Monday Morning Thoughts: Vacaville Goes for It – $2B Biomanufacturing Center, 10K Jobs – What Does This Mean for Davis?

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By David M. Greenwald

Late last week, Vacaville put their foot in the big time game—300 acres, a world class biomanufacturing center that could produce 10,000 jobs.

The city also announced the creation of the California Biomanufacturing Center Inc., a nonprofit “intended to accelerate the growth of the sector in Vacaville by working with industry and academic partners.”

This would be larger than DISC—$2 billion in industrial development, 3.5 million in commercial real estate, 10,000 jobs, and payroll of more than $1 billion a year.

“Vacaville has the land, infrastructure, and workforce that the biotechnology industry needs to grow, as well as a long-standing commitment to make doing so a streamlined and efficient process,” Mayor Ron Rowlett said. “With the California Biomanufacturing Center, we are building on our proven success with the industry to secure Vacaville’s continued leadership as a biomanufacturing center going forward.”

At the unveiling press conference last week included everyone from Representative John Garamendi to Solano Community College President Celia Esposito-Noy and California Biomanufacturing Center President Matthew Gardner.

Here we have Vacaville—50 miles northeast of San Francisco, between UC Berkeley and UC Davis.  In 1994, Genentech acquired land for its biologics manufacturing facility. According to their press release, the facility is said to be among the largest biotech drug manufacturing complexes in the world.

“The United States must not only rebuild its once robust manufacturing sector but do so with an eye toward the types of advanced manufacturing that will define the future,” Garamendi said in the announcement. “The biomanufacturing strength of Vacaville represents an important opportunity for us to grow the types of high value jobs with career wages that are essential to our country’s future success while at the same time strengthening our nation’s strategic competitiveness and security.”

There is Senator Bill Dodd.

“Growing biomanufacturing will help build a sustainable economy for the region and the state,” Dodd said. “This will create good paying jobs in an environmentally friendly way and help us secure a prosperous future.”

What does this mean for Davis?

First of all, it gives lie to the argument that this is the wrong time to invest in economic development.  Throughout the Measure B campaign, we have heard opposition to the project arguing that this is the wrong time, we are in the middle of a pandemic, people don’t need physical space.

Investors are putting up $2 billion—private-public partnerships, non-profit and for-profit collaborations—and saying that this view is wrong.  I have argued that even if office space demand drops during and even post-COVID, we still need space for R&D, wet labs, bio tech and ag tech space, flex space, and the like.

If Solano Community College can support a 3.5 million square foot facility, imagine what UC Davis, a world class university, can support.

Second, the rest of the region is not going to wait for Davis.  We now see major investment in all of the cities—Sacramento, West Sacramento, Woodland, and now Vacaville.  Davis in nine days can either open its door or shut it.

Third, as a commenter noted yesterday, the environmental argument is silly.  People are going to commute to these jobs, the only question is whether those jobs are in Davis generating jobs and revenue for our community, or whether they are located in West Sacramento, Woodland, or Vacaville.  The carbon footprint is going to be the carbon footprint.

Is this good or bad for Davis?  I think there is demand to support all of it.  But what this shows is that if Davis votes down DISC in 9 days, the region is moving on without Davis.  The next Genentech will not be located in or near Davis and will not help Davis generate the revenue.

There have been a lot of faulty arguments posed against DISC in the last few weeks and since the project was put on the ballot.  The worst, however, is the notion that somehow there is a lack of demand for these type of projects.

People with money, investors, actually have been saying the exact opposite.  They argue that the future of our region are things like biotech and agtech—things that will always need physical space—and R&D that can develop the technology to deliver biomedical solutions to our crises, as well as high tech solutions to climate change.

The only question is whether those companies, many of which will spin off from UC Davis like Genentech, will locate in Davis or down the road in Vacaville or up the road in Woodland.

The difference between Davis and these communities is that not only does Davis host the world class university, but Davis has the land use provisions to make it difficult to develop these projects.

Vacaville’s mayor said: “Vacaville is the envy of many communities that have dreams of becoming a center for biomanufacturing, but lack the talent, commitment, and space to do so.  The center will not only work with industry to address manufacturing challenges but ensure that Vacaville remains a place for biomanufacturing to flourish.”

Davis could potentially make a similar statement next week.  Or it could take itself out of the game at a critical time.  There is not likely to be a second chance.

—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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46 thoughts on “Monday Morning Thoughts: Vacaville Goes for It – $2B Biomanufacturing Center, 10K Jobs – What Does This Mean for Davis?”

  1. Keith Olsen

    What?   Maybe I missed it but I don’t see any housing in the picture provided or any mention of a housing component in the article.

    How can the Vacaville innovation park be feasible without housing?

    1. Keith Echols

      Does Vacaville have an equivalent to Davis’ Measure J?

      No Measure J no crunchy green organic designs; parking spots for solar powered kayaks, commuter lanes added for hybrid wind powered horse back riders…. to add to the cost of the project.  Also I wonder if Vacaville’s biz park center has access issues that DISC and the city of Davis are going to have to figure out and pay for.

      1. Ron Glick

        The Vacaville biotech hub that includes Genentech, Alza, now a subsidiary of Johnson and Johnson, and other companies is located at the junction of I-80 and I-505. The location helped Genentech with technology transfer from its South San Francisco headquarters.

        It has an excellent water supply from Lake Berryessa, a water project that Yolo County declined to participate in building in the 1950’s, and, gets no water from as a result. However UCD did participate back in the 50’s and gets a share of its water from Berryessa.

        Since Genentech located there a Kaiser hospital and Medical Center has been built and new housing has been constructed to provide shelter and short enough commutes for the workers to bike to work if they choose or a short drive to many retail options.

        Vacaville is doing it right in the 21st Century while Davis romanticizes its agriculture commodity production economy of the 19th Century.

        1. John Hobbs

          “Vacaville is doing it right in the 21st Century while Davis romanticizes its agriculture commodity production economy of the 19th Century.”

          Amen.

    2. Alan Miller

      How can the Vacaville innovation park be feasible without housing?

      The under-paid workers will live in their offices and sleep under their desks like  George Costanza.  For food, the employers are required to provide unlimited food tokens for the nearby Taco Bell.

    3. Keith Olsen

      Evidently that’s not a photo of the project – it’s Genentech’s Vacaville campus on May 16, 2008

      You posted the pic David.  So is there housing planned for the Vacaville innovation park?

      Can business parks actually pencil out without housing being included in the plans?

      1. Ron Oertel

          So is there housing planned for the Vacaville innovation park?

        I’d like to see David’s response to that, as well.

        I’m pretty sure that it’s “marching up Highway 505”, toward Winters (for one thing).

        Developers are acutely aware of freeway access, especially when they haven’t fully consumed it, yet. (It’s amazing how fast they do, though.)

      2. David Greenwald Post author

        I posted the photo that came with it.

        They need a means to finance it. In this case, it looks like they have a lot of sources to do so. In the case of Aggie Square, they have government subsidies. Non-profits have access to grant money. Genentech might have deep enough pockets to just finance it.

  2. Matt Williams

    “With the California Biomanufacturing Center, we are building on our proven success with the industry to secure Vacaville’s continued leadership as a biomanufacturing center going forward.”

    .
    DISC (and Davis) would be in a very different situation if it had “proven success” to build on.   Leveraging proven suceess goes a long way toward mitigating uncertainty.

    First of all, it gives lie to the argument that this is the wrong time to invest in economic development. Throughout the Measure B campaign, we have heard opposition to the project arguing that this is the wrong time, we are in the middle of a pandemic, people don’t need physical space.

    .
    Two very different projects. DISC is an Office/R&D/Flex project with housing. Manufacturing is nothing more than the tail on that dog. Vacaville’s is a manufacturing center pure and simple.

    I have argued that even if office space demand drops during and even post-COVID, we still need space for R&D, wet labs, bio tech and ag tech space, flex space, and the like.

    .
    And yet according to the EPS economic analysis competed for the 3820 Chiles Road project Davis has a 14% vacancy rate in its current exiting R&D/Flex space real estate square footage.

    If Solano Community College can support a 3.5 million square foot facility, imagine what UC Davis, a world class university, can support.
    .
    The educational prowess of Solano Community College isn’t supporting this, Vacaville’s existing leadership as a biomanufacturing center is supporting it.

    1. Ron Glick

      Davis’ lack of vision is epic across decades. Genentech looked at Davis before settling on Vacaville. While Vacaville pursued Genentech Davis did not.

      We have a world class university. Our failure to leverage that success is because we refuse to get out of our own way.

       

      1. Matt Williams

        I don’t disagree with your bottom line Ron G.  As a community we have a near total lack of vision.  We also have a university that to all appearances is inward looking … focused on itself and its own internal activities and interpersonal politics.  That has worked well in the world of academics and pure research, but has not translated in the translation of  applications of that research into the private sector.

        When Genetech made its decision to go to Vacaville, they were pioneering. That was indeed the time when Davis had a real opportunity. Now Davis is trying to pioneer in competition with the well-established, no longer pioneer community surrounding Genentech.

  3. Ron Glick

    “The difference between Davis and these communities is that not only does Davis host the world class university, but Davis has the land use provisions to make it difficult to develop these projects.”

    Yet you voted yes on D.

    Stupid is as stupid does.

  4. Ron Oertel

    What is means is that Vacaville will continue spreading outward (e.g., up Highway 505) like an uncontrolled cancer.  In other words, business as usual, in most valley towns (and beyond).

    And when the cost of serving those new developments is realized, somehow there’s always “no money” left for the cities.

    Developments take advantage of freeway access, up to (and beyond) the point of the gridlock. That’s the pattern, and the reason that sprawl is continuing.

    1. Keith Echols

      Does that mean that Davis should decide not to participate in economic expansion, sit and do nothing while other cities reap the tax revenue benefits?  But hey, at least Davis can continue to be eco-self righteous while not actually effecting anything environmentally…because that expansion, people and jobs just went to those other cities….they didn’t disappear.

      1. Ron Oertel

        There’s plenty of cities which have chosen not to (or can’t) sprawl outward, which are doing pretty well (in terms of business activity).

        Interestingly enough, economic activity doesn’t necessarily have a direct relationship to fiscal health.

        I believe that San Francisco, for example, experiences significant fiscal challenges. So do cities throughout California which continue to pursue sprawl.

        The Ponzi scheme merely kicks the can down the road for awhile. So far, that’s been the “plan” throughout California (and beyond).

        1. Ron Oertel

          A lot of this goes back to unfunded liabilities.  How was this even legally allowed to occur (throughout California)?  (Here’s a hint – they were counting on the Ponzi scheme to continue, indefinitely.)

          Then, there’s the “pay-as-you-go” model.  “Approve it today, pay tomorrow.” Which dovetails quite nicely with the Ponzi scheme – until it no longer works.

          Then, there’s the folks behind the oversized school district, but that’s another (related) topic. But, some of those folks who are big fans of the Ponzi scheme. After all, it’s “for the kids” as they say. But not to worry, as they like to say that it will increase your home value, as well. (Sort of like how the Lottery is “for the kids/schools”.)

        2. Keith Echols

          You’re making general and inaccurate apples to oranges comparisons about various CA cities fiscal health.

          Most business is built on what you call a “Ponzi Scheme”; which is simply borrowing or  obtaining capital for investment and growth based on future expected returns.  You can critique the assumptions built into those projected returns.  But borrowing and obtaining capital based on future projected returns is how finance works.

        3. Ron Oertel

          The “Ponzi scheme” reference was not made in regard to developer profits.  There’s a reason that they’re generally well-off.

          I’m speaking of cities, themselves.  And as far as I know, there are very few exceptions in California.

          The cities get the crumbs, but all of the costs. (Including the unfunded liabilities and long-term infrastructure costs). As long as the Ponzi scheme continues, no one notices.

          It will be interesting to see what happens if California approves the split-role tax scheme next week. My guess is that you’ll see a lot more businesses leaving California.

          At some point, someone has to pay something. Seems like we always want someone else to do it. Either that, or stop giving away the store, regarding pensions and medical benefits.

          1. David Greenwald Post author

            The big problem is failure to contain costs. You have to increase revenues and contain costs at the same time.

        4. Ron Oertel

          The big problem is failure to contain costs. 

          That’s right, and they never will.  There is nothing requiring them to do so, in the long term.  And when corrupted or ignorant politicians get elected, that’s when there’s “deja vu all over again”, to paraphrase Yogi.

          In fact, even the recent councils continue to approve raises (and resulting pension costs).

          Same thing with school districts.  Maybe even more so. Maybe I shouldn’t acknowledge this, but I’ve developed a particular dislike for some who advocate for sprawl on behalf of schools (meaning, “themselves” – one way or another). And truth be told, schools are sucking-up too much tax money across the entire state, which could otherwise go to support cities. (There’s examples of that, regarding Davis’ oversized school district. It is flat-out larger than what the city actually needs. That’s why they’re poaching kids from out-of-district, to avoid addressing that fact.)

          Unlike revenue, which is limited by Proposition 13.

  5. Alan Miller

    What does this mean for Davis?

    An even more constipated I-80 as the economy returns.  Patterns are unfortunately showing that auto sales are way up, and transportation ridership is in the tank, as people more-and-more view their cars as germ-free, private zones in which to transport themselves and their families.  This could portend even more traffic than pre-Covid-19 levels as the pandemic starts to break.

  6. Tia Will

    it gives lie to the argument that this is the wrong time to invest in economic development.”

    No. It demonstrates that in an already developed sector, people are willing to make further investments. Those are two very different statements. If you tell me which major company has committed to DISC, I will reconsider my position.

    The carbon footprint is going to be the carbon footprint”

    This makes it sound as though this is set in stone instead of a matter of choice. It sounds for someone in my field like just giving up and letting the pandemic kill as many as it will. Oh, wait a minute, that is what much of the country has chosen. But can we at least admit it is a choice, not fate?

    I know this is an unpopular opinion, however, I do not begrudge Vacaville this facility. I believe in regional cooperative development. Davis has the university. It seems entirely reasonable to me for other cities in the region to benefit from the presence of the university if they have the needed resources and will to do so.

    1. John Hobbs

      “It seems entirely reasonable to me for other cities in the region to benefit from the presence of the university…”

      And for Davis to suckle off the enterprise of its neighbors, too.

    2. David Greenwald Post author

      One way to think about this. They put up a proposal for DISC, you voted no. If your side prevails, the project will not happen in Davis. But those jobs will go somewhere else, probably somewhere where the standards are not as high and mitigations not as rigorous. That means that the Carbon footprint doesn’t go away, it just shifts. That is the risk of allowing the perfect (or even the better) being the enemy of the good.

      1. Ron Oertel

        Davis doesn’t have the housing to support the increased demand that DISC would create.  Or at least, it’s not as cheap as surrounding communities (which are more than willing to provide it).

        That’s why DISC would be a commuter site.  (Well that, plus the 5,600 parking spaces, adjacent to a freeway.)

        If you want to talk about where that housing would go in Davis (and how much it would cost Davis over the long-term), that might be a good starting point.  Especially for someone who claims to be concerned about housing shortages.

        But again – regardless of Vacaville, the financial analysis shows that DISC doesn’t “pencil out” beyond the stages subsidized by the expensive (but limited) housing at the site.

        1. Keith Echols

          Housing in Davis for DISC is irrelelvant…in fact it’s preferable if there were no additional houses.

          How EXACTLY does DISC not pencil out beyond the stages subsidized  housing?

          I’ve said before that you post a limited binary view: either the project will be successful as the developer has sold it to the city/people or it will be a complete failure.  So what if the initial landlords don’t get their expected leasing rates.  Will there be a painful adjustment for the owner/developers?  Probably. So what if Davis gets $2M in annual tax revenue and not $3.5M.  That’s still $2M more that it gets if it’s not approved.

        2. Ron Oertel

          Housing in Davis for DISC is irrelelvant…in fact it’s preferable if there were no additional houses.

          You apparently haven’t been reading this blog for very long.

          How EXACTLY does DISC not pencil out beyond the stages subsidized  housing?

          I’d refer you to the financial/fiscal analysis, and the concerns of the finance and budget commission.  (I’ve cited this multiple times, already – including direct quotes.) The projected rate of return falls below a level that’s normally required to make a proposal “pencil out”, in the latter stages.

          I’ve said before that you post a limited binary view: either the project will be successful as the developer has sold it to the city/people or it will be a complete failure.  So what if the initial landlords don’t get their expected leasing rates.  Will there be a painful adjustment for the owner/developers?  Probably.
          So what if Davis gets $2M in annual tax revenue and not $3.5M.  That’s still $2M more that it gets if it’s not approved.

          It’s easy, when you “make up” numbers.

        3. Keith Echols

          So what you’re saying is that you don’t know what specifically the fiscal analysis says.  Btw.  I used to write similar financial (pro formas) for development to submit to private equity, hard money lenders and banks.

          You’re assuming the numbers are made up.  OF COURSE THEY’RE MADE UP. They’re projections!  If you’re going to question anything, it’s the underlying assumptions built into the projections.

        4. Ron Oertel

          So what you’re saying is that you don’t know what specifically the fiscal analysis says.  Btw.  I used to write similar financial (pro formas) for development to submit to private equity, hard money lenders and banks.

          The fiscal analysis is available for public view.  Yes, I’ve looked at parts of it, and paid close attention to the finance and budget commission’s review of it.  (As I recall, it includes both a financial and fiscal analysis.)

          Maybe you should look it over, and let us know what you think.

          There’s also a list of questions and concerns that the finance and budget commission’s subcommittee submitted to the consultant. The consultant responded about 2 hours before the final commission meeting. (The entire package was forwarded to the council, and that’s the last I heard of it. I don’t believe that any of the recommendations were implemented – e.g., pushing out the phasing of the housing to ensure that the commercial is built.) However, I did not study that document in detail. (I wonder if the council did?)

          You’re assuming the numbers are made up.  OF COURSE THEY’RE MADE UP. They’re projections!  If you’re going to question anything, it’s the underlying assumptions built into the projections.

          That’s for sure.

           

    3. Alan Pryor

      “it gives lie to the argument that this is the wrong time to invest in economic development.”

      Maybe it is just proving the “Greater Fool Theory”

      But one thing is for certain – If DISC is passed and a propective tenant ever shows up at our doorstep, Ramos and his propective tenants will go to to Council begging for relief from the claimed onerous Impact Fees and Construction Taxes that are really the only economic benefit that will come to Davis from DISC. And what do you want to bet that our weak-kneed Council gives it to them?

    4. Keith Echols

      It seems entirely reasonable to me for other cities in the region to benefit from the presence of the university if they have the needed resources and will do so.  

      So why isn’t reasonable for Davis to benefit from the presence of the university?

      I’m not sure about the rest of your comment.  BIZ PARKS DO NOT CREATE JOBS or people commuting to and fro.  Companies and the jobs they create do.  Those companies and jobs still exist if a biz park is not built in Davis.  They just exist somewhere else.  So there’s been no overall environmental benefit.

  7. Don Shor

    Any development team would look at the political and economic development culture in Davis, and likely decide to go elsewhere. I think that also applies to the economic development team in the UCD planning department.
    The comments on this thread illustrate that culture very well.

  8. Richard McCann

    The new facility in Vacaville can be a good thing for Davis because it increases regional agglomeration in a related field. However, as others have pointed out, this facility is not in direct competition with the agricultural oriented firms that Davis should be targeting. Both Vacaville and Aggie Square are targeting medical industries. Those are sufficiently related to bring both the investment and employees that can shift into the industries that Davis should be targeting. But we need a comprehensive City economic vision to both target the industries we want and build the community consensus that can make these projects easier to build here. Neither of those are happening right now. We need better leadership.

    1. Ron Glick

      “But we need a comprehensive City economic vision to both target the industries we want and build the community consensus that can make these projects easier to build here. Neither of those are happening right now. We need better leadership.”

      Measure J  precludes the kind of economic certainty needed to get projects done. Don’t blame the local leaders their hands are tied. If you want to make the elected responsible vote no on D.

    2. Don Shor

      But we need a comprehensive City economic vision to both target the industries we want and build the community consensus that can make these projects easier to build here.

      I have zero confidence that this will happen. The city leaders worked on an economic development plan for a decade. It was a fully open public process that led to the proposals for business parks in 3 – 4 locations as well as re-energizing the downtown. I see no reason to believe that people who are leading the opposition to the last proposal that emerged from that plan will somehow put together anything resembling a “community consensus” nor will they ever make any projects “easier to build here.” And as Ron G. notes, Measure J/R/D simply makes it nearly impossible to achieve any kind of progress on economic development.

      1. Richard McCann

        Don S.

        The City didn’t have a real visioning plan then. Instead, it was run by a joint venture with a private entity. It never really asked the question “what do we want the City economy to focus on going forward?” We got “the City will focus on R&D for joint ventures with UCD” and then off to developing innovation parks. I don’t think there was sufficient buy in, including from UCD, on this first statement. We need to back up a step.

        And as part of this visioning would be a parallel development of a standard baseline agreement that we can vote on as a replacement to J/R/D (see my previous comments describing this alternative.) I see the single biggest hurdle to community consensus is sufficient assurance of some type that City staff management won’t negotiate away these provisions–that’s where the mistrust is coming from. (And I voted on no on D. I think its segregationist.)

        The alternative to give up completely and just turn into some backwater Central Valley town because we just let the economic opportunities slip away.

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