Sunday Commentary: Schilling Announcement Shows Critics Wrong about Economic Development in Davis

Schilling Robotics as posted on Davis Wiki

By David M. Greenwald
Executive Editor

Davis, CA – In sports, it is at times better to be lucky than good.  That’s what happened here with the announcement this week that Schilling would be staying in Davis after all.

Tim Keller of Inventopia said it best.

“I think we dodged a bullet, right?” he said.  “I mean, when Schilling was trying to move out of Davis, was considering moving to West Sac, this building wasn’t available.  So it’s like we get to retain an incredibly valuable company despite having failed to provide any alternatives.”

The opportunity happened because DMG Mori decided to unload over 70,000 square feet of space at their Davis facility—some noted that space on the market was snatched up in an instant.

The details are not finalized, but FMC Corporation would move into that space and then Dan Ramos, presumably, would build out the space in front of DMG Mori to provide the rest of the space needed for the expansion plans of FMC.

“But after that, there’s no more land, man.  We’re out,” Ramos said.

If opponents want to be concerned with traffic along Mace, that’s understandable.  I tend to believe that the traffic along that corridor is going to be a problem with or without the development of DiSC, and that with roadway improvements it could improve—whereas without them, it almost certainly will get worse.  But that’s at least subject to dispute.

The FMC move shatters a number of myths that have been spun out by the no forces.

First of all, it shows that companies really do want to stay if they can.

“I just think it reinforces the uniqueness of Davis to draw great companies that really realize the potential of the university and all that it means, said Dan Ramos, who is the project manager for DiSC 2022 and also landlord for the DMG site.

He explained, “They didn’t want to leave Davis. But they didn’t have options for them to expand. Fortunately, the building became available and were able to lock them down.”

Barry Broome of Greater Sacramento agrees as well.  There are many great companies that want to be in Davis and near the University, but Davis lacks the space to accommodate them, he told me this week.

He said, “Davis is the most attractive city in the region for novel companies. I mean, they want to be near the university and the challenge has always been, you know, Davis is a beautiful community and it appropriately raises concerns over development, but you’ve got to have a smart balance between that to make sure you don’t lose great companies.”

Broome went onto explain that Davis lacks the space to accommodate a lot of these companies.

That’s another myth that I just pointed out last week with another column.  People see all sorts of listings and say, see, there is plenty of space.  But most of it—as we showed last week—is not suitable for the type of companies we are talking about here.

Broome pointed out, “It’s also type of space.

“If you look at UC Davis, it’s a science school, it’s a science and engineering school, so in order to capture the economic advantages of a science school and an engineering school, you have to have real estate that works for science enterprises.”

He added that “all of the employers prefer to be over the Causeway now between Davis and Woodland. Davis gives people not only access to UC Davis, but you’re 60 miles from Berkeley. So that entire corridor is very attractive. And we always consider the city of Davis like the front porch of the region.”

“We got lucky with it—absolutely,” Mayor Partida said.

“There’s not a whole lot.  I know that people keep talking about all the empty spaces, but all space is not created equal.  All space doesn’t fit everything that we need.”

She noted that with specialized industries “there are things that people don’t think about.

“You can’t stick laboratories into space that doesn’t have the good air quality exchange,” she said.

Not only do you need proper HVAC and ventilation, you need water systems and proper electrical power.

As Tim Keller pointed out, a lot of landlords simply don’t want to rent their office space for labs and don’t want to invest in the money needed to upgrade their facilities.

Keller pushed back against the notion that there was plenty of space in Davis.

He explained one of the first tenants at Inventopia has been waiting for a phase two grant from NIH, which is for $2 million.  She’s developing a cardiac patch which would help with heart valve replacement.

“She has $2 million to spend to develop this thing and she needs to start right now,” he said.  “She’s looking for lab space.”

There is one lab available but it’s 12,000 square feet and they would require her to take out a five-year lease to build it out.

“Doesn’t apply to her.  It’s not a match.  The business model isn’t there,” Keller said.  “There are smaller lab spaces that are coming on the market.”  But most of those “aren’t really going to work for her either.”  He said, “There’s nothing pre-built and ready to go.”

He said, “When you have grant funding like that, that’s what you need.  You need available capacity.  That’s ready to go.  Davis just doesn’t have that.”

He later added, with respect to Schilling.  “It’s great for us, but it’s not like we earned it.  We’re just lucky that that property became available and they could move into it.”

These are the points we have been saying for a long time.  Is there a possibility that the downtown or URP (University Research Park) could redevelop some of their buildings to accommodate some of these companies?  Absolutely.  But right now the best bet is the 100 acres at DiSC that would be specifically designed to accommodate high tech and advanced manufacturing that can really help Davis with the revenue.

As Mayor Partida pointed out, “We have a lot of amenities.  We have trees that are dying.  We got roads that need to be fixed.  We have all these amenities that people stay here for and come here for and are very proud of, but we need ways to pay for them.”

At the end of the day, this is perhaps the last opportunity Davis will have to do something like this for some time.  The university has already decided to look elsewhere for a lot of their expansion plans.  That could change with the passage of DiSC and the willingness of the Davis voters to take a chance on some bigger and something better.

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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10 Comments

  1. Ron Oertel

    In reference to the title of this article, is that what it shows?

    I thought it showed that existing, unneeded office space can be converted to other uses.

    By the way, it’s no longer called “Schilling”, as it was acquired by (what is now called) “TechnipFMC” (a London-based, multi-national corporation with operational headquarters in Houston). Looks like Technip FMC went through a couple of name changes itself, as well.

    They make submersibles for the oil and gas industry. (As did Schilling, before it was acquired.) Looks like they still call their submersibles “Schilling” robotics.

    https://www.technipfmc.com/en/contact/

    https://en.wikipedia.org/wiki/TechnipFMC

    Why did the deal at the Port of West Sacramento (for a larger facility) fall-through?  (That deal was first announced years ago, at this point.) Honestly, that seems like a better location due to the industrial nature of West Sacramento, and the access to the deep-water port where this corporation had planned to locate.
     

    1. Ron Oertel

      By the way, is this a “second” location for TechnipFMC, or are they (still) moving out of their existing space?

      And if they’re moving out, what are the plans for their existing space? Based upon the information in the article, I assume that both of these locations owned by the DiSC developer. (Does he also own the site of the adjacent DMG Mori?)

      And, why did TechnipFMC determine that they didn’t need the larger (and possibly cheaper) space afforded by the proposed West Sacramento location?

  2. Matt Williams

    Barry Broome of Greater Sacramento agrees as well.  There are many great companies that want to be in Davis and near the University, but Davis lacks the space to accommodate them, he told me this week.   He said, “Davis is the most attractive city in the region for novel companies.”

    .
    The term “novel companies” has been used several times recently.  I suspect that most people do not know what the term “novel companies” means.  I personally don’t know what Barry Broome means when he uses that term. When I used Google to research the term, all I got were “book publishers.” It would be useful if the Vanguard clarified (1) what that term means, as well as (2) giving readers some example companies that fit into that category.

     

    1. Keith Y Echols

      My guess is that it means a company that is company that is out of start up stage, looking to expand but maybe not yet profitable.  To me it seems like the equivalent in venture capital terms  like a company looking for it’s Series C round of funding.

    2. Ron Oertel

      Looks like David isn’t going to answer that question.

      I’d assume that it means/includes companies which are involved in the gas and oil industry, such as this:

      In 2010, the company’s Paris-based predecessor (Technip) was fined $240 million for paying bribes to win contracts to build a liquefied-natural-gas plant in Nigeria.

      In June 2019, TechnipFMC agreed to pay around US$300 Million to resolve allegations it bribed government officials in Iraq (FMC) and Brazil, including at the country’s state-controlled oil-and-gas company Petróleo Brasileiro S.A., also known as Petrobras.[17]

      https://en.wikipedia.org/wiki/TechnipFMC

       

       

  3. Matt Williams

    “We got lucky with it—absolutely,” Mayor Partida said.  “There’s not a whole lot.  I know that people keep talking about all the empty spaces, but all space is not created equal.  All space doesn’t fit everything that we need.”

    The word that immediately came to mind when I read that quote from our Mayor was passive.  What Davis needs is a different “p” word … proactive.

    Proactive community leadership (from both the public sector and the private sector) would follow the words of Eldridge Cleaver There is no more neutrality in the world. You either have to be part of the solution, or you’re going to be part of the problem.”   We have a City government that is stuck in neutral when it comes to our vacant and/or underutilized commercial space.  There is a lot of talk about changing the local economy, but other than attempts to “hit home runs” there is no attention being paid to “hitting singles and doubles.”  Proactive leadership would be saying “if a space doesn’t fit everything that we need, what do we need to do to make it fit.”

    I have repeated many times that our City needs an Economic Development Plan that is professionally prepared and shared with the public.  The quote above by Mayor Partida is one more example of how true that need is.  Having a plan would mean we are much more likely to be part of a solution, and much less likely to be captives of a problem.

    1. David Greenwald

       I have repeated many times that our City needs an Economic Development Plan that is professionally prepared and shared with the public”

      (1) How long has it taken to get the downtown plan approved?

      (2) How does having a EDP help if we don’t have space for economic development and can’t get space approved?

      I see your call as a call for doing nothing.

      1. Matt Williams

        So David, are you saying that our city is better off with no plan to guide its efforts?

        Businesses and organizations all have a plan for where they want to go and what they want to accomplish.  The people who own shares of stock in those companies not only expect there to be a plan, but also expect the company to report its progress against that plan on a regular basis.  A company that has no plan for its future will find investors in its stock very hard to come by.

        1. David Greenwald

          I would say in response two things:

          (A) The city doesn’t have no problem. They have the dispersed innovation plan from 2012
          (B) Killing DiSC twice pretty much eliminates any further opportunity for an economic development plan

      2. Ron Oertel

        One thing you don’t do (if you’re interested in redevelopment within the city limits) is to keep expanding outward.

        That’s been proven over-and-over, in many cities.

        Ironically, your Schilling (TechnipFMC) announcement shows that redevelopment within the city can occur.

        In fact, just about every city within 30 miles or so of the coast (where the vast majority of the population lives) is not expanding outward. Including Silicon Valley itself.

        By the way, what are the plans for the space that Schilling/TechnipFMC will vacate (after they move to their new location within Davis)?

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