Sunday Commentary: Davis Gets Serious Again about Economic Development – But Is It Enough?

By David M. Greenwald
Executive Editor

Davis, CA – For those of us who believe that the city of Davis desperately needs direction and energy on economic development, the announcement that the city had hired Katie Yancey as Economic Development Director can only be viewed as a positive.

It has been a decade now since the wave of energy from 2010 to 2014 faded into a morass of failed projects and unmet dreams.

The position has been vacant for some time.  This is the first step towards moving forward a new Economic Development Strategic Plan.

In the February 20 staff report on the General Plan, the city wrote, “As the City is in the process of hiring an Economic Development Director, it will be critical to identify to what extent the General Plan update will incorporate Economic Development as a key subject area vs. looking to the creation of a separate Economic Development Strategic Plan.”

City Manager Mike Webb reiterated that with part of his quote: “One of the first key endeavors of the Economic Development Director will be to work with the community and City Council to create an economic development strategic plan to guide our efforts in Davis with a clear vision.”

That is much needed.  And, frankly, the city probably did better with this hire than they could have hoped for.

Katie Yancey has more than 18 years of experience with the City of West Sacramento in its Redevelopment and Economic Development and Housing Departments.

If the name is familiar, she is the wife of Matt Yancey, the former director of the Davis Chamber about a decade ago, who came over from the Sac Metro Chamber and had a background in economic development.

This move hearkens back to the days early last decade when the city was aggressively moving forward on Economic Development in the wake of the work by DSIDE, Studio 30 and Innovation Park Task Force.

That energy resulted in proposals for Innovation Centers—that, one by one, fell by the wayside.

At the same time, however, one has to wonder if this move is enough to move the city forward.

In their announcement, the city talked about the need to “build economic diversity, jobs and revenue consistent with the City’s goals and community values.”

While I think that means economic development within a framework of responsible land use and adherence to climate resiliency, the point made by a commenter cannot be ignored.

They wrote, “Perhaps the largest part of the problems that Davis has encountered over the past decade is a total absence of ‘shared purpose’ between the constituents themselves, as well as between the local government and the constituents.”

What we have seen is that there are competing currents within the political framework of the community that have combined to create a sort of political stalemate.

On the one hand, there is the relatively moderate group of people who end up getting elected to city council.  They have generally supported the modest housing and economic development projects that have come forward.

On the other hand, there is a resilient group of naysayers who have opposed a sizable portion of the proposed projects.  At this point, they are not strong enough to get elected to political office (or even come particularly close) but they are strong enough to block projects when they get to the ballot box.

The result has been a string of failed projects over the last 25 years in Davis.  All three projects with R&D components over the last 10 years have gone down to defeat.

It has also impacted the housing side.  Twice the state rejected the city’s Housing Element before finally approving it earlier this year.

But the inability to pass peripheral projects and even plan peripheral projects in the Housing Element is going to impact not only the future of housing, but also economic development.

In order to meet the state requirements on housing needs, the city council was forced to approve rezoning from commercial to housing within the city limits.

The supply of vacant parcels in Davis is coming to an end.  That is going to force change to occur and, if the city does not step up, the state will.

But in the meantime, it makes the job of economic development even more difficult.  New business relies on space and, while there is some available space, that space is dwindling as well.

Can a new economic development director change the narrative?  Clearly it is going to take more than a staff level person to do this.  There needs to be leadership from the elected members of the city council.

The city took an important step with this hire, but it’s not enough to change the momentum on economic development—we need a community-based conversation about the threat the city’s prosperity faces.  And, even then, I can’t say I’m that optimistic.

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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11 Comments

  1. Tim Keller

    I am personally excited that this position has been filled.

    Post the failure of measure H I approached the city directly to try to work on “what is next” for economic development, and the feedback I got from the city manager and two council members was “we are about to hire a new economic development director.. lets fill that position first”

    That was almost two years ago.   So im quite relieved that the recruitment process was successful this time.   We have a lot of work to do.

    Job one is to realize that econmoic development isn’t synonymous with “building an innovation park”.  And it was a mistake for the pursuit of an innovation center to be the epicenter of our economic development strategy.   I wrote three articles here in the vanguard after measure H disecting that.  The final article in that series is here.

    A few months later I also wrote a more forward-looking piece about what we SHOULD be doing instead, and I think it bears re-reading now that we have city staff on board to start getting our economic development pathway on-track.  That article is here.

    There are a couple of  elements of that later article where the ideas have already evolved further, but the core sentiment is the same:   A economic development strategy for a city like Davis where we have a major research institution needs to be focused on retention and nursing of young startups… not attraction of large established companies from out of town.

    You simply do very different things when you are focused on home-grown companies instead of attracting companies from elsewhere.   “Business incubators” are what you build for the former, “innovation parks” are what you build for the latter…  We only need to worry about the big innovation park once we have a pipeline of homegrown companies to fill it… and we aren’t there… yet.

    We have a lot of foundation to be laying, and I agree that there needs to be much better “shared purpose” amongst the constituencies in town with regard to what we are doing with economic development,   That vision needs to be strategic, it needs to be aligned with our core strengths and opportunities, it needs to be sustainable, and it needs to be realistic.  A re-evaluation of our assumptions about retail sector should be on the table, and of course, housing for our workforce (which is already a crisis) needs to be something we actively address.

      1. Tim Keller

        The idea of focusing on food is a good fit for the strategic strengths of the city.   At inventopia more than half of the startups are food-based in some way, and the really large successful companies that have come up in Davis are mostly in the crop science / crop protection space specifically.

        That said, only a small fraction of those startups might have products that are “consumable” in a downtown type context, or something that might appeal to food tourism.    We have a great inventopia company called California Cultured that is making cell cultured chocolate, and another one called optimized foods that has successfully grown real caviar “outside the fish” and another one that is more mature called Oobli that makes an interesting sweetener that changes your tastebuds momentarily so that sour things taste sweet instead..  There are a lot of “ingredients” companies, fewer “product” companies, but I could definitely see a test kitchen downtown with lab and office space above it!

        But for the other companies, the ones doing things like crop protection, fungal sensing, nematode prevention, etc… those are much less amendable to being shown off downtown.   There are other things we can do for them, such as creating greenhouse space and creating a research farm on some of the city-owned farmland around us.

  2. Matt Williams

    Like Tim I am excited by this step in the right direction.

    With that said, I find the following comment by Davis in the article to be rather strange

    At the same time, however, one has to wonder if this move is enough to move the city forward.

    .

    David, what more are/were you looking for?

    1. David Greenwald

      I wasn’t looking for more with respect to this particular move. But as you pointed out the other day, there does seem to be a stalemate (though you didn’t use that term). That’s what I was referring to.

  3. Don Shor

    “…. we need a community-based conversation about the threat the city’s prosperity faces…”

    No. She should just do her job and not worry about any “community conversation” or trying to find “shared purpose” between factions who will never agree on that.

    Nor should the city council spend any time on changing “the narrative.” There’s nothing to change.

    Get real, folks. The voters of Davis have heard it all and have voted decisively against any peripheral business park. You’re arguing for more talking. We don’t need that. The council can direct the city manager as to what this new employee should focus on. Those who don’t like it can run for council if they want to change it. I assume you’re not proposing another peripheral project go to the ballot, are you?

    Take a look at what the City of Vacaville does with respect to economic development. This is with regard to biotechnology, which is probably the best fit for Davis. The council can decide which, if any, of these types of incentives could be offered locally. More to the point, she brings her experience working in West Sac and can perhaps make a tailored proposal that might be effective in the much more constrained development environment here in Davis.

    https://www.cityofvacaville.gov/government/economic-development/target-industry-sectors/biotechnology-incentives

    Local Incentives

    Capital Incentive Investment Program

    Recent state legislation allows for cities and counties in California to offer Capital Investment Incentive Programs (CIIP) to small and mid-size manufacturers and specified production facilities. ….

    Fee Deferral Program

    The City of Vacaville offers a fee deferral program for multi-family and non-residential projects for up to six months after a building permit has been issued. Additionally, the Sewer Impact Fee can be divided in to twelve monthly payments instead of one lump sum payment.

    Expedited Permit Process

    Request expedited plan review, and receive plan check comments within days. Concurrent processing of certain development permits can occur prior to the approval of planning entitlements.

    Small Business Assistance Program

    City staff to provide technical, site selection and permitting process.

    Revenue Sharing Agreements

    The City of Vacaville can redirect a portion of local sales taxes collected from the consumers on e-commerce purchases to major companies that have distribution warehouse centers or headquarters in their boundaries. ….

    Tax Abatements and Rebates

    Manufacturing and R&D Partial Sales and Use Tax Exemption

    All manufacturers and businesses primarily engaged in R&D related to the physical sciences, engineering, and life sciences industries are eligible for a partial exemption in state sales and use tax (3.9375%). The partial exemption only applies to the state’s portion of the sales tax rate (7.25%) – businesses are still subject to local sales tax.

    ….

    CAEATFA Sales and Use Tax Exclusion

    The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) provides a full exclusion of the state’s 7.25% sales and use tax, as well as any  additional local jurisdictional tax, for manufacturers of alternative energy sources, advanced transportation products components or systems, and projects using recycled feedstock. ….

    Sales Tax Rebate

    Local jurisdictions in California are empowered to rebate up to 30% of the local portion of the state Sales and Use Tax (typically one percentage point) for businesses who goods or services are subject to sales tax and where the point of sale is within the local jurisdiction.

    1. Richard McCann

       The council can direct the city manager as to what this new employee should focus on.

      Citizen input to council members does not end with their being elected. They are to represent the voices of constituents. So speaking up both in public and individually to council members is intended to be persuasive for council decisions. So independent processes for developing a shared vision should be fruitful–if we believe that is not the case, then democracy is dead.

      I agree with Tim that the peripheral business parks are unlikely to a good solution, but they can be part of the package. The fact is that DISC I came within a 1,300 votes (4%) of winning in an election where the most important constituents–students–were out of town due to Covid. Why DISC II lost became obvious when Dan Carson was trounced 2 years later. A different flavor of business park with a more committed vision and an acknowledgement that sustainability conditions are a requirement, not an option, could probably be approved, if Measure J/R/D survives in its current form.

      I posted above an alternative vision that would require proactive pursuit by the City rather than passive wishes which seems to be the approach to date. We can hope this will change.

      1. David Greenwald

        The basic fact is that we need space – however we want to describe that space and however we want to configure it. We just don’t have space in town at this point. We can do something that are smaller and more dense if that soothes people, but at the end of the day we need space.

  4. Tim Keller

    All of the things that Don listed from Vacaville’s plan are elements of a city that is attempting to recruit businesses from outside.  And it is working for them, they landed Genentech, they landed another Pharma company recently.

    But what does Vacaville have that davis doesnt?  A HUGE area of commercially zones land with streets alredy paved and empty lots just waiting for a pharma company or similar to come and build a factory.  When that happens, its an absolute goldmine for the city.

    Davis doesn’t have already entitles land like that, so an economic development plan that attempts to lure companies here from outside also makes no sense if we don’t have space for them.

    This is a disconnect that occurred during the DiSC campaign as well.  People criticised it because the developers didn’t have a list of people to fill it already…. but filling places like that a) takes a long time and b) is a chicken and egg problem… NO company is going to make plans to move someplace if the fickle voters of Davis are part of the approvals loop.  NONE.   It just doesnt work that way.

    So more space, is needed.  At some point, no matter what.    Whether it is on the periphery or some miracle happens and PG&E decides to sell their corporate yard…   doesnt matter, some space is needed somewhere in every scenario at SOME point.

    My argument is that it doesnnt have to be NOW… because WE dont have to recruit companies from the outside.. they START here, and we can do quite a bit to start filling the pipeline for our future economy NOW through projects that are infill.

    As just a reference metric, most researh universities that have billion-dollar research budgets also have off-campus innovation / tech transfer type incubator facilities on the order of 100,000 to 200,000 square feet… and plenty of programs to help develop workforce and executive talent.

    Davis only has inventopia.. currently 6,000 square feet and NO programming..

    There is a LOT to do before we need to worry about an innovation park again.   Commercial space HAS to be part of the plan, but it shouldn’t be on the front burner at this point.

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