In yesterday’s Davis Enterprise, Mayor Don Saylor once again has a co-written op-ed, this time talking about Davis being armed with a new economic tool, the “Davis Economic Health and Prosperity Report.”
According to the piece, “The report represents the culmination of a multi-year commission effort to examine and measure some of the key factors defining economic development and community well-being, and to help policymakers and the community assess ‘how is Davis doing?’ and ‘how do we know?'”
They continue, “In selecting data to represent each indicator, consideration was given to cost, reliability and practicability for future updates to monitor change. To finalize the variable selection, the commission sought input from a steering committee reflecting a broad spectrum of expertise. The report has been written in a straightforward manner to ensure maximum community accessibility to the important data and results.”
The report (the report can be found here by scrolling down http://cityofdavis.org/meetings/business/PKT_8_23_2010.pdf) determines that Davis places third out of the nine jurisdictions analyzed. And it is here that perhaps we can start questioning the usefulness of such a study.
The report analyzes Davis as compared to regional cities such as Dixon, Fairfield, Vacaville, West Sacramento and Woodland. It also compares Davis to three college towns, Irvine, Palo Alto, and Riverside.
One might immediately ask, why not use more comparable college towns like Chico, Santa Cruz, Berkeley, San Luis Obispo or Santa Barbara?
Drilling down into the results, such as they are, one notes that the city does well with categories such as “Business Health,” “Quality of Life,” and “People.” However, looking only at economic factors, Davis is sixth, with Dixon, West Sacramento and Woodland moving ahead.
The categories the variables measure are Business Health, Business Climate, City Revenue, Quality of Life, and People.
Business health, attempting to emphasize existing business, overall ranks well, although perhaps we can question this variable. It ranks well on average commercial vacancy rates – in other words businesses not moving out of Davis or closing, as much as in other cities. I am not sure that is the best measure of business health, as it appears Davis businesses are rather limited, and yet that measure is not captured at all. A second measure is unemployment rate, which appears to be in the middle. And average salaries, in which Davis is ranked in the bottom third.
This is where things get confusing because in the write up on average salaries it says, “This variable measures the wages derived from averaging the payrolls of all commercial enterprises in each jurisdiction. While Davis significantly lags behind the two leaders on this variable, namely Palo Alto and Irvine, it is ranked 3rd and leads the other comparable jurisdictions. It should be noted that “average salaries” in different metropolitan regions also can reflect different “costs of living” that should be considered when making comparisons.”
Perhaps their point is that while average salaries being high is good for the people, it is bad for business. This is certainly a variable that is unclear.
The second variable is business climate, in which Davis ranks in the bottom third, and that is across the board in terms of commercial lease rates, construction permit revenue and cost of business.
City revenue also ranks poorly, with sales tax revenue and property tax revenue in the bottom third (not sure how the latter was captured) and transient occupancy in the middle.
Davis ranked well on Quality of Life, housing affordability actually ranked in the middle, and culture and leisure, along with schools, ranked in the top third. This is where Davis has its huge advantage over neighboring communities and Riverside. It is also why we might question Riverside as a representative college town.
Finally, “people” as compiled by education level, employment, and average household income ranks highly. Again, not sure why average household income is a plus, but average salaries is a minus in the other category.
What does this tell us? According to the report, “The index score rankings suggest that Davis is a lot like a number of its regional competitors and that it lags well behind two of the three college town comparables.”
That is one possibility. What it tells me is something quite different. When Davis is compared to its regional cities (why are we calling neighboring cities competitors?), Davis finished well behind them in terms of economic performance. Its saving grace is because it is a college town and the quality of life issues are far better.
One the other hand (and I’m not even sure the college town comparables make a lot of sense), once we look at other college towns, Davis’ quality of life advantage dissipates and Davis is dragged behind all but Riverside, which I would hardly call primarily a college town by its lack of economic base. It would be more interesting if they had chosen another town which was in the Davis size range and whose university dominated economic and social life. Riverside is a city of 300,000, not exactly a fair comparison with Davis.
Really the usefulness of this overall report comes into question because the report does not tell us much that we do not already know. Davis needs more in the way of economic development and it does well in terms of school performance, quality of life, education, low crime, etc. Davis does not do well in terms of either its existing economic climate (or at least it should be so, had they not cherry-picked the data examined in that aspect) or future economic development.
Writes the Mayor and his co-conspirators, “The Davis Economic Health and Prosperity Report is an important new tool for evaluating city economic health and developing new economic strategies for the future. Ideally, the dialogue around this first edition of the report will lead to changes in the next edition in two years that will make it even more helpful. Over time, this report will evolve to meet new city interests and needs. This report is a good place to start a discussion of how we want to approach this critical task in the future. “
They continue, “This report is a bargain. The total cost, aside from commission and staff time, was $6,500 ($1,500 in city funds for data acquisition and $5,000 from a generous private donor that was used for student stipends). Needless to say, the report has a pretty good cost/benefit ratio no matter how you measure it.”
There was very little measure of existing retail options. There was little measure of existing business start-ups. There was little measure of high tech or green businesses, either existing or future possibilities.
The good news is that the report does not cost much, but the bad news is questioning whether it really gives us new information.
It seems that the city choice and the weighting of the factors was designed to give Davis a favorable impression. Whereas, when broken down, things become far more clear. Davis is a city where people earn high salaries because they are either university or state employees. Davis is not affordable to people who make even modest incomes, so that helps keep the quality of life high. But it is not as bad as some other cities in terms of housing costs.
The report is ostensibly about analyzing the way to improve business and health and climate.
It asks a series of questions as captured in the graphic below (click to expand size).
One remarkable absence in the report, however, is no mention of green technology other than a bit of mention in one of the appendices of bio tech, high tech, and clean tech in the appendix on UC Davis start ups since 2003.
The report did mention for instance, “The good news is UCD start-ups are almost all in fields that reflect the knowledge-based businesses that Davis wants to attract (e.g., bio tech, clean tech). The bad news is that only slightly more than one-quarter of those created in the past six years have chosen to locate in Davis.”
But the area of green technology, or what they are calling clean tech, should be a huge emphasis for any future economic model. It is certainly what the city is focusing on.
Instead the report focuses heavily on more traditional or old economics – retail, restaurants, transportation, construction, business-to-business, and government.
Overall, an analysis of the Davis business and economic climate was a good idea. The application of it leads us to question at least some of its usefulness.
The bottom line is that the city is probably not doing as well as its neighboring cities or other college towns in terms of economic development. The strength of the city remains its high quality of life, education level, and the relatively low crime that we enjoy.
—David M. Greenwald reporting
Maybe their Social Scientists too !
Sacramento Bee has article today re: El Dorado County’s imposition of an employee contract… doubles employee contributions for retirement, medical (regular & retiree), and sets up a two tier system for retirement for PS & others. Questions: most private employers cover only employee on medical – spouse/significant other/children are employee’s responsibility… should we go with that model? Should we make “full retirement” @ age 67 or higher, as SS does, for government employees?
DPD
Is there an action plan or similar from the report. What if anything will be done with it to improve our ‘lagging’ categories?
Agree those cities not best comparisons. AND comparisons are fine but we need to break the comparing neighboring towns as our knee jerk methodology and rather look at our own longitudinal data. Comparing and matching is one of the reasons we are in the salary, retirement mess we are in.
dmg: “But the area of green technology or what they are calling clean tech should be a huge emphasis for any future economic model. It is certain what the city is focusing on.
Instead the report focus heavily on more traditional or old economics – retail, restaurants, transportation, construction, business-to-business, and government.”
Why not both – green tech and traditional/old economics? We need the tax revenue…
SODA: They did some Davis only work too, I mean it’s a report of over 100 pages, I focused on a few points.
Elaine: Both is fine, I tried to hit on the omission. I don’t see retail as a growth industry for the city though, do you?
DPDASPS
‘Davis only work’? You mean comparing us to ourselves over time, longitudinally? Was that more meaningful?
dmg: “Elaine: Both is fine, I tried to hit on the omission. I don’t see retail as a growth industry for the city though, do you?”
Why not retail?
[quote]Why not retail? [/quote]
I didn’t say not retail. But looking at the numbers, I don’t see us producing much more in the way of sales tax.
I do agree with Saylor on one thing–$6500 is cheap for this type of report especially since it appears a donor paid for most of it. However, like many on this blog I’m skeptical of the way Saylor and co will interpret the data. Also it appears that the City got what it paid for–a report that sheds little light on the issues we face.
And as far as sales tax dollars go, please file the study’s conclusions under “DUH!” We have not pursied big box stores (except Target) and its not clear that is even a viable strategy given our size and location even if Davis citizens wanted to go that route.
The real questions facing Davis:
1. How do we maintain our downtown? Many businesses are closing (but its worse in Roseville and Woodland which over expanded in the boom). What if Borders goes bankrupt?
2. How do we encourage Ag and green-tech industries to come to Davis? I am in favor of some growth but the kind of growth that makes sense for Davis, not more development that will enrich Mr. Saylor’s campaign. UC Davis is one of the premier Ag schools on the planet and Agriculture is doing very well in this downturn and will continue to do so in my opinion. Why aren’t we looking at Ag biotech ? Or green energy? I am afraid Saylor’s economic model is both outmoded and not in synch with Davis.
If this report engenders a healthy debate that’s great. If, as I fear, its just an excuse to do what Saylor has tried before and failed to achieve, then its a lost opportunity.
Who was the “generous private donor”? Did he/she have a stake in the outcome of the report?
Just asking.
It is an interesting report, and the statistics will be of some use. It is unfortunate that retail business owners weren’t represented on the committee. Some of the questions and policy issues skew towards promoting development.
Bob Agee, Chair of Business & Economic Development Commission
• Jim Smith, Business & Economic Development Commission
• Michael Faust, Business & Economic Development Commission
• Martin Kenney, UC Davis, Department of Community & Regional Development
• Anthony Costello, Former Chair of Business & Economic Development Commission
• Paul Navazio, Finance Director City of Davis
• Don Palm, Dean, Sacramento City College, Davis Outreach Center
• Karl Mohr, UC Davis, Administrative and Resource Management
• Bill Alger, President, Chamber of Commerce, Woodland Health Care
• Ryan Sharp, Director, Center for Strategic Economic Research
• Chuck Roe, Pyramid Construction, Davis Downtown Business Association
• James Morante, Corporate Affairs Manager, PG&E
• Jim Gray, Partner, CTBT
• John Whitcomb, Tandem Properties
• Lynn Yackzan, Yackzan Group
• Debbie Davis, Editor, Davis Enterprise
• Juelie Roggli, Facilities & Administrative Manager, Novozymes
• Dave Taormino, Brix and Mortar Partners
• Jonathan London, UC Davis, Department of Community & Regional Development
• Ruth Asmundson, Mayor, City of Davis 2008-2010
• Don Saylor, Mayor, City of Davis
ERM: “Why not retail?”
Retail is overbuilt all along the I-80 corridor. The vacancy rates in current retail sites are very high and lease rates are dropping to unprofitable levels. I just counted 15 storefront vacancies in the Nut Tree shopping center in Vacaville, and they’ve had difficulty filling that project from the start — and that site is very visible from the freeway, unlike anything that might be built near Davis. Retail is essentially saturated in the whole region, so the only possibility would be to try to steal some retail sales from another city nearby. It is unlikely that a developer would invest in any kind of retail development in the current market or in the foreseeable future.
Don Shor is correct and one could also add that Woodland is struggling. Roseville has a very high vacancy rate. I realize we are quite far away from Roseville but its indicative of the problem:
1. Retail developers over expanded during the boom years.
2. Consumers are cutting back on retail spending as MEWs (mortgage equity withdrawals) fall, unemployment stays high and people are afraid of what is next.
3. On top of that online retailers are doing well; they still account for a small portion of sales (though I would be willing to bet a much higher share in Davis) but their share is growing.
The City of Davis should be concerned with filling vacancies, e.g., the strip mall next to the Coop at 8th and G is not doing well. It has many vacancies. I was in Radio Shack (or “The Shack” as they are trying to brand themselves) on a recent Saturday and they were empty.
It would be useful to know how many businesses in Davis are struggling. This is tricky since retail owners don’t always want to let others know but I sense a lot of local businesses are struggling here as elsewhere.
Retail in the central Valley is imploding.
Check out consent calendar “Item K” : http://cityofdavis.org/meetings/councilpackets/20100907/04K Chamber of Commerce DSIDE Workshop.pdf
Dan Saylor is asking the City to help pay for a “Chamber of Commerce workshop” which will create a comprehensive economic development plan FOR THE CITY OF DAVIS. The “workshop” is to be help at UCD, not in the City. I assume it won’t be televised.
Please read this item. The goal of the workshop is not merely a discussion, it is an “action” workshop that will “Articulate a community vision for Davis’ future economy.” It will “Create a timeline for specific actions to be taken by the City, the business community, and other partners.” “The Steering Committee is comprised of representatives of UC Davis, the City, and a broad base of business interests.”
“The Steering Committee will guide the strategy through formal City Council consideration and its implementation.”
“Total budget for the workshop is estimated at $5,000. The University of California, Davis, has generously agreed to provide the Conference and Visitors Center as a location for the workshop.We are requesting business owners to give us one of their workdays to make the workshop a success.”
Why isn’t the City holding a workshop to chart the course of our economic development, which will most assuredly involve major land use decision. Why doesn’t this process start with the council as a whole with citizen input? Why spend additional money on it? Why hold it on Campus instead of in the City?
Whatever happened to our Davis citizen-based planning?
Check out consent calendar “Item K”
Dan Saylor is asking the City to help pay for a “Chamber of Commerce workshop” which will create a comprehensive economic development plan FOR THE CITY OF DAVIS. The “workshop” is to be help at UCD, not in the City. I assume it won’t be televised.
Please read this item. [quote]The goal of the workshop is not merely a discussion, it is an “action” workshop that will “Articulate a community vision for Davis’ future economy.” It will “Create a timeline for specific actions to be taken by the City, the business community, and other partners.” “The Steering Committee is comprised of representatives of UC Davis, the City, and a broad base of business interests.”
“The Steering Committee will guide the strategy through formal City Council consideration and its implementation.”
“Total budget for the workshop is estimated at $5,000″. The University of California, Davis, has generously agreed to provide the Conference and Visitors Center as a location for the workshop. We are requesting business owners to give us one of their workdays to make the workshop a success.”[/quote]
Why isn’t the City holding a workshop to chart the course of our economic development, which will most assuredly involve major land use decision. Why doesn’t this process start with the council as a whole with citizen input? Why spend additional money on it? Why hold it on Campus instead of in the City?
Whatever happened to our Davis citizen-based planning?
I don’t have any problem with the Chamber sponsoring a business discussion, nor with it being hosted on campus, but I don’t think the city should be paying for it. The structure of this event inherently skews the results.
It is almost certain that the business interests represented will be those who can manage to take a week day off (on short notice, I would add), thus precluding nearly any small retail business owners from attending. So again, the focus will be on development. This is a very old school way of doing things: conference, keynote speaker, day-long meetings. That automatically excludes people who run shops and causes disproportionate input from large business and property owners, developers, and commercial interests.
There are relatively few retail members in the Davis Chamber of Commerce. Neither the process leading up to this, nor the format proposed, is likely to lead to significant retail participation. Nothing that comes out of this should be construed as reflecting the broad views of the Davis business community.
What concerns me is the apparent assumption that this conference would lay forth the action items that council would be presented with. I also don’t see why the city should pay for it.
Lest anyone doubt my assertion about retail membership in the Davis Chamber of Commerce, here is the total list of retail members from their directory:
[url]http://www.davischamber.com/memberlist/search-cat/58[/url]
Don, do you really think that these small retailers will be the ones taking a leadership role in creating the city’s plans? Small retailers rarely have the time, and they would never be chosen to make up a majority of the commercial interests represented on any “Task Force”.
Question for Don and Sue – who would be the right party to pay for this planning event? If business owners or, God forbid, developers, pay for this, then they would be charged with having an “agenda”. The city of Davis seems to be the right group.
Business owners and leaders, or those who would like to develop businesses in Davis would seem to be the right group to lead a planning meeting whose specific intent is to further the economic interests of Davis. Having this city council create an economic development would create plan watered down by commentary from every stakeholder in Davis, take years to happen and cost tens of thousands of dollars. I believe having a group like this develop a plan for the Chamber to follow and the City Council to consider is exactly the right course, if we want to make progress.
Adam Smith: I do not agree, but I will comment further after tomorrow’s meeting if David writes about it.
[i]Question for Don and Sue – who would be the right party to pay for this planning event?[/i]
The participants. Or the Chamber of Commerce.
[i] If business owners or, God forbid, developers, pay for this, then they would be charged with having an “agenda”. [/i]
I urge you to read the bullet points of “Further Analysis” and tell me there is not already an agenda.
Examples:
“What can Davis do to increase the likelihood that the space inventory reflects the types of businesses it wants to attract?”
“What is the distribution of sales tax receipts across business categories that balance Davis’ willingness to accept risk with the need to generate revenue?”
I find those questions a bit loaded.
[i]Business owners and leaders, or those who would like to develop businesses in Davis would seem to be the right group to lead a planning meeting whose specific intent is to further the economic interests of Davis. [/i]
Other than development interests, business owners, as I said above, are barely represented in the steering committee that has planned this event.
The statement in the council agenda packet – “The Steering Committee is comprised of representatives of UC Davis, the City, and a broad base of business interests….” – is simply untrue. Look at the makeup of the Steering Committee.
[i]Having this city council create an economic development would create plan watered down by commentary from every stakeholder in Davis…[/i]
I happen to think that environmental groups and retail business owners should have a place in these discussions if they are being funded by the taxpayers.
[i] I believe having a group like this develop a plan for the Chamber to follow and the City Council to consider is exactly the right course, if we want to make progress.[/i]
Certainly. No problem. Just pay for it with private funds.
The city doesn’t have $5000 to spend on this. It doesn’t have $20000 to spend on Zip Cars. The City of Davis is broke. I can only imagine what it does to morale among city employees when they see staff being reduced and department budgets being cut, maintenance being deferred, and their job loads increasing (city staff can drive the Zip Cars in for their routine maintenance?!) – and then somehow there is money to pay for expenses so business leaders and university officials can get together to discuss economic development.
There isn’t going to BE any economic development any time soon: not retail, not housing, not commercial. So this is all talk, and an unnecessary [i]public[/i] expense at this time.
Please, city council, could you give us [b]just one sign[/b] that you recognize the gravity of the city’s current fiscal condition, and stop approving one pet project after another?
Don Shor,
On the Zipcar contract: It didn’t make it into the Enterprise, but I moved for reconsideration of the decision but failed to gather the requisite number of votes.
Not to be too cynical but this sounds like an ideal campaign opportunity for Saylor though it won’t be billed as such. He will be able to meet and greet folks who can benefit him in the future and make the appropriate promises.
The real economic development problem we face is the same one most cities face–
How to cope with the downturn.
How to cope with higher vacancy rates for commercial retail.
Fortunately Davis has rejected Saylornomics and is in better shape than many/most other central valley cities but we are not immune from what is turning out to be (and will continue to be in my opinion) a protracted downturn.
There probably is a role for the City here though given the leadership we have had lately I’m not sure I trust them. I’m still bothered by the use of RDA money for a new Hanlees dealership which is on the outskirts of town at a location which was underused but not vacant–those are funds we will not have to use elsewhere.
It would be interesting to see if any of this makes the agenda for this conference. I hope so.
Dr. Wu: “There probably is a role for the City here though given the leadership we have had lately I’m not sure I trust them. I’m still bothered by the use of RDA money for a new Hanlees dealership which is on the outskirts of town at a location which was underused but not vacant–those are funds we will not have to use elsewhere.”
Where else would you want the RDA money to be used, such that it would generate tax revenue?
Don Shor: “Please, city council, could you give us just one sign that you recognize the gravity of the city’s current fiscal condition, and stop approving one pet project after another?”
Amen.
pnieberg: “Who was the “generous private donor”? Did he/she have a stake in the outcome of the report?”
Good question. I assumed this conference was more about encouraging UCD start-ups to locate in Davis, since UCD was holding the conference on campus and is so heavily represented at the conference. Did I miss something here?
What you missed is that this appears to be a Davis Chamber of Commerce rather than a University event, and that, according to the agenda item, is expected to design our CITY economic development plan.
Don – I agree that the roster is heavy to real estate sorts, and we should add some high tech, green tech, financial, retail sorts to the mix. However, real estate developers, by nature of their business, tend to be pretty in touch with the issues that most concern folks who are looking to expand or start businesses. Therefore, the nature of the task lends itself to a heavy dose of their input. I’m not sure about the environmentalists – they tend to be anti business development, and while they should have a voice in this at some point, if the naysayers are too vocal and too numerous at early stages, you never get any proposal out of the committee.
Sue – I disagree that this is best done by the city council and staff. Too political, too many interests attempted to be served at any one time. Better to have the council review a plan, provide feedback and ultimate approval.
As to Don’s point regarding city staff morale, that is pretty far down my list of concerns. If we don’t get some increasing revenues and economic growth, their morale will be much lower in the coming years than if they see 5K being spent to foster an economic growth plan. Zip Car – now that is a waste of money. Economic growth plans are potentially much more significant for the city.
David –
I have an off topic, but important question. What tracking devices and software do you deploy on your site? I recently added software which blocks cookies and tracking type software, and notice that it is blocking 3 programs on your site – the tracking programs show up as Comstock Beacon, Google analytics and Statcounter