By David M. Greenwald
Davis, CA – Lost in a lot of other things last November is the fact that while DISC failed the vote of the public, it was a pretty narrow margin – 52-48, or just 1300 votes. Given all of the uncertainty and everything that went wrong in the process, that should give it a fighting chance when the new version comes forward probably in June 2022.
There is a history for this. In 2016, Nishi failed by about 700 votes, came back in 2018 and won overwhelmingly.
Nisi is a good model for DISC to look at. Nishi lost the first time because: (1) Traffic concerns, (2) Lack of onsite affordable housing, (3) Long-term health concerns about people living in for sale.
The new project addressed these: (1) it was a UC Davis only access eliminating the Richards traffic problems, they put onsite affordable housing in the project and they made it a rental only project eliminating concerns over long-term exposure to particulate matter from the train and freeway.
While the new DISC project doesn’t quite address the issues as neatly as Nishi was able to, there are similar factors at play here.
The smaller project was less by design and more by circumstances.
Reynolds & Brown, which owns property that comprised the northern portion of the earlier plan, is no longer involved in the project.
Talking to the development team, I think they would have preferred Reynolds and Brown to remain in the project. But it actually works at least in the short-term to their benefit.
One of the big reasons it failed was traffic concerns. Just look at the map of results and you see clearly that as you get closer, the opposition increased.
Those concerned that 200 acres was too large can take solace in the 100 acre footprint. Those worried about traffic, can note that the parking space number is less than half of that projected for the original DISC. The carbon footprint is less. The impact is less.
We have seen some suggesting that they will simply come back at a later point to get approval for the rest. That’s certainly possible. But it would likely be in 20 years or so and unless something changes between now and then, it would require another vote.
Factors out of their control will line up better for the project.
When we looked at the numbers, it was pretty clear that had more students been on campus, it might have been a different result.
The pandemic overall played against the project. It didn’t seem to ease concerns about traffic, but it increased concerns about changes in economy.
If you look the sizes, the new project reduces office space from 1.5 million square feet down to 630K. Advanced manufacturing is reduced by a far less percentage going from 884K to 550K. It’s subtle for sure, but it notes the shift away from office use while providing the critical space for labs and advanced manufacturing that cannot be done remotely.
Students will return to campus in the fall. The campaign will be able to use their vast network of student labor to canvas which they were largely unable to do.
Moreover, with traffic concerns in the back of voters mind, the project is at least on paper helped by the announcement of the grant for freeway expansion.
Given that a 212 acres, 2.6 million square foot project with 850 units of housing and 4300 parking spaces run during a pandemic only failed by 1300 votes, addressing or at least reducing these issues should give the project a big boost.
Another question that arose during the campaign – commercial demand – is an interesting issue and probably wasn’t decisive in the outcome. But I think we have a bit better data now even there.
Just before the election last year, Mark Friedman of Fulcrum, on a different project noted, “there’s good demand in Davis for research tenancies.” He added, “We’re 98 percent leased.”
We saw the presentation to council by Tim Keller of Inventopia. He’s of course in the early startup market, but his initial results are very promising.
Tim Keller explained that they now have a problem—but the right problem to have.
“Just a few months after opening this lab space, it’s almost completely full. And so we are going to just, right after we do this grand opening, we are going to be right back looking for more space.”
He continued, “I keep on getting more requests. I’m signing letters of intent with people who are going for SVIR funding, that engine of economic innovation that is the university and the tech transfer process is not stopping and there’s more work to be done.”
They are actually looking for more space.
Keller also addressed the idea that we have a lot of vacant space in town that could be utilized for this kind of high tech economic development.
He said, “I’ve seen the post that you’re talking about with all the for lease signs… a quarter of those signs were for retail space, which costs too much and the city doesn’t want to put lab space in a retail location because we want the sales tax revenues from actual retail spaces.”
He also said there’s a bunch of professional office buildings that are marketing to lawyers and accountants, and those kinds of landlords, he said, do not want lab type uses because they requires ventilation and holes and upgrading the electrical power and the like.
He explained, “We’re kind of a high needs constituency because we have a lot of equipment and most landlords and most of those kind of mid-scale and commercial spaces, even though they are professional space and office space, maybe even called medical space, they don’t work as lab and they don’t work as engineering space.”
What they need is R&D flex space.
And while there are some in Buzz-Oates and Interland (now University Research Park), “there is very little supply of them actually.”
He said, “If we want to continue the growth of the innovation economy here in town, we are going to need more small incubator space.”
The AgStart wet lab opened in June in Woodland and Leanna Sweha told the Vanguard it’s already half full.
One thing Sweha told us, there is not nearly enough wet lab space in the Valley. The existing labs are either too expensive for start ups or basically full.
“Equivalent space in the Bay Area would be probably double, if not more the cost, if you’re talking again about shared wet lab space,” she explained.
Finally this week Russ Moroz of Marcus & Millichap brokered a major deal to get a biotech company to move from South San Francisco to Vacaville.
He explained, “the difficult aspect has always been in getting these types of biotech users and and life science users to expand beyond their target areas.”
He explained that that is really Boston, South San Francisco, and Seattle.
“It’s been really difficult to get them to pay attention outside of those markets,” he said. But that is changing.
“Now that housing has become so expensive in a lot of those regions, in a lot of those parts of the country, they are looking for alternative locations because their employees simply can’t afford to live in a lot of those places,” he said.
“What we’re finding is that more and more of those companies are exploring alternative locations that have the trained workforce that they need, which I think Davis is pretty well positioned for because, obviously being a major research university with a significant presence in life science, I think that would be a very good source of potential employees,” he added.
All of this is promising in terms of showing where the demand lies. Of course some are going to insist on seeing a list of companies that would move here with the space. It doesn’t really work that way.
Moroz was telling me how much work it was to get a company like Agenus to come even when there is space. That’s the nature of the market. No one is going to wait around for 10 years for a project to go through a voter approval process, get built and then open. They want something shovel ready at worst.
But I think this discussion at least illustrates the potential if Davis had shovel-ready land and a more robust economic development team to help lure top companies seeking more affordability in space, housing and proximity to a major university.
As always, the trick will be if the voters see the need.
—David M. Greenwald reporting