Guest Commentary: Response to City of Davis Staff Report on the Davis Innovation & Sustainability Campus – Baseline Features

by Richard McCann

Submitted to the Planning Commission by Richard McCann, Member, Natural Resources Commission

Response to City of Davis Staff Report on the Davis Innovation & Sustainability Campus – Baseline Features

I submit these comments as a private citizen and not on behalf of the Natural Resources Commission (NRC). However, I was on the first NRC subcommittee tasked with developing the draft baseline features and am intimately familiar with the intent and mechanisms of these proposals.

For the State of California to achieve its GHG reduction goals by 2045 under state law will require largely eliminating all natural gas use in all buildings and widespread adoption of electric vehicles. Looking forward a quarter century, we need to start this process by ending the use of methane fuels in new buildings. (Reducing use in existing buildings will be an even larger hurdle.) The Planning Commission should support this initiative by the NRC to achieve our climate change goals that are consistent with the Climate Emergency Resolution adopted by the City Council in 2019. If the developers of the Davis Innovation and Sustainability Campus want to be truly innovative and sustainable—true leaders that will attract cutting edge entrepreneurs—they will agree with the NRC’s proposals, disregarding the Staff’s recommendations where they conflict.

The Staff Report to the Planning Commission provides in Attachment 6 a comparison of the baseline features proposed by the NRC and what the Staff is recommending to be adopted. The Staff has inappropriately taken on an adjudicatory role that is reserved in state law to the Planning Commission and City Council in this report. The Staff rejected every single NRC proposal that differed from that proposed by the developer. The Staff has sided with the developer over the recommendations of the well-informed citizens of Davis that were appointed by the City Council in large part due to the expertise that those citizens bring to these deliberations. The Staff ignored the research, analysis and deliberations that NRC members conducted since fall 2019 in its rather arbitrary dismissal of the NRC proposals.

In several cases, the Staff appears to be confused about what the NRC actually proposed and rejects those proposals based on misinformation. In addition, the NRC made proposals based on previous City actions that the Staff rejected, including a housing proposal based on the City Council’s certification of the original MRIC EIR. Finally, the Staff appears to have misinterpreted or misunderstood other studies, or have failed to provide supporting evidence for rejecting the NRC’s proposals. The Planning Commission should consider and accept the NRC proposed features rather than simply accept the Staff’s assertions in these cases.

Baseline features are required elements to be added to the development agreement that go beyond the minimum requirements contained in City ordinances, codes and regulations. If these features just simply matched what is already required, then there would be no need to establish baseline features in a development agreement. For this reason, simply rejecting certain proposals because they go beyond minimal requirements defeats the entire purpose of this exercise. The City will never achieve its environmental goals or provide leadership to the rest of state if this is the only reaching minimal standards.

My comments on Staff recommendations on NRC proposals follow:

NRC2: The developer shall commit to minimizing carbon emissions by maximizing production of clean energy onsite…

Providing local energy production increases sustainability by minimizing the need for transmission and distribution grid infrastructure, lowers the cost of that generation overall, and better facilitates use of energy storage by avoiding that grid infrastructure (saving up to 10% in energy losses). Further, it increases local resilience by bringing energy generation and storage closer to the immediate load center. This is particularly important at the risk of wildfires increases and public safety power shutoffs (PSPS) increase commensurately for at least the next decade according to Pacific Gas & Electric (PG&E).  Recommend full inclusion of NRC 2.

NRC3: (Staff response) Cal Green Tier 1was [sic] not found to be cost effective and is therefore not required. The current Non Residential Reach code does not include an all electric provision and could require a cost effectiveness study and California Energy Commission review.

This statement is mistaken and surprising. The Staff sent a memo to the NRC on September 25, 2018 stating that CalGreen Tier 1 is the basis of the current code. The Staff worked with the NRC in 2018 to develop a non-residential commercial building code based explicitly on CalGreen Tier 1. This was confirmed by City Staff in NRC meetings. NRC 3 is only restating what is already required as a prelude to the next statement. Note further that the current City code does not include a requirement that residential be all-electric, but instead provides an incentive to be all electric. So that baseline feature proposed by Staff already exceeds the City code requirements. Requiring this of the commercial space is therefore no different. This proposal does not include a change to the City building code and therefore is not subject to CEC review. It is specific to this project. The reference to CalGreen Tier 1 should be included in case in the future City code falls below that standard. The commercial buildings should be required to be all-electric, except for the exceptions proposed by the NRC in NRC7.

Alternatively, the provision for restricting natural gas use on site would be to ban the installation of natural gas infrastructure except at the specific request of tenant for a specified purpose.

NRC4: (Staff response) The developer has agreed to enter into an agreement. However, it cannot be ensured that all power will be used locally.

Valley Clean Energy Alliance has considered the implementation of a feed-in tariff to purchase local renewable power.  DISC can approach VCE with the City, which is a member of the governance board of VCE, to finish developing that tariff. This baseline feature provides the incentive for the developer to move this issue forward.

NRC5: If, after maximizing energy efficiency and on-site production of clean energy, the energy demand of Project structures exceeds the energy produced on-site, then the Developer shall purchase power from solely renewable sources…

The Staff recommendation fails to include the most important element which is to maximize energy efficiency. The best way to reduce environmental impacts from energy use is to avoid energy use. This provision should be included in the baseline features.

NRC7. All onsite commercial buildings shall be all-electric. Fossil fuels (e.g., natural gas, propane) shall only be allowed for manufacturing processes as specified by a tenant. As mechanisms become available to reduce or offset carbon emissions from manufacturing processes fed by fossil fuels, the MOA shall require implementation of these mechanisms to reduce emissions in a timeline consistent with the City’s Climate Action and Adaptation Plan (CAAP). Volumes and types of fossil fuels used onsite, as well as opportunities to reduce emissions, shall be included in each annual report prepared and submitted by the MOA.

(Staff response): Requiring all electric is not consistent with the City of Davis Non-Residential Reach Code. The recommendation goes beyond our Reach Code and could require a cost effectiveness study and California Energy Commission review. Furthermore, it is anticipated that certain desired laboratory and advanced manufacturing uses may need natural gas or other fuel sources.

In NRC6, the Staff report calls for requiring all-electric residential housing. This goes beyond current City code that only provides an incentive to build all-electric residential. Yet, the Staff rejects NRC7 for requesting exactly the same provision for non-residential buildings. This requirement will be subject to the exact same tests that NRC6 will face, which is none because it is in the development agreement and not in the City code. The Staff is wrong about the requirement for a cost-effectiveness test in this situation. In addition, the Staff report ignores the fact that the NRC included the exception for fossil fuel use that the Staff claims was ignored. NRC7 should be included in the baseline features.

NRC9. All onsite buildings (commercial and residential) shall achieve zero net carbon for the building envelope—including heating, ventilation and air conditioning (HVAC), and lighting—with onsite renewables and storage.

(Staff response): Developer has indicated that it has feasibility concerns with this request particularly in the early phases.

NRC members had discussions with the development company on this matter and the developers did not express any concern about limiting this provision to HVAC and lighting. This provision does not cover other internal uses such as office equipment, laboratory and manufacturing processes or other activities that are entirely under the control of tenants. This provision will be easy to meet with the combination of requiring (1) 100% renewable power and (2) all-electric construction except where needed to meet tenant requests. NRC9 should be included in the baseline features.

NRC12. In anticipation of improved solar connected energy storage, the Project shall be designed and pre-wired for future microgrid capacity and energy storage.

The Staff report mistakenly implies that the NRC is requiring installation of a microgrid. The NRC is recommending that the development be required to be microgrid-ready. This proposal is consistent with the provisions in the draft Downtown Plan Chapter 8 “Implementation Actions: Sustainability.” NRC members had discussions with the developer who indicated such a requirement was feasible. The alternative future cost of installing this conduit and supporting features is multiples of the low cost of including design provisions. NRC12 should be included in the baseline features.

NRC14. (Staff response). The EIR lays out options for dealing with the ponding, none of which can occur on site or on another privately owned property within the City boundaries as the flow is away from the city.

The NRC made this recommendation to prevent the use of City-owned property at Howatt Ranch for drainage without full compensation from the developer. NRC14 should be included in the baseline features.

NRC16. (Staff response). Staff recommends that the applicant meet the City’s Tree Ordinance requirements for shading.

The City does not have a currently effective Tree Ordinance and revision has been delayed for at least three years. Without assurance that the Tree Ordinance will be updated in a timely manner, NRC16 should be included in the baseline features.

NRC 19. All commercial and residential parking areas shall be EV ready, equipped with infrastructure designed to facilitate installation of EV charging stations as demand grows.

Staff recommends that only the current City ordinance be required. That fails to consider the need for forward thinking to achieve the City’s goals under the Climate Emergency Resolution. The just-released GHG inventory shows that 69% of the City’s emissions are from transportation. Reducing those emissions will require reducing VMT and switching from gasoline and diesel-fueled vehicles. The NRC’s recommendation only calls for all parking bays to be EV ready—that does not mean that charging infrastructure is required. As with being microgrid ready, it is much cheaper to preinstall certain underground infrastructure at the outset instead of digging up the parking lots later at ten times the cost (based on the difference in cost between “greenfield” and “brownfield” installations of electricity distribution infrastructure reported by PG&E in its mobilehome park conversion program.) Further, EV charging will enable onsite renewable generation with “vehicle to grid” (V2G) energy storage that will provide such storage for a steep discount compared to standalone storage, leading to future cost savings. The project developers represented to members of the NRC that such a requirement would not be burdensome. NRC19 should be included in the baseline features.

NRC 20. All housing shall include one Level 2 EV charger per unit or, if a multifamily building is provided parking at a ratio of less than 1:1, one Level 2 EV charger per parking stall.

Staff recommends applying only the City ordinance, which does not require prewiring for all multifamily parking stalls. See comment on NRC19 for further explanation on this issues. NRC20 should be included in the baseline features.

NRC 21. (Staff response.) Market analysis indicates that the market will not bear paid parking for commercial in Davis. DA Ex. 12: Developer commits that when the market will bear parking fees, such fees will be implemented with proceeds supporting TDM measures.

The Staff report provides no documentation for this purported “market analysis”. The Staff appears to both misapply such a market analysis which is likely focused on retail commercial activity in downtown Davis, and miss the intent of the recommendation to reduce both VMT and GHG emissions. Various  studies, including these two that UCD Institute of Transportation Studies contributed to,2 indicate that such fees are effective at achieving these objectives. Transportation demand measures (TDM) without parking fees will fail to achieve sufficient reductions in a cost-effective manner. NRC21 should be included in the baseline features.

NRC32. Housing construction shall be directly linked to the development of commercial space at a ratio of no more than one dwelling unit per 3,000 square feet of nonresidential space2.

The Staff recommendation of one dwelling unit per 2,000 square feet of nonresidential space allows residential buildout at a rate 50% faster than commercial buildout. This will reduce the effectiveness of creating the jobs-housing balance that will reduce the environmental consequences from the project. (See further comments in NRC34 below.) NRC32 should be included in the baseline features.

NRC 33. To provide an opportunity for a carfree lifestyle, parking associated with multifamily rental housing will be unbundled. Multifamily rental units will be charged for parking separate from rent.

Paid parking is one of the most effective transportation demand measures and could lead to large reductions in VMT and GHG emissions, as noted in my comment on NRC21. The proposal in the Staff report is meaningless. Unbundling is irrelevant without an associated requirement for paid parking. Unbundled free parking is still free. Include NRC33 in the baseline features.

NRC34: …the Developer shall require employer master leasing of all rental housing and ownership of a portion of the single-family housing units and require employment for residency. These requirements shall be dependent upon a minimum firm size, to be designated by the City.

(Staff Response): This request jeopardizes overall project feasibility and is more than the market will bear.

This project has been advertised as a business development focused on commercial and industrial uses. Residential building is to accommodate the workforce in an environmentally friendly manner. The finances for residential portion of the development should not weigh significantly on overall project feasibility unless the residential portion is overly costly. The Staff report only makes an assertion with no supporting documentation on this point and it should be rejected as speculative. In contrast, master leasing is common by companies in the Bay Area, including by Google and Apple. Davis housing prices are 75% to 80% higher than neighboring cities in Yolo County,3 and master leasing is a direct means for companies to control housing costs in a favorable manner for their employees. This will lead to a reduction in commuting VMT.

Further, when the City Council certified the initial EIR on the MRIC provision upon which the SEIR is tiered, it adopted the following language as a requirement for MRIC (which is now DISC):

WHEREAS, on May 24 and July 19, 2017 the Planning Commission held two duly noticed public meetings to consider certification of the FEIR pursuant to Section 15090 of the State CEQA Guidelines, separate from any deliberation or action on the merits of the project, and voted to recommend certification to the City Council including a clarification to page 7-202 of the Draft EIR that the Mixed Use Alternative is only environmentally superior assuming a legally enforceable mechanism regarding employee occupancy of housing; specifically that at least one employee occupies 60 percent of the 850 on-site units; if at least 60% of the Units are occupied by an Employee of the Project.(Emphasis added)

The City Council has already adopted the requirement that the NRC is again including its requirements for baseline features. The Staff’s unsupported rejection of this proposal similarly rejects the previous action by the City Council. The Staff fails to note anything that has changed in the interim. The NRC is proposing a specific mechanism for ensuring that the City Council’s officially stated requirement.

Thank you for your consideration of these comments.

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Disclaimer: the views expressed by guest writers are strictly those of the author and may not reflect the views of the Vanguard, its editor, or its editorial board.

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  1. Ron Oertel

    I sincerely appreciate this effort from Richard and from the NRC as a whole.

    As a side note, I see that some “humor” is (also) included in the article:

    This project has been advertised as a business development focused on commercial and industrial uses.


      1. Ron Oertel

        If that was the case (and that the housing is intended for on-site workers), then the developer would agree to master leases (for companies) – as the NRC recommended.

        As a side note, the “underline” that Richard included on the word “business” did not come through, when copying and pasting the comment.

        1. David Greenwald

          I’m not sure where the master lease objection is coming from – certainly disagree with your conclusion that the two are linked. But I do think it’s a mistake to oppose a master lease potential.

        2. Ron Oertel

          I don’t understand your comment.  The recommendation is from the NRC, not me.  But, I (and apparently you) agree with it, in terms of demonstrating that the housing is actually intended for on-site workers.

          However, it seems that the developer and city staff “disagree” with that recommendation, along with all the others that Richard listed.

          Are there any other examples in which you agree with the NRC’s recommendations?

          1. David Greenwald

            Sorry, it appears my first sentence is confusing. What I meant was – I don’t know who is objecting to the master lease – the developer or the city. I also don’t understand why either would object to it. It is not explained in the staff report. That’s what I meant by not sure where the master lease objection is coming from. And as I said, I think it’s a mistake as I explained in the commentary this morning in the newsletter.

          2. Don Shor

            Perhaps someone is concerned that it might lead to a lawsuit due to perceived discriminatory outcome.

          3. David Greenwald

            That wasn’t their rationale. They used a market-based reason not a legal based reason.

        3. Ron Oertel

          Thanks for the clarification.

          What do you think of the recommendation to require completion of 3,000 square feet of commercial space per residential unit (instead of the 2,000 square feet proposed by the developer/staff), regarding “phasing”?

        4. Ron Oertel

          Don:  Perhaps someone is concerned that it might lead to a lawsuit due to perceived discriminatory outcome.

          Based upon the article above, do you think that somebody should tell Apple and Google about that?

          Are you suggesting that it’s illegal, and that “this” is the reason that the developer and staff are rejecting it?  (Because that’s not the reason provided, in the article above.)

          In fact, staff’s response suggests that there is no connection between the housing and the commercial components.

  2. Ron Oertel

    The proposal still includes approximately 6,000 parking spaces, of which almost 5,000 are intended for non-residential usage.

    The truth is that this amount of parking is what’s needed for this type of development to be feasible. In fact, it’s at the lower end of what’s needed.

    1. Ron Oertel

      And, if you start “squeezing it” downward, I wouldn’t be surprised if parking for this development starts spilling-over into Mace Ranch.  (Especially if there’s some kind of bike/pedestrian access to Mace Ranch.)

    2. Ron Oertel

      Just to clarify, the amount of parking that’s proposed (and needed) is ultimately the reason that there isn’t enough lipstick in the world, to make this pig “pretty”.

      It’s simply the wrong type of development, in the wrong place. And, it will lead to even more sprawl, as essentially noted in the SEIR.

        1. Ron Oertel

          If they’re “telecommuting”, they won’t need the proposed office space that’s included in the proposal.  There’s going to be a glut of that, across the country.

          If they’re not telecommuting, they’ll need parking.

          I don’t know what “TDM” stands for.

          There are no commercial tenants committed to the proposal. (The “flypaper” approach will apparently be used.)

          1. David Greenwald

            Transportation Demand Management

            What if they can telecommute a few days a week? You’re viewing it as all or nothing.

            “There are no commercial tenants committed to the proposal. ”

            That will change if it gets approved. It probably won’t change before. Look how quickly and easily Aggie Square filled up.

        2. Ron Oertel

          I would agree that it’s all speculation, other than what’s described in the SEIR and (ultimately – in a development agreement).

          For that matter, “demand” for housing is likely to be impacted by telecommuting.  I recently posted an article which describes a “mad rush” to leave San Francisco.  With rents dropping about 10%.

          This is likely going to impact those areas that are perceived as more expensive, but don’t offer much other than job opportunities. (Sound familiar, regarding Davis?)

          Regarding Aggie Square (in Sacramento), we could go over all the differences again, if you’d like (e.g., about 8 acres in the first phase – which is what I assume you’re referring to, 24 acres total, adjacent to a medical center, infill, on UCD’s land, subsidized by other government agencies, etc.).  Just off the top-of-my-head.

          1. David Greenwald

            “I would agree that it’s all speculation, other than what’s described in the SEIR ”

            Even the SEIR is speculation – it is based on assumptions and estimates. It’s useful, but it remains speculative.

            “Regarding Aggie Square (in Sacramento), we could go over all the differences again”

            There are always differences. The issue is one of demand. I think what we see is a high rate of demand and there will be evidence of that coming forward.

        3. Ron Oertel

          There’s always a “demand” for well-subsidized proposals, adjacent to a medical center. Again, you’re apparently referring to an 8-acre site on UCD’s land, and with other costs subsidized by government agencies.

          If you really want to look at “innovation center” demand (associated with UCD in Davis), one need look no further than the other 2-3 proposals which have failed (including MRIC itself).

          This would also include the Davis Innovation Center (which “moved” to a location 7 miles from UCD via Highway 113 – to “anything goes” Woodland) – and doesn’t even seem to be viable, there. Even with a vast amount of housing, included.

          The only reason that DISC is being pursued is because of the housing during the first two phases.

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