners, do you agree, “up or down” that the area under the Mace Curve, and the site known as Covell Village should be “logical boundaries”?

          New Nugget site is already within the City… so that was non-responsive, deflecting,whatever… to be clear, yes or no (no equivocating please) should the two sites I mentioned be within the City boundaries?

        4. Ron Oertel

          And frankly, the sprawling developments in Woodland are already contributing to traffic along Road 102/Pole Line, including the major intersection adjacent to the Covell Village site (at Covell).

          When the “innovation center” in Woodland is added to that mess (which will also include impacts to Mace and those freeway access points), let’s just say that there’s probably better places to be (e.g., on a Friday afternoon). (Unless one can observe it from afar, for amusement purposes.)

        5. Ron Oertel

          To answer your specific question – no, I don’t support development of the Covell Village site.  I like it “as is”, and I’m also concerned about the traffic impacts discussed above. However, I might be even more concerned about the Shriner’s property.

          I, along with others, viewed the Cannery as an alternative to Covell Village.

          I don’t have any particular concerns if the large, undeveloped site within the Mace Curve is developed at some point.  (Adjacent to the school.)

        6. Bill Marshall

          Actually, Ron, you did not “specifically” answer my question… I asked about “logical boundaries”… you answered as to what you “are OK with” or “don’t want” to see… an answer fitting to a different question.

          No need to respond… your views are clear, and I have zero interest in changing them…

          Have a great evening…

    3. Rik Keller

      I find it kind of interesting that you would ignore research that has looked at hundreds of real world examples in dozens of regions across the U.S. and shown that these types of projects are losers. One of the articles I linked to elsewhere is from an author who was an upcoming book called “The Innovation Delusion.” You have illustrated that mindset perfectly.

      1. Don Shor

        I find it kind of interesting that you would ignore research that has looked at hundreds of real world examples in dozens of regions across the U.S. and shown that these types of projects are losers.

        This is a proposal for a privately-funded business park. It isn’t a collaboration with UCD, nor are any city or university funds involved in the process. So I have never seen the relevance of your data to the MRIC/ARC proposal. There are plenty of business parks around with varying degrees of occupancy. Davis has fewer than most communities of its size, and the university connection will certainly be a selling point as they go to market space at ARC.

        1. Rik Keller

          Shor said “This is a proposal for a privately-funded business park. It isn’t a collaboration with UCD, nor are any city or university funds involved in the process.”
          Yet the author of this article claims that we need to support this project to show our LOVE for UC Davis.

          Shor also said: “So I have never seen the relevance of your data to the MRIC/ARC proposal. ”

          The relevance is that even the highly-subsidized examples are economic losers. MRIC/ARC doesn’t even have that. There’s a reason why they are adding a huge amount of housing to the project to try to make it financially feasible.

          1. Don Shor

            The relevance is that even the highly-subsidized examples are economic losers.

            Please provide data as to the success or failure rates of privately-financed business parks in regions similar to the Sacramento metro area. Thanks.

        2. Rik Keller

          Shor: “The studies I’ve already cited here and elsewhere include dozens of such examples of both privately-funded business parks as well as those that included some public subsidies. The findings apply equally to both.

          Maybe you need to some research and find research that supports your position. You have yet to do that in any of the threads for the many articles posted here in the subject.

           

        3. Ron Oertel

          Rik: “There’s a reason why they are adding a huge amount of housing to the project to try to make it financially feasible.”

          Housing appears to be the “driving factor” at the Woodland development, as well.  1,600 more homes – just from that development (alone).

          And then there’s this:

          “Bravo, Loomis!”

          “Most retailers need rooftops,” said Barry.” With rooftops come wallets. It’s just that simple. If the retailer needs rooftops that are subject to a referendum process, that retailer is gonna think twice.”

          https://www.davisenterprise.com/forum/opinion-columns/commentary-nimbyism-is-a-california-thing/

          Looks like Davis is “not alone” in the region, regarding concerns related to commercial developments – in this case (above) a retail/mixed-use development proposal.  (Although the author does not attribute the same meaning to his comment as I do, to say the least.)

        4. Mark West

          “The relevance is that even the highly-subsidized examples are economic losers.”

          The studies demonstrate that publicly subsidized research parks are often economic losers for the public agencies that provided the subsidy, not for the businesses that occupy the sites or for the employees who work there. As Don correctly points out, there has been no proposal for a publicly financed subsidy with our local proposals so Rik’s ‘evidence’ is not relevant. If Rik had found similar studies looking at privately financed research parks you know he would have presented their conclusions, yet he has not. Either those studies don’t exist (or he hasn’t found them) or their conclusions contradict Rik’s bias and agenda.

          “There’s a reason why they are adding a huge amount of housing to the project to try to make it financially feasible.”

          The amount of housing proposed will occupy a small fraction of the total project, will be high-density multi-family construction, and in total will be minute relative to the current need for appropriate housing in the community. In addition, the approved EIR determined that the project with housing included was environmentally preferred to the ‘no housing’ version. Financial feasibility is primarily a concern for the developers and their investors/financiers, a group that does not include either the City or the University.

        5. Rik Keller

          Mark West: you have clearly not read the studies if you are saying that “The studies demonstrate that publicly subsidized research parks are often economic losers for the public agencies that provided the subsidy, not for the businesses that occupy the sites or for the employees who work there”. What they ACTUALLY show is that the promises of economic performance and economic impact for research/business parks VASTLY underperform the rosy promises and projections provided. They are economic development losers. And in the case of MRIC/ARC, it is such an economic loser that they don’t even have the market demand to make the project financially feasible without putting in a large amount of housing.

  13. Ron Oertel

    Several large commercial/industrial sites within the city have been converted to housing, as have 2-3 other “innovation center” sites.

    Now, the MRIC/ARC site is proposed for inclusion of housing.

    Seems to me that there’s a lot more market demand for housing in Davis, than there is for commercial sites. Especially since housing sites can command a premium in Davis, while commercial sites cannot.

    Again, looking forward to disclosure regarding the number of parking spaces proposed for ARC, and how they would be divided between commuters, vs. residents.

    1. Ron Oertel

      And of course, there’s absolutely nothing from preventing the site from becoming another “dormville”, with student and other commuters going right through town to reach UCD.

      For those who claim that leases can be structured to prevent this, note that students already tolerate leases that run through the summer, when those units are not in demand.  There are ads (e.g., on Facebook) from students desperate to vacate their units, during that time.

       

      1. David Greenwald

        The project is subject to a Measure R vote. Timing of housing will be locked into a baseline features as will the structure and composition of the process. So I think your statement is objectively false – Measure R rules would prevent it from becoming dormville.

        1. Rik Keller

          We’ve all seen how developers avoid as much specificity in their “Baseline Features” delineation as possible (just as one example, WDAAC claimed after the fact that their central project feature used in all of their advertising, marketing, and project descriptions, the “Davis-Based Buyers Program,” wasn’t even real enough to be included in a legal challenge). It is incredibly naive to think this project will be any different.

        2. Ron Oertel

          “Timing of housing will be locked into a baseline features as will the structure and composition of the process. So I think your statement is objectively false – Measure R rules would prevent it from becoming dormville.”

          Your claim might address the “timing”, but not the ultimate result.  Measure R would do nothing to prevent that.

           

        3. Ron Oertel

          Measure R cannot prevent the housing at the site from becoming “Dormville East”. In fact, you’ve put forth no argument whatsoever, in support of your claim. As discussed above, leases cannot prevent that result, either.

          That result might even be more likely than becoming a commuter location, to/from Sacramento, although the proximity to Sacramento and adjacent freeway access might prove otherwise.

        4. Craig Ross

          Actually Measure R does prevent it from being dormville, because it will restrict the development to commercial and only once the commercial is in, can the developers add supportive housing.  By definition that’s not a dorm.

        5. Ron Oertel

          ” . . . , can the developers add supportive housing.  By definition that’s not a dorm.”

          There’s nothing that can be done to ensure that it’s supportive of the commercial component.  It might very well be primarily supportive of housing for students, or commuters to Sacramento.

          If they actually do build the commercial before adding housing, then those workers (at ARC) will have already found a home off-site, before the housing is built. (Unless they sleep in the interim at some “unidentified Safeway parking lot”, for example.)

           

          1. David Greenwald

            Ron –

            If you’re point that the project is going to morph into a student housing project, then you’re quite wrong and that can be addressed through the Measure R process.

            If you’re point is that nothing will prevent students from moving into the housing, I still believe you’re wrong, but you are on more solid footing at least.

        6. Rik Keller

          Ron O. said “There’s nothing that can be done to ensure that it’s supportive of the commercial component.  It might very well be primarily supportive of housing for students, or commuters to Sacramento.
          If they actually do build the commercial before adding housing, then those workers (at ARC) will have already found a home off-site. (Unless they sleep at some unidentified Safeway parking lot, for example.)”

          Very good points. The owner of this blog has taken the role of arguing directly for the development team, and apparently so too has one of his volunteers. But they’ve now painted themselves into a corner arguing out of both sides of their mouth that somehow the housing will both be “supportive” of the development while insisting that it will be built at the tail end in some subsequent phase.

          Meanwhile, it is clear that the actual market demand is such that the development will not even be financially feasible without the substantial residential component.
          [edited]

  14. Craig Ross

    “There’s a reason why they are adding a huge amount of housing to the project to try to make it financially feasible.”

    For a guy who is an “expert on this stuff, Rik doesn’t do a lot of homework

    (1) Mixed use is better for the environment as the EIR stated

    (2) the people working there need a place to live

    and most importantly the developer when I asked told me housing would only come in phase four – after a substantial amount of build out has occurred.  It will be live-work arrangements and set up for people employed by the site.

    Contrary to Ron’s point, baseline features can prevent it from becoming residential, all they have to do is restrict when they can build the housing and require commercial to be in place and built out first.  He also needs to do more homework on this stuff before commenting.

    1. Ron Oertel

      Contrary to Ron’s point, baseline features can prevent it from becoming residential, 

      Got it.  The baseline features can prevent the “residential” from becoming “residential”, according to your statement.  And in this case, “Dormville East”, and/or a commuter home for those working in Sacramento. 😉

      Requiring some buildout of commercial before this occurs does not “prevent” this from occurring. It does, however, provide some powerful incentives to cut a desperate deal with some commercial tenants, in order to gain approval to proceed with the “gravy” (housing). (Especially prior to city approval.)

      1. Don Shor

        It does, however, provide some powerful incentives to cut a desperate deal with some commercial tenants,

        I see no particular reason to think that Ramos or Oates are “desperate” for anything. And it wouldn’t matter to you, me, the City of Davis, or the region if they did “cut a … deal” with anybody in order to fill the space. My guess is they’ll charge the market rate appropriate to the region at the time the leasable space gets built. They aren’t going to intentionally lose money on something they’ve financed and built.

        1. Ron Oertel

          I see no particular reason to think that Ramos or Oates are “desperate” for anything.

          That EIR (and the underlying traffic study) are getting pretty “ripe”.

          How might a development (driven primarily by housing) compare to the amount received from continuing to farm the site, as currently zoned?  Especially since they’ve already invested in an EIR, etc.?

          This is a virtual recipe for “desperation”.

          Don:  “And it wouldn’t matter to you, me, the City of Davis, or the region if they did “cut a … deal” with anybody in order to fill the space.”

          It does if they use that to claim that there’s actual market demand for this amount of commercial space, as a “justification” for approval (for a development that appears to be driven by the profits from housing).  In other words, if it’s just a “display” to obtain approval for the ultimate goal – housing.

           

          1. Don Shor

            How might a development (driven primarily by housing)

            It’s not.

            This is a virtual recipe for “desperation”.

            You seem to be suggesting that they would obtain financing and develop a site with an intention of taking a loss or reduced profit margin on the commercial part of the development, just so they can build housing. You would have to work very hard to find any justification for this assertion of yours. They can build housing elsewhere if that’s how they want to invest their money. Buzz Oates, in particular, is almost entirely a commercial real estate developer (open to being corrected on this, but I’m pretty sure of it). Housing would enhance their profit margin, but more to the point I think it would help them to fill the commercial space if there is housing nearby or in the park. The lack of housing for employees in Davis is apparently an issue for getting firms to relocate here.
            My opinion is that it would be a weird place to live (to each their own, I guess) and is a very politically risky thing to propose, but it is not accurate to describe housing as being the primary purpose of this development.

            It does if they use that to claim that there’s actual market demand for this amount of commercial space

            Independent observers can tell you that there is actual market demand for this amount of commercial space. Housing is not the ultimate goal.

        2. Ron Oertel

          Don:  “You seem to be suggesting that they would obtain financing and develop a site with an intention of taking a loss or reduced profit margin on the commercial part of the development, just so they can build housing.”

          Again, housing appears to be the goal – not just at ARC, but at other sites.  It’s entirely possible that they look at the commercial component as a “loss leader”.  Again, Davis has already lost other commercial sites (within the city), as well as 2-3 other “innovation center” sites to housing.  How much more “proof” do you need regarding the primary goal, from the point of view of developers?

          “They can build housing elsewhere if that’s how they want to invest their money.”

          “They” already own this land.  Where else are you suggesting?

          “Buzz Oates, in particular, is almost entirely a commercial real estate developer (open to being corrected on this, but I’m pretty sure of it). Housing would enhance their profit margin, but more to the point I think it would help them to fill the commercial space if there is housing nearby or in the park. The lack of housing for employees in Davis is apparently an issue for getting firms to relocate here.”

          The “line” between commercial real estate developers and housing developers is becoming quite blurred, at this point.

          As far as housing is concerned, there is a substantial, relatively inexpensive supply in areas very close to this site.  The argument that housing is “needed” to attract workers might make sense in the Bay Area, but not in this region.

          “My opinion is that it would be a weird place to live (to each their own, I guess) and is a very politically risky thing to propose, but it is not accurate to describe housing as being the primary purpose of this development.”

          It is entirely accurate to describe housing as the primary goal.  As I recall, even you noted the likelihood that this site would likely be used as student housing.

          “Independent observers can tell you that there is actual market demand for this amount of commercial space.”

          If that was the case, the demand would have already been met in places like West Sacramento, Woodland, Dixon, etc.  (Places where housing does not command the same premium as Davis does, but where commercial development does not command that same premium.)

          1. Don Shor

            Again, housing appears to be the goal – not just at ARC, but at other sites. It’s entirely possible that they look at the commercial component as a “loss leader”.

            Banks don’t finance “loss leaders.”

            Again, Davis has already lost other commercial sites (within the city), as well as 2-3 other “innovation center” sites to housing. How much more “proof” do you need regarding the primary goal, from the point of view of developers?

            You seem to think all developers are the same. Some build housing, some build commercial, some build both. The team that was proposing a commercial site near the hospital went to Woodland. Care to guess why? There they have proposed a mixed-use development. So a developer who builds housing decided to propose housing for the West Davis site. They aren’t the same builders. Nishi was going to be mixed-use, but the voters rejected it, so the same team came back with a proposal designed to get an affirmative vote.

            “Independent observers can tell you that there is actual market demand for this amount of commercial space.”

            If that was the case, the demand would have already been met

            Right. Because that is how economics works? Supply is always provided in advance of demand? Or at exactly the pace of demand increase? Demand is present and increasing, supply is present and increasing. The vacancy rate for commercial is low, and projections for regional growth over the duration of build-out are strong. A normal recession would only slow the pace of build-out. If you spend any time looking at regional economic projections, you’ll see that this is not a very risky proposal for the site, especially given the dearth of commercial properties presently available in Davis.
            Believe it or not, there are firms that would prefer to locate here, despite the relatively higher price of property. That’s kind of the point of the article we’re commenting on.

        3. Ron Oertel

          Don:  You seem to be on one of your usual “wars of attrition”, which results in repetitive arguments.  Due to technical problems on the Vanguard’s website, I lost my initial response.  So, I’ll just submit this version, instead.

          Don:  “Banks don’t finance “loss leaders.”

          Hence, the housing.  If you’re familiar with the financing details (and have permission to do so), please share.

          Ron:  “Again, Davis has already lost other commercial sites (within the city), as well as 2-3 other “innovation center” sites to housing. How much more “proof” do you need regarding the primary goal, from the point of view of developers?”

          Don:  “You seem to think all developers are the same. ”

          They respond to the same market forces, which indicate a demand for housing (more than commercial development)

          Don:  “Right. Because that is how economics works? Supply is always provided in advance of demand?”

          “Believe it or not, there are firms that would prefer to locate here, despite the relatively higher price of property. That’s kind of the point of the article we’re commenting on.”

          Just pointing out that there are other places in the region which can, and do respond to market demand.  The recent presentation that the Vanguard hosted “lumped together” the Davis/Woodland market.  (The same market where more than 2 million square feet, and 1,600 additional homes have recently been approved.)

          I recall that even you noted that investors look upon commercial markets from a regional standpoint.  And, that Davis commands a premium for housing, but not necessarily for commercial space. This sets up a situation (for Davis in particular) in which housing becomes the primary goal, of developers.

          Also wondering what the going rate is for commercial space in a place like West Sacramento, and what their vacancy rate is.

          As far as the “point” of the article, it seems to put forth some kind of weird “loyalty” argument regarding UCD. (Which would also be “addressed” by the development in Woodland – 7 miles away.)

        4. Ron Oertel

          For that matter (regarding financing), is this needed to request approval for the development, from the city?  (I assume that the EIR was “self-financed”.)

      2. Craig Ross

        Yes the baseline features structure the entire project.  You can require a certain amount of buildings to be filled with viable commercial entities prior to housing.  However, you want to structure it.

    2. Ron Oertel

      Craig:  “For a guy who is an “expert on this stuff, Rik doesn’t do a lot of homework.”

      “He (Ron) also needs to do more homework on this stuff before commenting.”

      Coming from a guy who does “none”, other than communicating with (and apparently speaking on behalf of) vested interests.

      1. Rik Keller

        If citing multitudes of academic studies and books involving real world case studies—all of which point to both the same conclusion of the ineffectiveness of business/research parks to economic development and the snake oil sales strategies that the proponents use for their “field of schemes” proposals—is characterized as a lack of “homework, ” then the person making such an argument has some fundamental definitional challenges.

  15. Tia Will

    The ARC will change everything.”

    Tim, I read your article with interest and found it well thought through and articulately written. However, I wish you had fleshed out the sentence I quoted above. I imagine you intended this to be read in only in a positive light. I also imagine you are sophisticated enough to know that every proposal, every change has its pros and cons. It is inevitable with this kind of advocacy that many comments will be received stressing the negative aspects. Unfortunately, we have set up our society in an adversarial mode rather than as an honest and open exchange of ideas.

    With that in mind, I would like to hear what you perceive as the potential downsides to such a project. Housing? Transporation? Environmental impacts? In short, impacts on those not benefitting directly from the space and funding you envision.

     

     

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