Sunday Commentary: Why the City Council Will Have to Approve University Commons

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Pretty much everything went wrong last week at the Planning Commission, but ultimately while there are very likely to be some major changes to the University Commons project, the council is going to have to approve it in similar form to how it is now.

At the core is the dilemma that the council has to deal with—the site is not viable now, and in order to finance a $200 million redevelopment project they have to have housing, and housing across the street from the university is going to be primarily student housing, whether you have one bedroom apartments or five.

The biggest thing is that the combined property and sales tax projects will be nearly $1 million.  With a city that lacks clear paths to revenue, how are they going to say no in the end?

In addition to the fiscal impact, here are five key points that point the way.

Point 1: the U-Mall is dying. The Grad is gone. Most businesses are not in great shape. New businesses are reluctant to come in.

Some on the commission argued this is a community gem—first of all I just don’t see it.  With the exception of Trader Joe’s, which would have worked anywhere in town, the University Mall has been a place where even established companies have not survived.

Even if you do believe that it’s a gem, it won’t be without serious upgrades.  There is no doubt it is a prime location and could become a gem. But not without significant redevelopment.

There is a letter in the Enterprise that laid this out: “According to the commission, the project will damage the ‘retail gem’ of Davis, the existing University Mall. Wrong. The University Mall is a dying mall in a dying retail landscape. The new project will include exactly the kinds of retail that are currently viable at the University Mall. Cost Plus is on its way to bankruptcy, and we all know what happened to Forever 21.”

For 25 years since I moved here, I have watched this as an under-utilized location. This is a chance to change it—but that requires capital.

Point 2: Redevelopment requires residential. This is a $200 million project. Maybe if we had RDA still, we could help finance it. But we don’t. No one seems to want to believe the economic realities despite numerous pro-formas and analyses.  The bottom line is construction is expensive, land is expansive, demolish and rebuild is very expensive and commercial by itself is difficult to finance.

Some have inferred this to mean there is no commercial demand.  That’s not it.  The applicants fully believe that they will have the space filled before they re-open.  The issue is financing and getting the money upfront to do the infrastructure and construction.

George Phillips, representing the applicants, noted that Brixmor has owned the site for approximately 15 years.

“They recognize the need to revitalize the site to make it and keep it that gem that Commissioner Mikesell mentioned,” he said. “That is the whole goal here.”

To accomplish that, though, he said, “requires the residential component frankly, because without the residential component, the revitalization of the commercial is extremely difficult if not impossible with today’s economics.”

The public will remain skeptical on this point, but the Council won’t.  They know this is true and it, along with the projected revenue, will push them to approve this project.

Point 3: I get that the council wants to draw the line on student housing in light of the 4000 or so beds they have approved over the last three years.  But that goal has to meet reality.

The project is across the street from the university. And the project is itself surrounded by student housing.

I get that some people want to keep student housing growth on campus. But let’s be realistic—that ship has sailed. What the goal should be is keep students near campus so that single family homes are opened to families and other residents.  And so that students don’t have to drive to school.  That makes sense.  If this project was at the Market Place or Second Street Crossing, then I would agree it shouldn’t be designed as student housing—but across from the entrance to the university?  Come on.

If they want to turn these into smaller units—one to three bedrooms—and unit leases, fine.  The students are fine with that and it really won’t change anything.

The bottom line: who is going to move into U-Mall? Students. We should have no illusions, housing across from campus will be primarily student housing. And let it be.

Point 4: It’s too tall.

Is the height negotiable?  I don’t know.  But this isn’t really a seven-story student housing building.  It’s more like four stories which is about typical.  The difference is they have two to three stories of parking underneath.  Can they shift that?  I don’t know.

But this whole height thing is a bit of a red herring.  People have been trying to push for density on campus—what’s wrong with it across the street?

Besides, the weirdest part of this is no one objected to Davis Live Housing literally down the street.  When they approved seven-story Davis Live across the street last year, even Eileen Samitz said it was okay.  Now she is strongly opposed.  Her reasoning made sense last year, I don’t understand her view of the difference.

Point 5: It will add traffic.

George Phillips made this key point last week: “It’s not supported by the traffic analysis.”

Existing conditions, plus project, according to the traffic analysis, shows “there are no significant impacts to surrounding intersections,” George Phillips argued. “The traffic issues are not as serious as the concerns raised.”

He added, on the VMT, that “there is no better demonstration that this site is being developed appropriately at the intensity it’s being developed, other than by the VMT numbers.”

Consider that a shrinking number of students have vehicles, it’s across the street from the university and parking will be limited not only on site but in the neighborhoods. If you want to have a car, don’t live across the street from the university. Pretty simple.

The bottom line here I think is the economic point—this is a dying mall and those who try to save the mall by killing this project will make sure that we have a thriving Trader Joe’s and Starbucks and not much else at the mall.

If we want to revitalize it, right now that takes housing.

The council is going to see the logic of this and the influx of $1 million in tax revenue and they are not going to say no.

—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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58 thoughts on “Sunday Commentary: Why the City Council Will Have to Approve University Commons”

  1. Ron Glick

    Okay, maybe, but one thing. The traffic at Russell and Sycamore is already overburdened. It usually takes two cycles and often three to make the left turn from Russell onto Sycamore. There needs to be a plan to upgrade that intersection. Same at Anderson although not its not as bad.

  2. JosephBiello

    I live 1 block north of U Mall and am extremely excited about its redevelopment – and potential for mixed student housing and retail.

    1) It is a dump right now.   Anyone who tries to debate that is not being truthful.  The interior corridors were ghost towns even when the anchor stores were there.

    2) The traffic “issues” at Russell and Sycamore are less than minor.   SOMETIMES (and that means rarely) does it take 2 cycles to make a northbound left.   That happens when folks are going into the mall – and the only place they are going (from that direction) is Trader Joes.

     

    Dense student oriented housing near the university (NO student who lives there would need a car to get to the university – it is literally kitty corner to the university) with retail on the lower floors.   What is the real problem here?    That it is “too tall” – are you kidding?  It has dense student housing in all directions and no single families homes within a block of it.

    The Grad is gone for all you nostalgic Davis lifers, it’s not coming back.   Let this place thrive.

     

     

     

     

     

     

     

     

  3. Ron Glick

    Sometimes the left takes three cycles. Usually it takes two. Usually means more times than not. Perhaps we use it at different times Joe. Certainly during drop off and pick up times for Emerson or Willet its impacted. I’m sure its addressable by increasing the cycle times by a few seconds or putting in a pressure strip that allows the traffic to clear before the signal changes. Also they could extend the turn lane length so traffic doesn’t back up into the thru lanes.

    Maybe its not the fault of the mall nor will the new project impact traffic much but if the area is going to be allowed to redevelop the CC should address the traffic issues.

    Yes in my backyard too but fix the stop light signals for better flow.

  4. Jim Frame

    It seems like a good project to me.  Offhand I can’t think of anything about it that I don’t like.

    or putting in a pressure strip that allows the traffic to clear

    I got a chuckle out of this.  If weight-actuated signal controls were ever used, I don’t remember them.  Inductive loops buried in the pavement seems to be the most common detection method, though video may be playing a role now.

    1. Ron Glick

      Thanks. I’m not familiar with how it works, but, whatever the state of the art technology is, it would be useful to employ it there.

      1. Alan Miller

        I’m not familiar with how it works

        Let me tell you one thing, it doesn’t work, for bicyclists.  Whatever the sensors are, they worked for awhile, slowly fail, and there is no way to know until you’ve sat in the left turn lane for so long you realize nothing knows you are there.  Can you imagine if this same standard were applied to the auto sensors?   What you prioritize shows what you value, and it ain’t bikes! (Hint: it’s still cars) The City never fixes this.  Bike town my @ss!

  5. Alan Miller

    Gem.  Geminy.  Gemeroonie.  Gemster.  Gemgemgemgemgemgem.   Geeeeeeeeeeeeeeem!   gem.   Gem Gem Geminy.  St. Gem.  Gemgeminiegemgeminiegemgemgeroo.   Gimmie Gem.

    > sales tax projects will be nearly $1 million. With a city that lacks clear paths to revenue, how are they going to say no in the end?

    Can we use that as the standard for everything that comes before the Council? Makes everything so much simpler, and counter-views so irrelevant.

  6. Alan Miller

    > the revitalization of the commercial is extremely difficult if not impossible with today’s economics.”

    Are we talking ‘today’ as in February economics or April economics?

        1. Ron Oertel

          A couple years ago, this proposal originally started out as a straight-out refurbishing of the commercial mall (without any housing).  Staff encouraged the applicant to add housing.

          That is a fact, not an opinion.

          1. David Greenwald Post author

            But that doesn’t change the economics that exist today with the loss of RDA money and the increase in construction costs.

        2. Ron Oertel

          It was approximately two years ago that the applicant began the process of redeveloping the commercial mall (without housing).

          RDA money did not exist at that time.

           

          1. David Greenwald Post author

            You’ve seen the proformas from the downtown. This is not something new. The bottom line if you want to be able to do redevelopment right now, you need to add the housing. Everyone in this business has told you that and the most you can point to is a statement from a few years ago that suggested that the initial proposal was for commercial only.

          1. David Greenwald Post author

            In addition to the proforma there is some question about the accuracy of the statement in the Enterprise, I’ve had a few people tell me that the project has always had housing.

        3. Ron Oertel

          There is no publicly-available pro-forma statement for this proposal (as originally proposed for commercial development, or now – with housing).

          And again, your claim regarding the lack of RDA money (in regard to this proposal) is totally irrelevant. The proposal started out without housing, approximately two years ago, after redevelopment money no longer existed. Why are you even mentioning that, other than to deceive?

          Who told you that the information in the Enterprise article is “wrong”?  (I believe it was noted in more than one article, as well.) And, why would anyone believe you, or your unidentified “source”?

          So far, the only entity that seems to be putting out misleading information is the Vanguard.

          1. David Greenwald Post author

            “So far, the only entity that seems to be putting out factually incorrect information is the Vanguard.”

            I have not put out any information that is incorrect – you haven’t shown anything to be incorrect. The line in the Enterprise is a caption and unattributed and vague and has been disputed by people in the city. If I had the statements on the record, I would have put them out there. I suggest if you care about this issue, you can follow up.

        4. Ron Oertel

          The line in the Enterprise is a caption and unattributed and vague and has been disputed by people in the city. 

          It is not limited to a “caption”. 

          In fact, it is the developer who noted staff’s involvement, regarding the inclusion of housing.

          That’s two false claims by you, in a row.

          Who are the “people in the city” that you are referring to?

        5. David Greenwald Post author

          Regardless, today, the developer says they can’t do it.

          “To accomplish that, though, he said, “requires the residential component frankly, because without the residential component, the revitalization of the commercial is extremely difficult if not impossible with today’s economics.””

          And the downtown proforma, which should have the same economic constraints as this site, says basically the same thing.

        6. David Greenwald Post author

          “The proposal started out without housing, approximately two years ago, after redevelopment money no longer existed.”

          I met with them for the first time three years ago and there was housing.

        7. Ron Oertel

          And the downtown proforma, which should have the same economic constraints as this site, says basically the same thing.

          That is an opinion.  This site is much larger than other sites downtown, for example.  And, it already has a mall on the site.

          Thanks for proving that the Enterprise noted staff’s involvement regarding the inclusion of housing (in more than one article).

          I was referring to the more recent article, which also states this:

          The commission voted 7-0 to recommend that the City Council not certify the environmental impact report, amend the General Plan or take any other steps towards approving the proposed University Commons mixed-use project on Russell Boulevard.

          https://www.davisenterprise.com/local-news/planning-commission-unanimously-opposes-university-mall-redevelopment-plan/

          I don’t necessarily have an objection to “advocacy”, until it starts going into the realm of false statements.

        8. Ron Oertel

          I met with them for the first time three years ago and there was housing.

          Prove it.  You’re stating that the Enterprise is “wrong”, more than once.

          Don’t you think that staff would have a concern, if false claims are being made about them in the main news source, for Davis? (Coming from the developer, no less? And – within the last two years.)

          1. Don Shor

            From The Davis Enterprise, Feb 2017

            Is U-Mall shaping up to fit its nickname?
            By Wendy Weitzel
            Changes are coming to University Mall. Although plans are not yet public, mall execs have eyes on a big remodeling project. Meanwhile, tenants are in a wait-and-see mode. The 103,695-square-foot mall is at 737-885 Russell Blvd.

            Brixmor Propery Group, a New York company that owns the mall and manages it from San Diego offices, has preliminary plans posted on its website. The renderings call for demolishing The Davis Graduate’s space, as well as smaller adjacent businesses along the interior corridor. It also shows a new upper level — an additional 8,324 square feet above Fluffy Donuts and adjacent stores — which one source says could include residential units. An additional retail building would go along the Anderson Road side, with a proposed 12,288 additional square feet. The changes would make room for more parking in the front, and make the mall’s footprint live up to its “U-Mall” nickname.

            Kristen Moore, a spokeswoman for Brixmor, said “The referenced brochure was created in 2015 as a concept. It is does not reflect the final redevelopment plan, which is still in process.” The company “plans to invest in redeveloping University Mall. We are committed to providing a shopping environment that meets the needs of the local community. We are currently exploring options that address the needs of our shoppers and our current retail partners. Once our redevelopment plans are solidified, we will be able to provide more details.”

            On Wednesday, Assistant City Manager Mike Webb said “no application has been filed for the property.”

            https://www.davisenterprise.com/business/is-u-mall-shaping-up-to-fit-its-nickname/
            Printed in the February 26, 2017 edition on page A9

          2. David Greenwald Post author

            I met with them shortly after this article came out, fwiw.

            But again, even if there was a discussion in 2015 for a redevelopment with commercial only, the economics have changed considerably since 2015. This is a point that has gotten lost in Ron’s insistence.

        9. Ron Oertel

          From the Enterprise article dated May 28, 2020 (less than 2 weeks ago, cited above):

          Brixmor which purchased University Mall in 2004, began the redevelopment process two years ago.

          Brixmor representatives said at the time, and that was the original plan — to spruce up the city’s oldest mall.

          It was city representatives, Brixmor staff said, who urged mall owners to consider not just renovating the mall but thinking bigger by adding housing.

          Somebody is either lying, or not reporting accurately.  Either that, or one could view the vague statement cited by Don as more of a “thought”, than a plan.

          The plan, in fact, was to refurbish the commercial mall (without housing).

          Now, one might conclude that either these development proposals are being proposed by the Keystone Cops, or they’re subsequently being encouraged (or faciltiated) by staff to pursue more profitable options.

          But, this does not mean that the commercial proposal was not viable, as David claims.

          https://www.davisenterprise.com/local-news/planning-commission-unanimously-opposes-university-mall-redevelopment-plan/

  7. Alan Miller

    > But this isn’t really a seven-story student housing building.

    Tone deaf!  height is about height, not the number of stories of housing.  Where do you come up with these thoughts?

    1. Mark West

      “height is about height, not the number of stories of housing.  Where do you come up with these thoughts?”

      The number of stories, not the height, was the issue with a recent Hotel project. When it comes to arguing against a project, what it often comes down to is ‘what ever works.’

  8. Alan Miller

    “The council is going to see the logic of this and the influx of $1 million in tax revenue and they are not going to say no”  . . . . says Davis hypnotist and blogger David Greenwald.

  9. Matt Williams

    The biggest thing is that the combined property and sales tax projects will be nearly $1 million.  With a city that lacks clear paths to revenue, how are they going to say no in the end?

    In addition to the fiscal impact, here are five key points that point the way.

    There is a fundamental flaw in the Sales and Use Tax calculation City Hall has shared with the Finance and Budget Commission.  Instead of using student incomes and average annual discretionary spending of $2,800 to $2,900 a year (as documented to the DPAC by Matt Kowta of Bay Area Economics) the City’s model uses the city-wide average figure of $7,406.  That means that the Sales Tax estimate the City has provided is over-stated by 60%.  Instead of $185,620 in Year 1 the more accurate Year 1 number is $72,684.  Over the 15 years of the City’s model that is a $3.5 million overstatement of Sales and Use Tax revenue.

    That is not the only assumptions error in the fiscal projection shared with the FBC.  I will provide a complete article here in the Vanguard tomorrow.

    1. Keith Echols

      I mentioned elsewhere that it’s not like the students are going anywhere else if they don’t live in University Commons…they’re still going to order everything off of Amazon buy from Target and spend money and cheap restaurants, coffee shops and pubs……so I don’t see any projected sales tax revenue from those students living at University Commons as a positive revenue source for the city.

  10. Ron Oertel

    David:  But again, even if there was a discussion in 2015 for a redevelopment with commercial only, the economics have changed considerably since 2015. 

    The article notes that the plan was for commercial-only, two years ago.  That would be in 2018, not 2015.  The article literally states that (according to the developer), staff “urged” the developers to add housing at that time.

    This is a point that has gotten lost in Ron’s insistence.

    It’s not “my” insistence.  It’s literally in black-and-white print, in more than one Enterprise article.

    So the question remains, who is lying?  Or, is this just sloppy reporting?

    How is it that you believe that you can continue disputing something that was literally reported, in Davis’ primary news source? And are attempting to do so by ignoring the dates, as well?

    Can you see why the Vanguard itself is not viewed as a good source for information, according to the city survey?

    1. David Greenwald Post author

      I don’t think anyone is lying. I wrote the article based on two factors – the statement by George Phillips and my overall understanding of the economics of development based in part on the davis downtown analysis (but also the proforma on affordable housing said basically the same thing). Even if they originally were thinking about a remodel, we don’t know what that entitled, when it was, or how far it went – other than it never got to even an application phase – the first application was mixed use. So we are arguing a point that really isn’t that relevant to the point I was trying to make.

  11. Ron Oertel

    I’ll just go ahead and re-post the citation, from above:

    Brixmor which purchased University Mall in 2004, began the redevelopment process two years ago.

    Brixmor representatives said at the time, and that was the original plan — to spruce up the city’s oldest mall.

    It was city representatives, Brixmor staff said, who urged mall owners to consider not just renovating the mall but thinking bigger by adding housing.

      1. Ron Oertel

        The date was provided earlier in this thread.  It’s within the past two weeks, after the Planning Commission rejected the proposal, 7-0.

        1. Ron Oertel

          That is a possibility, though it wouldn’t change the fact that the original plan was for a commercial redevelopment, until staff got involved.

          Which would presumably indicate that it was viable, at that time.

          I understand that the same thing occurred with MRIC.

          1. David Greenwald Post author

            Actually she didn’t say the original plan was commercial redevelopment, she said, “to spruce up the city’s oldest mall.” They could have been planning to simply do upgrades to the existing structure, which probably is feasible. Actually redevelopment requires more capital. This gets back to my initial point that we don’t know what it entailed. When I talked to them in June 2017, it was mixed use.

        2. Ron Oertel

          You’re splitting hairs, here.  And, if you don’t like the wording I posted, here’s another (from the article you posted):

          Brixmor, which has owned University Mall for 14 years, initially planned to modernize the 52-year-old mall, but in talks with city staff, was encouraged to add residential units as well.

          “Spruce up”, “modernize”, whatever. Perhaps something short of tearing it down and rebuilding it with housing.

          Until staff got involved.

  12. Ron Oertel

    I don’t think anyone is lying.

    Someone is, or it’s sloppy reporting.

    I wrote the article based on two factors – the statement by George Phillips and my overall understanding of the economics of development based in part on the davis downtown analysis (but also the proforma on affordable housing said basically the same thing).

    Who is George Phillips, what did he say, and when? Is this documented somewhere?

    What does the downtown analysis have to do with this large property?  And, what does Affordable housing have to do with the (original) commercial proposal?

    Even if they originally were thinking about a remodel, we don’t know what that entitled, when it was, or how far it went – other than it never got to even an application phase – the first application was mixed use. So we are arguing a point that really isn’t that relevant to the point I was trying to make.

    This thread started as a result of your claim that a commercial proposal was never viable.  And yet, that was the original plan, two years ago.  Until staff got involved.

    I understand that the same thing occurred regarding MRIC.

    So, if commercial is “not viable”, why do these developers initially propose it?  Are they incompetent?  Or, do they then work with staff to pursue a more profitable option, for themselves?  (Otherwise known as “bait-and-switch”?)

  13. Ron Glick

    Okay so you guys disagree on how we got here but do you need to go on for 30 posts about it?

    I want to comment on only one of the comments:

    “Don’t you think that staff would have a concern, if false claims are being made about them in the main news source, for Davis? (Coming from the developer, no less? And – within the last two years.)”

    Maybe, maybe not. Depends on if they think its important.

  14. Keith Echols

    While I strongly prefer no new student housing approved by the city, David is right about the realism and practicality about approving a student housing project for this property.  I don’t like it but I won’t be up in arms if it’s approved.

    What is the retail component compared to the housing element in the proposed project?  What I’m getting at is will the retail side of the project financially support the long term impact of the new housing?  If the housing is primarily students, those students would have lived in Davis or on campus so their spending dollars aren’t going anywhere weather they live at the new housing or on campus.  So I wonder what the financial benefit to the city is when you factor in the cost of new housing (additional services…etc…) compared to the economic benefit.

     

    On the other hand I would really like to see those pro formas (I used to create these things a long time ago) and the underlying assumptions behind them.  Pro formas by the developer are going to skew towards the developer’s goal and their goal is what is optimal for them for return on investment….meaning the path of least resistance....ie…it’s easier and safer (less risky) to sell apartments and condos than retail space….not so much that retail space won’t work there on it’s own.

    I wonder how retail space and class A/B office space would do there?  What is the proposed Floor to Air Ratio for the project and what is FAR in the surrounding structures?  And will it really obstruct anyone’s view?  Are there plans for a parking garage or podium parking in the back?

     

      1. Bill Marshall

        Rog G… reality is below 6 feet, it is not all Class 1 soil… geology is not simple… but if Class 1 soils exist, it could be ‘recycled’ … with enough $$$$$, and assuming you have a place to recycle it to… but perhaps you were just being facetious…

        1. Ron Glick

          Only partially facetious. One argument against building on ag soil is that it is lost forever. In this case, if they dig it out and move it, maybe not.

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