Monday Morning Thoughts: Five Steps I Would Like to See to Push for Economic Development

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By David M. Greenwald

Davis, CA – The good news is that the city is not plunging into the deep deficits that were feared when the economy shut down a year ago.  While that alleviates the immediate need for budget cuts, it does not get us off the hook, as we still have long-term sustainability problems and an ongoing structural deficit.

The city faces a roughly $10 million shortfall in what it has versus what it needs.  A big problem is that the city still lacks a reliable sales tax base outside of its core services that are offered.  That’s not going away and, with changes to how business is done post-pandemic, it may well become far worse.

At the same time that the city faces huge shortfalls in funding for critical infrastructure, the voters have not been inclined to help.  A parcel tax in 2018 failed that would have provided $3 million a year for infrastructure, especially roads.  And the Innovation Park proposal on the ballot last November was narrowly defeated.

A decade ago, the community and business leaders forged a plan — the Dispersed Innovation Strategy which came out of the Studio 30 report, DSIDE and the Innovation Park Task Force.  That ultimately led to the hiring of a Chief Innovation Officer and the solicitation of several proposals for innovation centers, and finally the loss of Nishi in 2016 and DISC in 2020.

A few years ago I asked the city if they needed to go back to the drawing board but they felt the Studio 30 report, Dispersed Innovation Strategy, and ultimately DISC were sufficient.

But with the loss of DISC and the rapid shift in the landscape it is time to revisit previous concepts and figure out perhaps a new way forward.

Here I lay out five suggestions for the city, in no particular order.

Create a New Economic Development Commission

The city disbanded their Business and Economic Development Commission (BEDC) about a decade ago.  It also disbanded their Innovation Park Task Force, a more temporary group, when it appeared that they had completed their work.

It is time for the city to double-down on a commitment to push for economic development — and that means to get citizen input to help plan and recruit businesses to come to Davis.

New Economic Development Plan

Studio 30 arose out of the last session which created the dispersed innovation model.  But two of the three planks have collapsed — Nishi with the 300,000 square feet of innovation space was defeated in 2016 and replaced with an all-housing model that passed.  DISC failed in 2020.  Replacing Nishi, perhaps, are ventures like Sierra Energy’s Area 52 and the University Research Park.

At the same time, we have seen the University partner locally with HM Clause to create a small innovation center, and in Sacramento with the City of Sacramento to create Aggie Square.

In the meantime, not only has Sacramento moved forward, but so too has Woodland and West Sacramento.

The city needs to partner with the University to create a viable plan with full support and buy-in from UC Davis.

New General Plan

Everything hinges on a new General Plan because the previous one is now two decades old.  One area that I think we need to continue to look at is pre-approvals of land for projects.  Contrary to the claims of some pushing back against this notion, this is not an end run around Measure J.  It requires a vote in advance.  It requires baseline features and an EIR.

One of the problems with DISC was that — unlike a housing project — an economic development project, until there are actually entitlements and infrastructure and tenants, is going to be vague and ill-defined.  That didn’t work well for the public.  A pre-approval process could allow for the flexibility needed to get a project like this approved.

And it can still lay down protections against things like density, number of housing units (or whether housing will be allowed) and the like.

A Dedicated Chief Innovation Officer/ Economic Development Director

The city had this in Rob White.  Currently the city has Assistant City Manager and Community Development Director Ashley Feeney heading up both Community Development and Economic Development as well.

With all due respect to him, that’s not what the city needs right now.  The city needs someone who can execute the plan and go and recruit companies — filling existing space and ultimately filling newly developed space.  And they should focus on that without worrying about the land use issues and land use wars that go on in town.

Finally Replace the Innovation Park Task Force/DSIDE Process

One thing I noticed is that by the time DISC got on the ballot, all of the energy that was around from 2010 to 2014 was gone.  There was no grassroots movement.  You didn’t see a huge number of entrepreneurs, venture capitalists, and innovators on the front line.

The original process was not a developer-driven process.  In fact, there were no developers involved until 2014.  But all of the grassroots energy had subsided by the time DISC finally got around to getting a project to the voters six years later.

A lot of things went wrong.  But most notably gone were things like DISDE, the Innovation Park Task Force, Jumpstart Davis, Davis Roots, and a whole host of other grassroots community involvement.

Can we recapture that energy and moment?  That is hard to know.

The other problem, though, was something I observed when I started attending meetings in 2013 and 2014 on Innovation efforts — we only had a portion of the Davis community involved.  It was very noticeable when you looked around the room at the people involved in the meetings that the environmental and slow growth communities were not involved in the planning,  and therefore they were not there to provide the kind of vital feedback and pushback that would make the ultimate plan resilient.

Whether the city can ever recapture that kind of energy it once had is debatable.  But creating a new citizen’s based task force and this time making sure that all parts of the Davis room are involved is vital to any effort going forward.

—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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22 thoughts on “Monday Morning Thoughts: Five Steps I Would Like to See to Push for Economic Development”

  1. Matt Williams

    A decade ago, the community and business leaders forged a plan—the Dispersed Innovation Strategy which came out of the Studio 30 report, DSIDE and the Innovation Park Task Force.  That ultimately led to the hiring of a Chief Innovation Officer and the solicitation of several proposals for innovation centers, and finally the loss of Nishi in 2016 and DISC in 2020.

    A few years ago I asked the city if they needed to go back to the drawing board but they felt the Studio 30 report, Dispersed Innovation Strategy, and ultimately DISC were sufficient.

    The city disbanded their Business and Economic Development Commission (BEDC) about a decade ago.  It also disbanded their Innovation Park Task Force, a more temporary group, when it appeared that they had completed their work.

    .
    With the exception of the hiring of Rob White, who did understand that an Economic Development plan needs to cover both the supply side and the demand side of economic development, all of the above-described efforts covered only half of what was needed.  They looked at economic development only from the perspective of the supply of land available to build buildings and facilities.  Other than hand waving (at the 40,000 foot level), they never paid any attention to whether there was (or would be) sufficient demand in the Davis economy to fill the proposed supply of space.

    There were two key components of demand in the Davis economy at the time, Schilling Robotics (as both a lead tenant and a tenant that needed more space) and the intellectual capital engine of technological research at UC Davis.  By the time November 2020 rolled around (a full nine years after the Studio 30 report was delivered in December 2011), Schilling had grown tired of waiting and chosen to move to greener pastures, and all UC Davis could muster as an endorsement for DISC was that “The University does not oppose the project.”  Both those developments were living proof of the complete absence of understanding of the demand side of an Economic Development Plan.

    Until Davis makes a meaningful attempt to understand the actual demand in the Davis economy to bring actual companies to Davis, any economic development plan will only be half a plan … and more than likely only a pipe dream, or smoke and mirrors, or the emperors new clothes (you choose the metaphor).

    1. David Greenwald Post author

      “Until Davis makes a meaningful attempt to understand the actual demand in the Davis economy to bring actual companies to Davis, any economic development plan will only be half a plan … and more than likely only a pipe dream, or smoke and mirrors, or the emperors new clothes (you choose the metaphor).”

      That is presuming the outcome before a process is even conceived.

        1. Bill Marshall

          Not until we convene a task force to recommend/determine/decide what stake-holders, interest groups, individuals should be included on the subcommittee… subject to a Measure “Y” vote to concur with the task force’s actions…

  2. Todd Edelman

    grassroots involvement.

    How is that the groups you mentioned are “grassroots”, but the vary vague

    environmental and slow growth communities

    are not?

    not there to provide vital feedback and pushback [pushed back?] against the ultimate plan.

    This conspicuously presumes that their feedback would have been listened to and incorporated and the plan would have been all groovy and accepted, that the peripheral, I-80 force-fed location was not inherently anti-sustainable.

    new citizen’s based task force
    all parts of the Davis room are involved

    are somewhat empty (campaign) terms based on what we have seen lately of Council and some staff

    Also, why the image – and apparent attempted-best practice example – from a business park a few miles from the center of Cambridge,  England? Also more than twice as close time-wise to London compared to DISC to San Francisco.

    But anyway, one thing I noticed here is a completely separated from traffic partly multi-use path / partly dedicated cycleway from the “Platinum Building” to the brand new train station just over a mile away (the equivalent absolutely not promised directly by the DISC developers), that this station is served by two operators that – off-peak – provide way more rail service than what currently happens at Davis Depot, that the station has bicycle parking that FAR exceeds what’s supported directly by DISC developers for Davis Depot – hundreds of business park employees could alight here and take their own bikes to work and be there in less than 10 min – and finally that the business park connects directly to the residential area on the north side of the motorway via a very new-looking bike-ped bridge, making a journey by bicycle or foot probably the best choice by people who live here or a bit further. And – that’s right! – DISC developers refused to make the 80-Mace crossing have any similar level of convenience and safety. Lying to children about their safety is child-abuse. Let’s see if the Mayor encourages the relevant innovation commissions to provide some menu items on this issue. 

    This business park – “innovation park” is a marketing term – is not in the center, but it’s also not on the periphery of this urban area. (In addition to the cycleway to the train station there’s also a guided busway from the station and other areas that stops at its edge.)

  3. Mark West

    If we want economic development to be a priority, then we need a City Council that will make it a priority, not another commission or more rounds of consultations and plans that will only be ignored.  The way to make ED a priority is to write it into the employment contract that the City Manager’s compensation is dependent upon specified measures of ED success. If we had done that with the current CM we likely would not now have a community development director whose professional career has almost entirely involved building housing. Until the CC is ready to demand a change of direction, backed up by three votes willing to remove the CM if necessary, there will be no improvement in the City’s economic development future, regardless of how many commissions or committees we create or the number of years we spend talking about the problem.

    1. Matt Williams

      It is very hard to argue with any of the points that Mark West has made.  If Davis is serious about economic development, our community needs all the things Mark has described.

      The one place where Mark and I differ is whether there needs to be a plan.  The last 20 to 25 years in Davis have been a history of one civil war after another after another. The form and details of each war have been different, but wars they have been. If a City Council and City Manager are going to exercise their power to act on a change in direction, I believe they need to create an environment where they are not constantly fighting legal battles in court with citizens who believe that there is no legitimate General Plan authorization for the unilateral change of direction that the City Council and City Manager have embarked on.

      Efficiently updating the General Plan in a way that the community knows what to expect, and feels that they have had an opportunity to be heard about the community’s future, is, in my opinion, a positive proactive step toward reducing the likelihood that lawsuits will be filed by citizens who believe that there is no legitimate General Plan authorization for the unilateral change of direction.

      Circling back to Mark’s comment, what I hear him saying about the City Manager is that that person needs to be an economic visionary, and be just as much the Chief Innovation Officer as the City Manager.  He can let us know if that is what he has in mind.

      1. Richard_McCann

        I agree  with Matt’s point. Mark is frustrated with the slow process of politics, but the Council cannot act without some type of mandate from the body politic and that mandate doesn’t currently exist. The reason is that we haven’t developed and articulated a vision of where Davisites want to head once they have been well informed about the choices that they face (which hasn’t happened yet). Developing a plan that is well vetted should accomplish that.

        1. Matt Williams

          Richard does a good job of expanding on my point.

          One of the challenges that the path of economic development faces is that any recurring additional annual revenue that may come to the annual budget of the City (as a municipal jurisdiction) will not happen for the first five years of the development, and will only increase gradually at that point.

          That is important because when the Vanguard says in the second paragraph of the article “The city faces a roughly $10 million shortfall in what it has versus what it needs” that annual budget shortfall is here and now, so the delayed revenues from economic development will not help reduce that shortfall for at least five years.

          For what it is worth, in his January 2020 presentation to the FBC, Bob Leland showed the aggregate Shortfall as $258 million (over $12 million per year).  Since then the Council has approved the Fire Department Ladder Truck (unfunded at $1.26 million per year) and has the impending unfunded Mace Mess reconstruction costs of between $2 million and $3 million.  So the article probably should more accurately read The city faces a roughly $14 million shortfall in what it has versus what it needs”

          As FBC Chair Michelle Weiss has said, “We know we are in a serious world of hurt financially no matter whether it is $8 million per year or $10 million per year or $12 million per year.”

        2. Mark West

          “but the Council cannot act without some type of mandate”

          Apparently, Richard believes that history started when he moved to town. The reality is that the Council has repeatedly refused to act on economic development even when given a clear mandate from the community, starting with the original Core Area Specific Plan back in the early 60’s and continuing through to the current (and now grossly outdated) General Plan, where the Council made significant changes before the ink had dried. His demand for yet another round of ‘meetings’ is nothing but an effort at delay, an approach he seems to share with Matt. Paralysis through analysis…

          The one guarantee from their efforts is that our taxes will continue to rise unabated. Woohoo!

        3. Matt Williams

          The one guarantee from their efforts is that our taxes will continue to rise unabated. Woohoo!

          Again, it is very hard to argue with any of the points that Mark West has made … with one exception, “paralysis by analysis.”  I’m not seeing the need for a lot of additional analysis.  Demonstration of the market demand for innovation space won’t happen through analysis.  It will happen through good old-fashioned leg work … documenting the pipeline of demand as each step of the leg work happens.  Right now there is not even the slightest whiff of a lead tenant for an innovation center.  Right now any collaboration with the University can be summed up with their published words, “UC Davis does not oppose the project.”

          One immediate step that the City and the University and the entrepreneurial community could take would be to commit to an aggressive plan for redeveloping/reconfiguring some of the long list of commercial vacancies into the kind of wet lab space that Tim Keller has written about.  The Commercial Vacancies graphic at the end of this comment is from 9 months ago, and some of the pictured vacancies may have been occupied, but the number of additional vacancies far outnumbers the ones that have been leased.  Without redevelopment/reconfiguration within the building, most of those vacancies are going to be long-term.  If the demand for wet lab space is truly there, then why are those vacant spaces simply lying fallow.  With some capital investment in wet lab capabilities they could be generating monthly rent payments.

          Davis appears to care more about waiting for a home run rather than producing a bunch of singles and doubles.

          We have met the enemy and they are us.
          https://www.davisvanguard.org/wp-content/uploads/2020/10/Commercial-Properties-for-Lease-or-Sale-1-33a.jpg 

  4. Ron Glick

    “If we had done that with the current CM we likely would not now have a community development director whose professional career has almost entirely involved building housing.”

    The biggest industry in the City of Davis is the rental business.

    1. Mark West

      “The biggest industry in the City of Davis is the rental business.”

      For which the City gets little to no extra revenue (beyond the existing property taxes).

       

  5. Ron Glick

    Of course new construction of rental housing would have a high prop 13 tax base. Add to that all the add ons like CFD’s and it starts adding up.

  6. Ron Oertel

    It was very noticeable when you looked around the room at the people involved in the meetings that the environmental and slow growth communities were not involved in the planning,  and therefore they were not there to provide the kind of vital feedback and pushback that would make the ultimate plan resilient.

    I think it worked out exactly as planned, and that the developers received both “feedback” and “pushback” that will hopefully be resilient.

    Don’t spread beyond Covell or Mace. Appreciate it, the next time you stop at Ikedas, and look out over the farmland. Without being stuck in traffic, either.

     

    1. Richard_McCann

      Having been intimately involved with review of the DISC project, I can say that if the developers had done a couple of things differently in that process, they likely would have swung the few percentage points they needed to gain approval. (They lost my vote, and I know several others who were unconvinced and voted “no”.) Would Ron O then be saying that Davis voters had definitively supported much greater economic development? The greatest political fallacy is to interpret a win by a small margin as a mandate…

      1. Ron Oertel

        Go ahead and speculate.

        I’ll be waiting . . . 🙂  I figure that this time, we can canvass in-person.

        And be sure to keep that pencil sharpened, regarding the fiscal and other costs associated with the additional sprawl that would surely result – beyond the development itself.

        I’m reminded of Dirty Harry’s line, “do you feel lucky, punk”? (Not directed at you in particular.)

        In any case, I figure they’ve got to raise at least $30, for every $1 of the opposition. A very effective use of funds, and quite satisfying.

        1. Craig Ross

          “I figure that this time, we can canvass in-person.”

          That’s a huge disadvantage to your side.  The students were gone last time.  When I was working on Nishi, we outwalked the opposition covering the city twice over.  I’m guessing they weren’t able to walk at all last year. That’s probably a big reason the project narrowly failed.

        2. Ron Oertel

          Well, Craig:

          I find it disgraceful that some students (and/or recent students) associated with developer advocacy organizations (such as Spafford and Lincoln) somehow “overlook” their stated concerns regarding global warming and housing shortages, while “advocating” for a commuter development (with 5,000 plus parking spots) adjacent to a freeway.

          I find these people to be among the easiest to beat, regardless of how many are hired, or how they may be directed. Even when they try to create division by age range.

          Personally, I’d suggest that the city (along with most/all other cities in California) examine how they got themselves into a fiscal challenge in the first place.  And then, I’d follow it up with “not doing that again”.

          And while they’re at it, perhaps existing commercial sites (which are unused, or under-used) should be examined before advocating for sprawl.

          In any case, you and the Vanguard can speculate all you want. I’d suggest that the entire council endorse a proposal, with a couple of them taking the lead. Along with a questionable fiscal analysis, another Studio 54-type report, maybe an “innovation officer” or two. For starters.

          Oh – and don’t forget the new traffic study and EIR!

          Then, the campaign can begin again.

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