Sunday Commentary: Davis Teeters with an Unsustainable Economic and Fiscal Situation

The data is a few years old – 2014-2015 – but it paints us a picture that is not all that different from today.  UC Davis is the single largest employer in the city – with 12,181 jobs, representing a whopping 37 percent of the total.

The next nine employers combine to only 3000 jobs – DJUSD, City of Davis, Sutter Davis, Unitrans, PG&E, Safeway, Nugget, Kaiser Permanente, and University Retirement Community.

According to the 2017 state of the city report, “Together, the top 10 employers accounted for 46.3 percent of all jobs in the city.”

The report notes something else – a point that we have been making for several years now: lack of retail sales.

The report notes: “Although Davis represented around 32 percent of the countywide population in 2014, according to the BOE, retail establishments in the City of Davis facilitated only 15.6 percent ($589,194) of countywide taxable sales, compared to West Sacramento and Woodland which facilitated 36.7 and 24.3 percent of countywide taxable sales.”

The report concludes: “Overall, the analysis indicated that the Davis Core Area features fewer residents, housing units, and jobs compared to other college-oriented peer communities. Compared to peer cities, the Core Area has above-average concentrations of employment in Retail Trade, Finance and Insurance, Real Estate and Rental and Leasing, and Accommodation and Food Services.”

There are those who would argue that UC Davis already represents the primary source of jobs in the city – and that is true.  In fact, these numbers understate its total impact.

The UC Davis Economic Impact Analysis report from 2016 estimated that the total impact on the seven-county Greater Sacramento Region was $6.8 billion of economic output and 65,000 jobs, with the core campus in Davis contributing about $2.8 billion in gross economic impact along with 40,000 jobs.

But the total breakdown also demonstrates some shortcomings here.

The first problem is that, while the total number of campus jobs is robust, only about 2100 or so are full-time faculty jobs.  Once you get past faculty and administrative positions, the number of high paying jobs decreases markedly.

If you look beyond UC Davis, the number of high paying jobs on the top ten employer list is fairly low.

That is precisely the problem that has been identified here.  It is why despite the presence of UC Davis, a huge percentage of people who live in the city of Davis are employed elsewhere.  They simply cannot find sufficient paying jobs in the city to afford to live here.  By the same token, the vast majority of those employed at UC Davis live elsewhere – not being able to afford to live here on their salary.

But there is a second problem illuminated with these data – the lack of retail sales and thus the low percentage of sales tax generated.  The Vanguard’s work, going back to 2016, shows the lack of per capita retail sales in the city of Davis (see this article from August 2016 for example).

That’s once again borne out by data featured in the State of the City report showing Davis lagging behind both West Sacramento and Woodland in retail sales.

This is a huge driver of the city’s revenue shortfalls.  Our 2016 analysis showed that Davis was generating just $8.43 thousand in retail sales per capita compared to over $15 by Woodland and $26 by West Sacramento.  At the upper end of our comparison cities were Palo Alto at $36 and San Luis Obispo at $28.

In the meantime, we continue to work backwards as a community.  We have pushed through the MOU with the university to reach agreement on the impacts of university expansion, which has led to the city building new housing for students.

In the meantime, the university is largely generating revenue that is not going to the city of Davis either, because it is generating tax revenues in the county or because the city has just not leveraged the power of the university for its own good.

That trend is continuing with county and region-wide economic development spinning off from the university, whether it is the billions generated at the UC Davis Medical Center in Sacramento or the business expected to be generated at Aggie Square.

While I think it is easy to fault the university here for located core expansions in Sacramento rather than Davis, Davis has in a lot of ways made its own bed.

That has led to the city of Davis creating an upside-down and unsustainable revenue and fiscal model.

Right now the city is failing to leverage the advantages of the university, and has produced an economy that is largely based on government employment with a heavy secondary emphasis on health care and basic services.

What is largely missing from the local economy is private-sector job growth that can leverage the economic power of the university and take technology developed on the campus and develop it for private sector use.

The expansion of commercial space for these ventures will generate additional property tax growth as well as the potential for point-of-sales advantages.  But not if we continue as we are.

Some have argued that this is where the university has the obligation to lead in this discussion – and I would agree with that.  The problem is that the university, I think, feels that it has been burned in the past by attempting to work with the city, only to see its ventures shot down.

Aggie Square is the embodiment of this problem.  The university clearly sees the future of their ventures in places like Sacramento, and perhaps even Woodland and West Sacramento where they don’t have to fight through land use, ballot measures and legal battles in order to move forward.

In the meantime, Davis is in danger of not being able to generate the revenue needed to sustain its high quality of life.  The failure to leverage university capital and resources will come back to haunt this community as we struggle to find funding for even the most basic of infrastructure needs – roads and parks – and increasingly will rely on taxes to fund even the most basic of city services.

—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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70 Comments

  1. Rik Keller

    The headline of this article screams that the sky is falling, yet there is no evidence provided within to support that thesis.

    The role of UCD in the community should be scrutinized further though.  Overall on a per capita basis, UC Davis students spend only about 20% on local retail as do members of non-student households. This is a problem when UC Davis has dramatically increased enrollment rates in the last decade without providing its fair share of increased student housing. This has resulted in forcing out workforce/family households in the community, and has been a drain on local retail establishments (and City of Davis tax revenue).

    As far as the business park (“innovation center”) proposal  that the Vanguard is implicitly pushing in this article:

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

     

    1. Richard McCann

      As I’ve repeatedly pointed out, Levine’s work is not well supported. In addition, Levine doesn’t appear to make distinctions between places where such innovation parks are a “Hail Mary” effort in a region with a declining economy versus one that truly leverages local advantages.

      As for evidence, Davis has lagged on sales tax revenues for decades, long before there was any claim that UCD was forcing housing onto Davis. We have become dangerously dependent on car dealer sales taxes just as the industry is about to transform with the introduction of EVs.

      In addition, the housing data posted here recently shows that we are currently in line with the long-term ratio of students to population. It also appears that UCD has taken on the responsibility of housing many more students (but housing can’t be thrown up tomorrow.)

      1. Rik Keller

        McCann: you’ve repeatedly pointed that out. And you have repeatedly failed to support your assertions with any evidence or studies that are contrary. And  your statement here just reinforces the fact that you have not bothered to actually read Levine’s in-depth study.

        Furthermore, you have not read the multitude of studies that have  supported and extended Levine’s analysis . These include  Matthew Wisnioski and Lee Vinsel, 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.” (see “The Campus Innovation Myth” (June 2019)https://www.chronicle.com/interactives/20190611-vinsel

        If  you think you have groundbreaking information that contradicts years of this research, you should publish a book!

         

         

         

        1. Richard McCann

          I did read Levine’s article and there was no real substance there. I previously critiqued the sloppy econometric analysis that claimed to support the position in one of his papers. (BTW, the second article is only accessible to subscribers.) The burden is on you to produce the quantitative data analysis to back up this point. I will say that the supporting analysis on both sides of the issue is severely lacking, but that doesn’t make the opposition valid. The opponents have failed to specify what made the successful parks succeed, and say nothing about how we’ve created economic innovation to date. Without this latter analysis, there’s nothing really meaningful in what they’ve done to date.

          The question that you haven’t answered is how do the many innovations agglomerations arise? You seem to believe that they burst spontaneously out of the earth. Much more likely they arise when access to necessary resources or transportation and communication pathways intersect with a gathering of appropriately trained individuals that allows firms to acquire resources and information and trade key individuals back and forth. That chemistry leads to innovative creation. Unlike trying to build a semi conductor research center in an Iowa cornfield, we are considering a research park the meets these parameters. That’s why places like Stanford Research Park, Ann Arbor’s North Campus Research Complex that focuses on automotive technologies and North Carolina’s Research Triangle have been successful. Davis would seem to have the ingredients for a success story as well.

        2. Ron Oertel

          The question that you haven’t answered is how do the many innovations agglomerations arise?

          Locally, they seem to “arise” primarily as housing developments. In fact, 2-3 other Davis innovation center sites have “done away” with the commercial component, altogether.

  2. Rik Keller

    This article makes an unsupported assertion that only good-paying jobs at UC Davis are a couple thousand faculty and administration jobs. An actual analysis of the range of jobs at UC Davis would have a far different conclusion.

    1. Craig Ross

      Really, can you show us such an analysis?  Who are getting these jobs?  Because as a former student, most of the jobs on campus are low wage jobs except for the administrative and faculty jobs.

    1. Ron Oertel

      Already, those supposedly “not-so-well-paying” jobs are attracting commuters from other communities, who apparently find these opportunities to be better than those offered in their own communities.

      But again, what are the actual salary numbers you’re referring to?

      Meanwhile, many Davis residents commute to Sacramento, to work in state jobs, etc.

      Maybe these folks should “trade” (either job location, or home location).

      Alternatively, we could stop trying to “invent” problems for the purpose of supporting more development.

    2. Ron Oertel

      By the way, even if the “pie-in-the-sky” fiscal profits magically materialize, those profits will soon be eaten-up by additional peripheral housing developments, which will then be “justified” based upon the increased number of jobs.  (ARC doesn’t even provide sufficient housing to meet its own needs.)

       

       

       

      1. Don Shor

        those profits will soon be eaten-up by additional peripheral housing developments,

        The voters control that.

        (ARC doesn’t even provide sufficient housing to meet its own needs.)

        So you want more housing at ARC. Got it.

        1. Ron Oertel

          The voters control that.

          SACOG increasingly has a say in that.  So do massive, well-funded advertising campaigns and supportive blogs.  I’d argue that some associated with the school district also push for it.

          So you want more housing at ARC.

          I don’t want ARC in the first place.  I like the land the way it is, and I’m already concerned about traffic/environmental impacts.

          1. David Greenwald

            If you don’t want housing there in the first place, then why are you worried that there isn’t enough?

          2. Don Shor

            The voters control that.

            SACOG increasingly has a say in that.

            SACOG cannot make a city annex land. You referred to peripheral housing.

        2. Ron Oertel

          Just pointing out that MRIC/ARC would likely increase pressure to develop other lands, such as Shriner’s, Covell Village, etc.

          In fact, some are already pushing for this.  Just the other day, you advocated for changing Measure R to allow for peripheral developments to match SACOG growth requirements.

          And, I recall that this was SOON AFTER you claimed that you wouldn’t support any other peripheral developments at this time, other than MRIC/ARC.

          1. David Greenwald

            “Just pointing out that MRIC/ARC would likely increase pressure to develop other lands, such as Shriner’s, Covell Village, etc.”

            It is possible that it might – down the line – remember there is a 20 to 50 year build-out. My analysis of available peripheral lands suggests that there are only limited future possibilities anyway, the city is likely to have to grow into the future, and therefore I don’t know that this is going to change things that much. BTW, talking to some of the folks who were willing to support MRIC without housing, they favored the Signature property (inside the curve) for what that’s worth.

        3. Ron Oertel

          You’re contradicting yourself, as noted in my 9:44 a.m. comment.

          Your “analysis” of available lands includes some lands that I’d like to see preserved, and leaves out a host of others beyond that.

          And again, I like the MRIC/ARC site the way it is, and see (primarily) disadvantages to developing it.

          1. David Greenwald

            My analysis of available lands does not mean I prefer or support development on them, it only looks at whether they are likely to be developed in the foreseeable future. The only position that I have taken is the need for peripheral commercial development at the ARC site.

        4. Rik Keller

          “ff you don’t want housing there in the first place, then why are you worried that there isn’t enough?”

          You are totally missing Ron O’s point. ARC/MRIC would contribute further to the jobs/housing imbalance in Davis.

  3. Ron Oertel

    David:  “The only position that I have taken is the need for peripheral commercial development at the ARC site.”

    I believe this is factually incorrect.  For one thing, you support housing at the site (which I understand would consist of about 850 units).

    But more importantly, I recall that you featured the idea (in one of your recent articles) to change Measure R, to allow peripheral developments to match SACOG growth requirements.

    So, how do you explain your shifting positions? Are you counting on memory problems?

    Also, one of the factors that SACOG considers is the number of local jobs.  Add more jobs, and SACOG will eventually require more housing. Again, there’s already an imbalance, which is the reason that there’s a net influx of commuters through Davis.

    1. Bill Marshall

      I believe this is factually incorrect.

      It is either factually incorrect, or not.  Facts (if truly, ‘facts’), do not rely on belief, nor faith.  Unless you accept “facts” truly are more perceptions/beliefs/arguments/ploys.  I could easily argue either way… ex: “the sun always rises in the east”… ‘fact’, or perception, belief…

      1. Ron Oertel

        Bill:  “It is either factually incorrect, or not.”

        Your bias is once again on clear display.  You read and comment on this blog religiously, so it’s difficult for me to believe that you don’t remember this recent article.  It was David’s article, not mine.  And yet, you ask me to “prove” his conflicting claims regarding support for peripheral development, and “matching” it to meet SACOG requirements. Even though he’s not disputing this.

        In any case, it wasn’t difficult to find.  Perhaps this will provide a lesson for me, to retain all pertinent links for future reference. I have now saved the following link, as well.

        David:  “The question I have – if that is the case – is does Measure R, as we understand it now, really make a lot of sense?”

        “What if, instead of piecemeal development, project by project, we had the following.  If the city had a hard cap on growth, you get 2075 units between 2021 and 2029.  These are the areas that we can develop.  We can’t go over 2075  in terms of size.”

        ttps://www.davisvanguard.org/2019/09/monday-morning-thoughts-thoughts-on-housing-and-growth-in-davis/

        Is there anything else I can help you (or David) “recall”?

  4. Matt Williams

    Compared to peer cities, the Core Area has above-average concentrations of employment in Retail Trade […]

    But there is a second problem illuminated with these data – the lack of retail sales and thus the low percentage of sales tax generated […] borne out by data featured in the State of the City report showing Davis lagging behind both West Sacramento and Woodland in retail sales.

    This is a huge driver of the city’s revenue shortfalls.  Our 2016 analysis showed that Davis was generating just $8.43 thousand in retail sales per capita compared to over $15 by Woodland and $26 by West Sacramento.  At the upper end of our comparison cities were Palo Alto at $36 and San Luis Obispo at $28.

    The reasons behind the retail sales data are not new.  They have existed ever since I arrived in Davis in  1998, and they had been entrenched in 1998 for at least a decade.

    The first reason is that the retail economy of Davis only serves its own residents, and for the most part only sells the necessities of life (from Safeway, Nugget, CVS, Rite Aid, etc.).  Palo Alto, San Luis Obispo, Chico, Eureka/Arcata, and (to a lesser extent) Woodland all are regional hubs for economic activity.  Consumers make regular trips to those economic centers of their region to make both necessity and discretionary purchases.

    The second reason has existed throughout the decades, but I haven’t seen it so clearly illuminated. Other peer cities support and even promote a distributed retail environment with both a core area and full-service neighborhood shopping.  The only way that Davis can have well-below-average per capita retail sales at the same time as having a “Core Area that has above-average concentrations of employment in Retail Trade” is because there really is no retail outside the Core Area.  The Marketplace and the Target shopping center on Second Street are the only exceptions, and both are pretty minimal.

    There are three added reasons why local retail has declined even further in recent years. specifically,

    — The growth of internet retail sales has eroded the per capita bricks and mortar retail sales of the non-UCD student portion of the Davis population.

    — Both internet sales and big-box retail in the hometowns of UCD stents have eroded per capita bricks and mortar discretionary retail sales of the UCD student portion of the Davis population.  This is an important reason in a town where the proportion of UCD students is growing while the non-senior proportion of Davis residents is falling.

    — The proportional increase of the Davis population over the age of 54 gives Davis a large segment of its population who have already made most of the discretionary purchases of “things” (furniture, appliances, art, recreational toys, baubles, special event clothes, etc) in their lives, and are actually looking to get rid of “things” rather than acquire new ones.

    The problem with today’s Vanguard article is that after stating the problem, it does nothing to discuss what/whether Davis can do about that problem.  Instead the article opens a second dialogue line about other forms of potential revenue for the City.

    So, I’m going to attempt to address the “what can we do about the low per capita retail sales problem” question.  Sadly, my personal belief is that there is very little that Davis can do to boost itself up to the levels of the cities cited in the article.  First, Davis will never be a regional hub acting as a magnet for retail economic activity.  Second, the likelihood of there ever being robust distributed neighborhood retail sales activity is somewhere between slim and none, and slim has left the building.  Bricks and mortar neighborhood retail across the country is shrinking rather than expanding  Third, as UCD enrollment continues to grow the proportion of the population that is UCD students will continue to expand, and as noted above, for the most part, their discretionary retail spending is either through the internet or in their hometown retail economy.

    So, should Davis simply throw its hands up in the air, wail and gnash its teeth?  No, there are targeted opportunities.  One such, very lucrative in terms of sales tax revenue, is to work with UCD and Amazon to relocate the Amazon Fulfillment Center from its current on-campus location at the UCD MU to a location within the Davis City Limits.  Such a relocation would mean the 1% Measure O  sales tax amount would be collected on sales delivered to the Fulfillment Center, as well as the City sharing in its portion of the 7.25% base sales tax amount.

    How much revenue would that amount to?  The only way that we will know the answer to that question is for City Council to direct Staff to take the necessary research steps to generate an estimate.

    My suspicion is that it would be several millions of dollars of added revenue for the City.

    1. Ron Oertel

      Such a relocation would mean the 1% Measure O sales tax amount would be collected on sales delivered to the Fulfillment Center, as well as the City sharing in its portion of the 7.25% base sales tax amount.

      My suspicion is that it would be several millions of dollars of added revenue for the City.

      Interesting idea.

      1. Rik Keller

        Yes, interesting idea, but try prying that out of UCD’s mitts! On a related note, UCD keeps opening new dining facilities on campus. Great for the students, but it means even less spending in town. Meanwhile UCD has been perfectly happy to outsource the provision of housing to the city of Davis while it reaps the windfall of skyrocketing enrollment.

        1. Bill Marshall

          Perhaps… but not one scintilla of that will change in the foreseeable future… so, whine, or come up with a viable alternative…

          Re:  ‘dining’… City over-accommodated that in DT, in what amounts to subsidies on fees, etc.  They particularly favored those DT establishments selling alcohol to students… that’s worked out “real well”, based on fairly recent history.

        2. Ron Oertel

          Strange, how some were so opposed to the city pursuing legal remedies with UCD, regarding student housing on campus.

          Have to wonder what that opposition was actually about.

          If there weren’t several voices opposed to that, perhaps the city could have addressed other issues with UCD, as well. Maybe even arriving at an agreement regarding the Amazon site.

          In any case, the city would obtain a greater amount than UCD does. Perhaps helping to “make up” for sticking the city with the costs of student housing, while simultaneously siphoning-off sales tax from those same students (and their already-limited spending).

      2. Rik Keller

        Richard McCann: UCD has a lot of ground to catch up on. And the MOU has no teeth. Only the most naive wouldn’t expect UCD to get if of supposed commitments in the future.

    2. Bill Marshall

      And here I thought sales tax was based on zipcode of buyer, rather than ‘pick-up’ point… if the logic is true, then if it was moved off-campus, we could charge all UCD residents and institutions another 1%!

      1. Richard McCann

        I’m not sure that UCD collects the sales tax because it goes to local governments, not educational institutions. UCD has no reported sales tax allocation so I don’t think it’s receiving any: http://www.californiacityfinance.com/BOE_SUTbyCity18p.xlsx. In this case, that would likely mean that Yolo County is collecting the tax.  Davis tax is 1% higher than Yolo County: http://www.cdtfa.ca.gov/formspubs/cdtfa95.pdf

         

  5. Rik Keller

    The bottom line is that multiple in-depth studies have found that 99% of business/research parks do not produce economic development beyond what would have occurred organically in non-conglomerates locations. In other words, development that occurs in these locations has simply been shifted from other areas. Anyone who tries to tell you otherwise is trying to sell you snake oil l.

    The earlier EIR for ARC/MRIC (which now requires an update and recirculation according to the City) discusses this issue in-depth and talks about the vacancies projected to occur on existing commercial/industrial sites in Davis.this is because there is not enough projected demand for these types of uses leading to low absorption rates.

    When you combine that with the data that shows there is a long-term capacity of 9,000 jobs or so on existing vacant already-designated commercial/industrial land in Davis (and this does not even account for underutilized properties that could be redeveloped), we have enough capacity for decades and there is no justification for re-designating and destroying peripheral agricultural land.

    1. Mark West

      “The bottom line is that…business/research parks do not produce economic development beyond what would have occurred organically in non-conglomerates locations. In other words, development that occurs in these locations has simply been shifted from other areas.”

      As shocking as this is to say, I agree with Rik Keller on this point. Business parks do not “produce economic development,” what they do is provide a location for such development to occur. The value of ARC (or something similar) to the community is not to ‘produce economic development’ but to provide a location within the city limits of Davis for that economic development to occur. The community benefits when economic development (and the resulting new revenues and jobs) occur inside the City’s boundaries, otherwise those benefits go elsewhere. In fact, that is the entire justification for an economic development effort, so that those economic benefits come to the residents of Davis instead of going those in Woodland, Sacramento, or outside the area.

      1. Ron Oertel

        Got news for you:  They’re going to leave, anyway.  At least, those who are searching for cheaper options than ARC would ever provide.  (Especially those seeking a large amount of cheap space.)

        It’s not a “net loss” if businesses that leave are replaced by other businesses.

        1. Craig Ross

          And I have news for you.  You don’t know a thing about what you are talking about.  You don’t talk to anyone in that space, don’t know anyone, you’re simply speculating outloud in a way that aligns with your predetermined views.  Mark has years of experience working in this space, you don’t.

        2. Ron Oertel

          There’s already an example of this, with Bayer.  As I recall from another commenter, they were offered a deal in West Sacramento that ARC would never be able to touch.

        3. Ron Oertel

          Well, if you’re privy to the facts (such as the deal they were offered, and have permission to share this information), then let’s hear about them.

          In general, commercial markets are looked at from a regional perspective. One need look no further than the recent presentation that the Vanguard touted, to see this. No doubt, surrounding areas are, and will remain significantly less-expensive.

          Housing, on the other hand, can command a premium based upon a Davis location.

        4. Ron Oertel

          The relationship between Davis vs. surrounding cities kind of reminds me of the relationship between San Francisco, vs. South San Francisco (and the related sign, created decades ago):

          “South San Francisco, The Industrial City”.

          https://en.wikipedia.org/wiki/South_San_Francisco_hillside_sign#/media/File:SSF_Hillside_Sign_2.JPG

          Well, that’s “something” to be proud of I guess. But, I think I prefer San Francisco, over its southern neighbor.

        5. Mark West

          Ron – you are right, Bayer was made an offer they couldn’t refuse even though they were not looking to leave. In a separate case, Tyler Schilling, who grew up here in Davis, worked to have ‘his’ company stay here even after it was sold to an international corporation. In the end, while both entities wanted to stay in Davis, neither had/has a realistic option to do so due to our lack of space for commercial expansion. The losses of these companies (and others) impact every tax payer in town, even those who fail to understand the significance.

           

          1. Don Shor

            Bayer acquired AgraQuest, a Davis firm founded by Pam Marrone, in 2012. Marrone had left AgraQuest and founded Marrone Bio innovations. The CEO of AgraQuest also left and founded BioConsortia Inc. Both those companies are still located in Davis and apparently growing.
            When Bayer moved to West Sac, Marrone Bio Innovations moved into their old facility on Drew Avenue. Something else moved into their old site; I don’t recall what business.
            BioConsortia’s headquarters are on Research Park Drive. They also have a facility in New Zealand.
            The point of all this is that if either of those businesses outgrows their current locations, there won’t be a site for them to grow up in to within Davis.
            Reporting at the time was that Bayer would have liked to stay in Davis. Lots of firms would like to be in or near Davis, apparently especially seed and ag science firms. Bayer did get a deal on the West Sac site that nobody here or in Dixon or Woodland could offer: a site with lots of square footage, apparently already developed well for their type of business. Sometimes that will happen. But not always, or even often. Companies like Bayer and Genentech use a lot of factors in their decision-making process. It is very likely that similar companies, especially those in ag related industries, will find it desirable to locate in Davis if there is commercially-zoned land available with utilities and infrastructure in place. Most prefer not to develop their own sites. Some will choose to locate here for various reasons; others may choose to locate in Woodland or Dixon or West Sac for other reasons.
            There seems to be an attempt to assert that there is insufficient demand for commercial development in Davis, simply because land is cheaper in nearby cities.
            The businesses that are here and growing won’t have any place to grow if it’s just odd parcels of raw land. The businesses that are likely to move here won’t find sites big enough among the small parcels, and aren’t interested in undeveloped raw land. What they need is a site zoned and ready to go. That’s what Davis doesn’t currently provide.
            If the city’s economic development coordinator can assist any of the property owners that are sitting on the smaller parcels to move forward with development, great. But waiting for that to happen appears to be a pretty random way to achieve economic development. An effective way is for the city to identify sites, work with the developers to get those sites zoned and subdivided, and work with them to bring in tenants or coordinate move-ups of existing businesses.

        6. Ron Oertel

          Again, not one comparison of the deal (e.g., lease amount, or any other incentives) that they were offered, vs. what they’d likely pay at ARC.

          Given the price differences between locales, it may be that Davis should focus on companies that aren’t seeking a large amount of cheap space. Especially since ARC appears to be driven primarily by the profit from housing.

        7. Ron Oertel

          Don: “Lots of firms would like to be in or near Davis, apparently especially seed and ag science firms.”

          Well, here you go then:

          “Woodland Research Park, a proposed 350-acre project located just seven miles from UC Davis, offers the opportunity for established companies and startups focusing on agriculture innovation to expand or put down roots in Northern California’s agriculture and food science epicenter.

          Planned as a thriving work/live campus with over 2 million square feet of research park office and lab space, 1,600 single and multi-family homes, parks and open space . . .”

          http://woodlandresearchpark.org/

          “Problem” solved, and “demand” met – for decades to come. (By the way – impacting traffic through Davis, as well.)

          1. Don Shor

            “Problem” solved, and “demand” met.

            Your premise seems to be that Woodland will meet all the demand. There is no evidence of that. Davis itself is attractive to many types of firms.
            The commercial market is not saturated in this area.
            Development in Woodland doesn’t make any money for the City of Davis.

          2. David Greenwald

            Ron: Except for one problem Ron – one of the problems is the need for the city of Davis to generate revenue, which a Woodland-based project doesn’t do.

        8. Ron Oertel

          Uh, huh.  That’s why this development proposal (which was originally proposed for Davis) “collapsed”, and was replaced by – you guessed it – housing, in the form of WDAAC.

          But you’re right – Woodland will now have to deal with the costs and impacts of another 1,600 homes, as well as the impact of commuters to the site. (Which again, will impact Davis as well.)

          Let’s see how long it takes them to fill more than 2 million square feet of commercial space, seven miles from UCD.

        9. Mark West

          “It’s not a “net loss” if businesses that leave are replaced by other businesses.”

          It is generally cheaper to maintain a customer than to go out and find another. That truism works just as well for businesses looking to maintain or grow their revenues as for cities looking to become fiscally sustainable. It is nearly always a ‘net loss’ when a city loses a resident business, even if the space that business once occupied is eventually filled by another entity. To say otherwise simply demonstrates a lack of understanding.

        10. Ron Oertel

          “It is nearly always a ‘net loss’ when a city loses a resident business, even if the space that business once occupied is eventually filled by another entity.”

          Do you mean, for example, if a key business like Davis ACE goes out of business, because some might actively oppose their reasonable plans to maintain viability?

        11. Ron Oertel

          The reference to Davis ACE should have been phrased in past tense.  Hopefully, we won’t see any effort to interfere with the reasonable plans of a business like that, again.

        12. Rik Keller

          The actual business/research park component of the ARC proposal boils down to office uses on 45 acres, totaling 1,510k sf in 20 different structures (or 76k sf per structure); and industrial/manufacturing uses on 57 acres, totaling 884k sf in 8 different structures (or about 110k sf for each structure).
          These are relatively small structures requiring only small individual parcels. This amount of development could be accommodated on the existing vacant commercial/industrial land inventory within Davis with plenty of land left over.

        13. Rik Keller

          Richard McCann:

          You dishonestly extracted part of my statement. My whole statement reads:

          “ The bottom line is that multiple in-depth studies have found that 99% of business/research parks do not produce economic development beyond what would have occurred organically in non-conglomerates locations. In other words, development that occurs in these locations has simply been shifted from other areas. Anyone who tries to tell you otherwise is trying to sell you snake oil .”

          This is all covered thoroughly in Levine’s research (the most thorough examination of the performance of research parks in the U.S.  that exists) which you would know if you ever bothered to read it rather than making up false statements about it. Bonus: he cites many other studies confirming this reality.

      2. Rik Keller

        Mark West: the larger point of my summary is that there is already plenty of space available for such development to occur if there was actually demand for it here.

        Instead, we see existing commercial land getting rezoned to residential by developer request. And we see MRIC/ARC proposing a large amount of retail and residential development because the office/industrial/flex development doesn’t pencil out otherwise.

        1. Mark West

          “the larger point of my summary is that there is already plenty of space available for such development to occur if there was actually demand for it here.”

          And that point has been proven false, repeatedly, yet you continue to say it. The rest of your comment is hyperbolic gobbledygook.

          Rik Keller – You actually made a statement that was true above, we should all be rejoicing (I know I am). Don’t spoil it with more nonsense.

        2. Rik Keller

          Mark West: If you would point to a study or two that shows the “gobbledygook” that you are dreaming of, that would be most helpful.

          In the meantime, in the reality-based world, based on the City’s own data, we have capacity on vacant commercial/industrial land—using conservative development intensity assumptions— for enough development for 9,000 new jobs,l.

          Now, if you want to assume development  densities  with structures going to 65 feet and 85 feet high like the ARC proposal, with a net FAR of 0.93, go ahead and double that existing capacity.

           

        3. Richard McCann

          “99% of business/research parks do not produce economic development”

          Please provide the exact article and page number that contains that data point.

          “we have capacity on vacant commercial/industrial land—using conservative development intensity assumptions— for enough development for 9,000 new jobs”

          That statement ignores the very salient finding (reported here a few months ago) that those properties are not sufficiently contiguous to support large scale employment gains. Yes, we can have a bunch of small auto repair shops around town, but no research parks or high tech manufacturing.

  6. Rik Keller

    One wonders how the Vanguard reconciles its recent posturing in an editorial supposedly supporting sustainable development and taking climate change seriously vs. this MRIC/ARC auto-oriented peripheral development that represents the worst of decades-old stale and failed economic development strategies, and also includess 4,340 parking spaces.

    1. Ron Oertel

      The short answer Rik, is that it “doesn’t” even try to do so. Because there’s no way to make sense of that.

      Wow – 4,340 parking spaces?

      Does that include the “newly-created parking spaces” (traffic jams) on surrounding roadways, access/exit ramps to I-80, and on I-80 itself? Or, would those add to the total? 😉

    2. Richard McCann

      Rik

      Still waiting for your positive contribution to addressing the largest problems facing Davis: the employment and housing “hole” for middle class families, the decline base of fiscal resources for the City, and creating a sustainable and resilient economic and commuting landscape.

      1. Rik Keller

        Hey Richard: why don’t you start by eliminating your negativity: dishonestly misquoting me and misrepresenting academic research that you have not bothered to read.  Then maybe we could have a discussion. Warning: there aren’t any snake oil cures.

        I have already discussed housing policies extensively. Maybe pay attention?

  7. Bill Marshall

    The reference to Davis ACE should have been phrased in past tense.  Hopefully, we won’t see any effort to interfere with the reasonable plans of a business like that, again.

    Bet a lot Jennifer and Doby are laughing real hard about that real funny attempt at disinformation!

    The hardware store, the rock yard, garden center are still flourishing under the folk they sold the business to… their reasons for selling were not related to City approvals… ironically, one of the options they had considered, and floated, was for mixed use (comm & res) as a way of redeveloping their property… never was a formal application.

    There appears to be absolutely no limit to how you will postulate ‘revisionist history’, including that of the proposal for the area adjacent to Sutter Hospital,that was withdrawn and became WDAAC, is there?

    There appears to be little, if any, truth within you.  Or other ‘revisionists’…

    Would you have strongly supported Davis ACE’s concept of a mixed-use redevelopment project south of Third?  Did you support the proposal (innovation park) for the land west of Sutter?  Did you support the Woodland proposal, when the developers dropped the Davis proposal?

    Am thinking of a yellow fruit that is generally curved.  It appears, you prefer pasta as a staple.  with banana dessert. (or, vice versa)

    But your “cause” is “just”, and “the ends justify the means”.  Yeah.  Right.

     

     

    1. Ron Oertel

      “There appears to be little, if any, truth within you.  Or other ‘revisionists’…”

      Wondering how personal attacks/lies like this are continually allowed to remain on the Vanguard.

      “Bet a lot Jennifer and Doby are laughing real hard about that real funny attempt at disinformation!”

      I was referring to the failed attempt by another commenter on here, to prevent Davis ACE from constructing a solar-covered parking lot on their own property.  I’m pretty sure that you know what I was referring to.

      Rather than attack me, how about sharing your own views regarding that failed attempt?

      As I recall, the owners of Davis ACE at that time didn’t think it was “funny”, as they gathered input from their own customers to support their proposal. Fortunately, the majority on the council supported the Davis ACE proposal. (I believe that “one” council member sided with the complainant.)

      “There appears to be absolutely no limit to how you will postulate ‘revisionist history’, including that of the proposal for the area adjacent to Sutter Hospital,that was withdrawn and became WDAAC, is there?”

      Exactly what is your point, here?  And, how does it differ from my comment?

       

  8. Ron Oertel

    Richard:  “I’m not sure that UCD collects the sales tax because it goes to local governments, not educational institutions. UCD has no reported sales tax allocation so I don’t think it’s receiving any.”

    If that’s the case, then perhaps UCD wouldn’t object to a transfer of the Amazon site from the campus to a location within the city, which might provide a significant fiscal benefit to the city – as Matt noted above.

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