Double Agent Plays Strong Role in Driving Process Away From Alternative Locations
By a 3-2 vote, the Davis City Council approved a motion that would authorize the city staff to develop a conditional use permit that would allow for the construction and move of Davis Diamond Gymnastics to a location on the Davis Auto-Center.
The eventual vote itself reflected a unique split where the three councilmembers who faced re-election voted to support the conditional use permit rather than risk the anger of a large audience of children and their parents. And while there was the general motive of saving the facility and keeping it in Davis, information perhaps was manipulated by one agent – who was both an agent for Davis Diamonds as well as for the parcel involved.
Councilmember Stephen Souza made the original motion to direct staff to come back with conditions and findings for a Conditional Use Permit. That motion was seconded by Councilmember Dan Wolk.
As Mr. Souza correctly pointed out, the city council could not make the final decision on Tuesday night, but instead had to authorize the city to come back with conditions and findings. That leaves open some room for maneuvering.
Councilmember Wolk, with two small children of his own, has consistently prioritized programs that affect children. “With a daughter who does gymnastics and a wife who did it for many years, I have to say that gymnastics is of particular importance to me.”
Councilmember Wolk said that while he understood the importance of auto sales for the city’s revenue, at the same time, he noted that this spot and adjacent parcels had been vacant for a number of years.
“I think Davis Diamonds’ partnership with the MarkeTech Group presents a really good opportunity for Davis Diamonds and for MarkeTech to build what I think is a really good opportunity” to build an innovation hub, he said and added, “I think they’re really authentic when they talk about how they tried to find alternative sites; even staff said it was very difficult to find sites that they could potentially utilize and they’ve obviously found this.”
Councilmember Stephen Souza told city staff, “Staff, you’ve done a wonderful job. You’ve done exactly what you’re supposed to be doing – you provided us with the necessary information for us to debate and figure out what is in the best interest of the community as a whole.”
“You looked at the land uses and you followed exactly the pattern in the guidance that you’ve given us,” he continued, “You’re doing your jobs appropriately and I thank you for that. I just disagree.”
Mr. Souza would go on to argue that the model laid forward in an auto-mall model is not the model of the future and that Davis needs to diversify its revenue portfolio.
Mayor Pro Tem Rochelle Swanson said that, while she is a huge supporter of Davis Diamonds and what they bring to this community, however, she cannot support a conditional use permit “sight unseen.” She argued that we need to know what we are getting into and we do not approve projects that did not hit design review.
She noted how tight the city budget is by pointing out the need for a public-private partnership to save the community pool. “What I don’t want to see,” she said, “is out of hand let go of what is not ghost revenue.” She noted that staff has been talking to some prospective auto dealerships and that there is an offer on the table.
She believed that there was a win-win solution, but that the conditional use permit did not get us there.
“This is about long term fiscal stability and if we have an option to get to a win-win and preserve and increase revenue,” she said, “I want staff to talk about potential partnership with Davis Diamonds.”
“I want to see time for that to be discussed rather than just taking a gamble on this particular situation,” she said. “We can’t plan by exceptions.”
As a substitute motion, Mayor Pro Tem Swanson put forward a motion to direct the staff to work with the applicant to see if there was a way forward. The key question was whether the applicant was willing or whether they simply wanted the city to go forward.
Christian Renaudin, owner of the MarkeTech Group told the council, “We have tried many times and we have even been billed for staff time during these meetings… So what kind of partnership is it when we sit down at the table to try to find a solution and we’ve been very eager for months to do that… but we receive a bill for the staff time.”
Mayor Joe Krovoza very pointedly asked Mr. Renaudin if he understood that the rules of the appeal are that the applicant pays for the staff time.
As the night went on it became more and more clear, that Mr. Santana, who represented not only Davis Diamonds but also the owner of the parcel, was in fact playing both sides of this issue and accruing great personal advantage from doing so.
The bottom line for Mr. Santana was that they were not willing to go back and discuss more with the city staff. They wanted an up or down vote on the appeal this evening.
Mayor Krovoza put the question to the Davis Diamond folks, who felt that they were being taken advantage of in their current situation, and that the owner of the DISC was not willing to drop his price and is essentially willing to sit on a vacant building rather than lower the asking price.
“I feel that you are putting us in a difficult position,” one of the owners of Davis Diamonds said, “We feel that we have gone out of our way to be open…. I think you need to give us a chance, the partners together and talk about it. This was kind of just thrown in our face. We need to take some time to talk to our broker, our partners before we come up with that answer.”
They feel that DISC is not a possible option for them as an alternative site.
They did suggest they could take five minutes and try to get together on something.
After their caucus, they indicated the willingness to work with the city. “We’re definitely very interested in pursuing that and we’ll do it diligently,” one of the owners said. “On the other issue as to whether we are willing to delay the conditional use permit, we respectfully decline.”
City Attorney Harriet Steiner, however, indicated that the council could with three votes continue the item to a date certain and it would not need the consent of the applicants.
Councilmember Sue Greenwald told the public that she was awake all night worrying about this, and called it “one of the difficult decisions I’ve had to deal with.”
“My whole twelve years on the council, my goals have always been to put the community first, put the neighborhoods first, the citizens needs first, above fiscally-driven planning,” she said.
“One of the problems that we face as a city is that really nothing brings us any net revenue except auto malls, auto dealerships, and hotels,” she continued. “We’re in terrible financial shape.”
She said she hates this kind of planning and “yet the legislature has given us no other choice.” She added, “We don’t get any revenue for zoning for businesses that create new jobs. None. They probably cost more in service than they bring in.”
Mayor Krovoza was pointed, “It actually bothers me that the choice here is between sending a great institution like Davis Diamonds out into the auto mall areas in a dilapidated building because it’s cheap, and putting [it] on the edge of town.”
“I’m bothered that we’re going through this choice where we’re choosing Davis Diamonds or auto malls,” he continued. “Because I think that’s a false choice.”
He argued that so long as this deal is before Davis Diamonds, that blocks us from getting to a better solution for the community, which is a more central facility.
The mayor then made a crucial fundamental point, which is that the zoning of this land is actually what makes it affordable.
“There is a real fairness issue here, and that is that the reason that this land is affordable is because it’s zoned the way it’s zoned,” he said. “If we took this zoning off of this land, there would be many other people that would love to put a commercial office space down there because now cheap land would be available.”
So, he argues this deal is therefore fundamentally unfair.
He said, “I can’t listen to the people who are directly involved in this deal advise us that there’s no future for auto sales in Davis. And if we don’t generate revenue off auto sales, everyone in this room has to ask themselves what we’re going to generate revenue for this community from.”
He argued that another option might be big box and he suggested that this is one of the tough decisions that this council had made over the years.
It is city-based recreation that is what falls off our budget when revenue drops. “We didn’t have $100,000 and the community pool is now closed,” the mayor pointed out. “We have 1700 swimmers in this community that have one less pool because we didn’t have $100,000. If we make this recreational choice, there may be another recreational choice that falls off the budget. That’s part of the decisions that this council is having to make.”
However, the substitute motion would fail, with only the mayor and mayor pro tem supporting it.
Councilmember Greenwald went against her fiscally conservative tendencies on this issue and stated, “I hope I’m not making a huge mistake for the city at large. I’m going to vote for it because it’s such a popular and important institution, as a one-time exception and hope that the auto mall can thrive.”
“I hope people understand we need your support on supplementary taxes. We don’t have the revenue to run this city,” she said.
While I initially supported the concept of keeping Davis Diamonds in town, after watching both how the vote went down, and how Davis Diamonds was really put into a no-win situation by huge monied interests in the community, the deal looked worse and worse.
The worst part of this deal is that Xavier Santana, who played both sides of this deal, really drove a lot of this process and he stood to make a financial windfall off this. Some sources estimate he may make as much as a quarter million off this deal alone.
If the city is trying to engage Davis Diamonds about looking into multiple options around town – which they did at this council meeting as well as before – and the person who is representing them in real estate (Mr. Santana) is also representing the seller in this case, Gene Simon, then Mr. Santana has a conflict of interest in this process.
He does not have the incentive to look at other options.
Now the Diamond people claim that the owner of DISC was completely unreasonable and maybe that is true. Maybe DISC is not the option for Davis Diamonds. But I at least have to wonder how much of that process is being driven by the interests of their own broker, and whether or not they are even getting an honest read on the situation.
Frankly, I am not sure how this arrangement is even legal where Mr. Santana represents both Davis Diamonds and Mr. Simon.
I fully support Davis Diamonds. In fact, I initially agreed with the conditional use permit. However, as I watched the night unfold, I think Mayor Krovoza and Mayor Pro Tem Rochelle Swanson were correct that this is not how the planning process should be unfolding in a community that attempts to plan well.
It was very telling on Tuesday night that the first people to speak at the meeting in public comment were those with the financial interests, and then the young people spoke next giving them cover – and cover for Mr. Santana who was an agent representing both sides of the deal.
Playing a huge role in this is the fact that Davis Diamonds is so popular in the community, it is obviously an election year, and I think some of the councilmembers who normally would be giving the city’s finances much stronger consideration tilted toward other considerations.
But I want to emphasize this point again – the real problem that went down here is that we really do not know to what extent Mr. Santana poisoned any alternative location discussions due to his own financial interests. Here is a clear-cut case where problems with the process undercut my confidence in a decision where I agreed with the ultimate outcome.
—David M. Greenwald reporting
“She noted that staff has been talking to some prospective auto dealerships and that there is an offer on the table.”
Has it gone too far to reverse the decision?
“Has it gone too far to reverse the decision?”
No. There are a few options. First, they only directed staff to draft the C.U.P., which means they have not approved it yet. And second, they can always vote to re-consider.
I once sold a house where I found out my real estate agent was also representing the buyer on both sides (buying my home and selling their home). So she comes over to present their bid and as I’m reviewing it I asked her at what point in time was she going to divulge that she was also representing them. She looked shocked that I knew this and just replied “Oh, I was going to tell you”.
[quote]If the city is trying to engage Davis Diamonds about looking into multiple options around town – which they did in at this council meeting as well as before and after – and the person who is representing them in real estate (Mr. Santana) is also representing the seller in this case, Gene Simon, then Mr. Santana has a conflict of interest in this process. He does not have the incentive to look at other options.[/quote]
This is the problem in a nutshell. I am surprised City Council members did not seem particularly bothered by this issue. I was floored when I heard this. The three City Council members that voted for this made a huge mistake and need to rectify it; and City Staff and the Planning Commission got this one exactly right. I suspect the situation can be corrected; Davis Diamonds can work with City Staff and find a much better solution; and this questionable broker will not gain from a clear conflict of interest.
[quote]Here is a clear cut case where problems with the process undercut my confidence in a decision where I agreed with the ultimate outcome.[/quote]
What problems with process are you referring to? From where I sit, the city staff did all the right things; appropriate city commissions weighed in as required; and the matter went before the City Council in the appropriate way. I’m not seeing where “process” was the problem. The problem was three City Council members up for reelection pandered to a large crowd of parents with children, and didn’t fully think through the issue. However, there is an opportunity for these three, through the proper exercise of proper process, to undo their mistake.
IMO, Mayor Krovoza and Council member Swanson had this exactly right. The current decision sets a terrible precedent and does no service to Davis Diamonds, that appears to have been manipulated by a broker who had a clear conflict of interest. Why not step back and at least explore the possibility of a better solution for Davis Diamonds, if the city (at the behest of the City Council) is willing to do all it can to facilitate such an endeavor?
I don’t have any problem with the city here, however, the basic problem is that the council majority on this issue made their decision based on what was going on in the room rather than what was going on outside of the room. That is a problem. The fact that is legal for the broker to be an agent for the buyer and seller and probably to act as a gatekeeper to other potential buyers is a huge problem. That’s what I mean when I say process issues.
How did you get that $250,000 estimate?
Why is it Davis Diamonds problem that the so called good planning of Davis has made the city dependent on car sales taxes? That Davis has, over the years, failed to diversify its funding stream can’t be called good planning. Another unintended consequence of the opposition to growth. How much revenue was lost to Woodland when Ross was opposed? Just one example
[quote]I don’t have any problem with the city here, however, the basic problem is that the council majority on this issue made their decision based on what was going on in the room rather than what was going on outside of the room. That is a problem. The fact that is legal for the broker to be an agent for the buyer and seller and probably to act as a gatekeeper to other potential buyers is a huge problem. That’s what I mean when I say process issues.[/quote]
Thanks for the clarification, and I totally agree with you. Nice article, by the way!
“She noted that staff has been talking to some prospective auto dealerships and that there is an offer on the table.”
If this is indeed true, the Council should hit reverse and pursue the agreement with the auto dealership. We need the revenue. There are alternatives for the Davis Diamonds. They just don’t want to pay for these alternatives and want a city “subsidy” to get a cheaper location. It is cheaper, because of how it is zoned. (The “subsidy” is the potential loss in revenue to allow the conditional use.)
This isn’t the first time a youth oriented business has lobbied for special treatment. The Davis Musical Theater group still owes the City money (and tried to default on the loan) after the City determined that it was losing money (and essentially subsidizing the group) through its lease of the Varsity Theater. Not only did that group get a Conditional Use permit for its new location, but the City had to loan the group a substantial amount. The scenario was the same – little cute kids and their parents at the Council meetings and Council members not wanting to look like ogres.
Mr. Toad: named sources
To answer your question: It’s not Davis Diamonds problem, they are innocent (largely) victims in this along with the kids.
Davis Musical Theatre is a sad story because in addition their failure to being willing to share the Varsity with The Palms drove the Palm out of town. Losing the Palms was a huge cultural loss for Davis. Also densification made the Palms old site more valuable as housing. Another loss before the alter of no growth.
But is it that they are too cheap or is it that their business model isn’t viable with higher rent?
[quote]”Some sources estimate he may make as much as a quarter million off this deal alone.” [/quote] Sez who? If you manufactured this figure, you should take responsibility and describe whether it’s just the standard Realtor’s fee. If others made it up, you should tell who they are and whether they have any bases for their “[s]estimates[/s]” guesses.[quote]”…the real problem that went down here is that we really do not know to what extend Mr. Santana poisoned any alternative location discussions due to his own financial interests.”[/quote]So, you know whether he did it or, if he did, for what reasons? Odd that this story–and the language used–is based on this contention being true even though you “really do not know” whether it is. Is it possible your language is overblown and your conclusion premature? [quote]”…it became clear that the children and families that utilize the Davis Diamond Gymnastics facility were being used in order to line the pockets of several key monied interests.”[/quote]Other than the seller (the building owner whose property has kept below “market value” by a city’s unrelenting effort to suck in auto sales tax) and the Realtor, what “pockets” are being lined? Why are these other unnamed people labeled “several key monied interests”? This is nothing but a business transaction that benefits the parties involved, primarily Davis Diamonds, as well as our community.
JustSaying:
I’ve reported what I can report right now, when I know more, you will see it in a follow up piece.
“This is nothing but a business transaction that benefits the parties involved, primarily Davis Diamonds, as well as our community.”
You are sorely mistaken if you believe that.
Mr. Toad: Tell us about the lost revenue to the city. What other than Ross?
[quote]That Davis has, over the years, failed to diversify its funding stream can’t be called good planning. Another unintended consequence of the opposition to growth. How much revenue was lost to Woodland when Ross was opposed? Just one example–[b]Toad[/b][/quote]Ross had nothing to do with growth. Ross was an issue a group of neighbors organizing to preserve their neighborhood grocery store, and they succeeded. Most cities that have grown a lot are in far worse financial shape then we are.
[quote]Davis Musical Theatre is a sad story because in addition their failure to being willing to share the Varsity with The Palms drove the Palm out of town.–Toad[/quote]This is completely false. Council tried to get the Palms into the Varsity long before we the current use was proposed. It is a long story, but the Palms preferred the physical layout of the site in Winters.
DMG [i]”I’ve reported what I can report right now, when I know more, you will see it in a follow up piece.”[/i]
Rumor and innuendo may be fun, but unless you have facts to back up your claims, you are just being dishonest.
The rents really are too high on our non-retail commercial sites because we have a shortage and a monopoly situation. hat is precisely why I took the lead to zone the Hunt-Wesson in a manner that would increase the number of lots available for neighborhood-compatible high tech industry and for non-profits such as this.
In terms of Davis musical theater, the city had been subsidizing them heavily at the Varsity and I think the city should continue to give them a bit of support now as well as part of our arts funding, because they are also a gem.
The city gets very good bang for the buck by giving a small amount of support to some key non profits. We get all of the benefits of the programs with a tiny contribution. We can often get better value to the community by leveraging our arts and recreation funds to help select private and non-profit efforts.
I don’t understand why the issue of the real estate broker is relevant, unless there were other sites available and he misinformed the owners of Davis Diamonds concerning the availability and cost of the other sites. I talked with the owners of Davis Diamonds about alternative sites, and they believe that they have explored them and that are none that are viable.
Staff is still working with them to see if other sites can be negotiated. Staff can double check the willingness of other owners to make this work.
Sue Greenwald “The rents really are too high on our non-retail commercial sites because we have a shortage and a monopoly situation.
The same is true for our retail commercial sites as well, especially downtown.
[i]”The city gets very good bang for the buck by giving a small amount of support to some key non profits. We get all of the benefits of the programs with a tiny contribution. We can often get better value to the community by leveraging our arts and recreation funds to help select private and non-profit efforts.”[/i]
Excellent point.
“I don’t understand why the issue of the real estate broker is relevant, unless there were other sites available and he misinformed the owners of Davis Diamonds concerning the availability and cost of the other sites.”
The Broker is only relevant if there is proof of malfeasance on his part.
[quote]The rents really are too high on our non-retail commercial sites because we have a shortage and a monopoly situation. hat is precisely why I took the lead to zone the Hunt-Wesson in a manner that would increase the number of lots available for neighborhood-compatible high tech industry and for non-profits such as this.
[/quote]
Perhaps it is worth looking into zoning solely for non-profit outfits in future developments. I agree many of these non-profits benefit the communioty. Also having some concentration of non-profits in one place makes a great deal of sense. (I am assuming here that Davis Diamonds is set up as a non-profit though some of these businesses are for-profit.)
My guess is that 3-4 years from now, when the economy is strong and auto sales are strong, a fair analysis will show that putting a gymnastics group in one of the only auto dealership sites ends up costing the City a lot of money.
I think David’s perception — that the vote in favor was entirely those running for office this year and those against was entirely those not running for office this year — was spot on. In other words, this deal is short-term thinking. It will hurt the coffers of the City of Davis in the long term.
To those who point out that Davis is overly dependent on auto sales for its sales tax revenues, I agree, you are right. But it does not make us better off to lose any of the auto sales sites, especially any of those on Chiles Rd.
All cities–well, check that, most cities–in California love to have auto dealers, because they impose very low costs on the city at large and they generate good tax revenues. Davis has a small number of sites for auto sales; and a small range of brands available for sale. Ideally, over the next 10 years, Davis dealers would be adding brands that we don’t have. They can’t do that when the economy is sour. But our City would be much better off over time if we had some new or expensive marks, like Tesla or BMW or Mercedes, available here. But that cannot happen if a gymnastics club is sited in one of the few places we have open for car sales.
[quote]”This is nothing but a business transaction that benefits the parties involved, primarily Davis Diamonds, as well as our community.”
“You are sorely mistaken if you believe that.”[/quote]Perhaps, but nothing you’ve reported here suggests that I am–well, other than the name-calling in which you’ve engaged. If you missed the fact that the Diamonds (and our kids) were principle beneficiaries of the permit request, I guess I can’t say anything to convince you. I saw the same council meeting you did.
There are interesting take-aways from last nigh other than what you’ve observed–the avarice of “several key monied interests,” the misguided ignorance of “the children and families that utilize the Davis Diamond Gymnastics facility (who are) being used and the cowardice of “the three councilmembers who faced re-election voted to support the conditional use permit rather than risk the anger of a large audience of children and their parents.”
For example, it certainly seemed to me that the council members were ill-served by the staff members. It was apparent that councilors struggled for lack of staff preparation as the topic dragged on for hours and breaks were required to interview and negotiate with the parties, things that should have been accomplished well [u]before[/u] the council had to face the decision.
It appeared that the staff had concluded that the council wasn’t about to overrule the planning commission and the staff and, therefore, failed to provide the analyses, options and impacts councilors wanted and needed to decide the issue. This certainly isn’t the first time the council has been placed in this setting.
To demonize Xavier Santana in order to say the council was manipulated is wrong. Instead, this obviously was a difficult decision, one that doesn’t have a “right” answer and a “wrong” answer.
I particularly was moved by Sue’s agony, surprised and pleased by her decision and am sure you don’t have her support in you suggestion that she finally was motivated by re-election desires and fear of the audience. Where you saw chicken hearts, I saw profiles in courage.
I support the decision regardless of whether a “better” solution is developed in the coming weeks. It acknowledges that government financing is facing changes, that the automobile sales tax model probably isn’t sustainable as the auto buying process changes and that there are lifestyle considerations that our leaders find are at least as important as chasing sales taxes.
Furthermore, the decision has minimal impact on the overall auto mall strategy. Still, granting a conditional use permit could have been a difficult decision with any participants. I’m surprised we had to find a villain here and supply no evidence to support the charge.
[quote]”But our City would be much better off over time if we had some new or expensive marks, like Tesla or BMW or Mercedes, available here. But that cannot happen if a gymnastics club is sited in one of the few places we have open for car sales.”[/quote]How much space does the new BMW dealer need? How much space (that’s been vacant for how long?) is being taken over by Davis Diamonds? How much space still is left in the auto row acreage?
Maybe we should have targeted some of the RDA blight money to build a nice athletic center, youth center, etc., instead of parking lots. Is it too late?
If you agree, Rich, that we’ve become overly dependent on auto sales taxes* to fund our city government, why would you be spending the next 3-4 or 10 years agonizing about no longer having one (still vacant?) building that a Mercedes dealer could have awaiting its eventual arrival?
What other types of development have you found cities “love” for their low-cost, high return characteristics? Would it be promising to spend time chasing them?
____________________
*Were you surprised that a city council member up for re-election would announce that he bypassed the Davis Auto Row to buy his new car on-line from Japan? I say this is evidence that you and David are way too cynical (not spot on) in seeing re-election self-interest in these decisions.
[quote]”I don’t have any problem with the city here, however, the basic problem is that the council majority on this issue made their decision based on what was going on in the room rather than what was going on outside of the room. That is a problem.”[/quote]What is your basis for claiming this? What does it mean anyway? That they listened to public comment and it affected their decisions?
What was “going on outside the room” and why should it have had any more impact on their decisions than it did have?
[quote]”The city gets very good bang for the buck by giving a small amount of support to some key non profits. We get all of the benefits of the programs with a tiny contribution. We can often get better value to the community by leveraging our arts and recreation funds to help select private and non-profit efforts.” [/quote]The city could be more supportive by providing space in parks and working with the school district on joint programs with non-profit and for profit recreation endeavors. We have several examples of this kind of successful partnership. (But, now we’ve proposed to sell of the baseball park to housing developers.)
JustSaying: Bear with me, everything is going to come out. Everything I printed today is accurate, but it is not the full story.
In my opinion, the tide might have turned if Harriet had not possibly erred in her opinion that the applicants had to agree to issue a continuence. After the break to allow the parties to discuss whether they would allow a continuence, Joe had Harriet state what apparently they had discussed during the break, that the parties did not have to agree to continue the issue to date certain.
Any comments on that?
JUST: [i]”If you agree, Rich, that we’ve become overly dependent on auto sales taxes* to fund our city government, why would you be spending the next 3-4 or 10 years agonizing about no longer having one (still vacant?) building that a Mercedes dealer could have awaiting its eventual arrival?”[/i]
If we wait a few years, a car dealer will be in that spot. No doubt about that. And that dealer will help fill the City’s coffers. No doubt about that, either.
We are not overly dependent on auto sales taxes because the I-80 auto dealers of Davis are selling too many cars or because we have zoned in too many auto sellers. We are overly dependent on auto sales taxes because we lack most other categories of retail sales.
And we lack some large scale categories of retail sales in large part because of the policy preferences of our elected officials and in all likelihood the policy preference of most (or at least many) Davis voters.
We could, for example, attract a developer who would build a shopping mall on Mace Blvd north of Ikeda’s. (I realize that in the current economy, this would not be possible. But assuming good times come back some day, it could get done.) The shopping mall could feature anchor stores like a Costco, a Fry’s, a Home Depot and a Nordstrom. That sort of large-scale freeway mall would get rid of most of our sales tax leakage.
But for a variety of reasons, the people of Davis don’t want that. It would harm existing businesses. It would have some impacts on traffic (though these are always overstated). It might attract more crime.
If it had a Home Depot*, it would devastate Davis Ace and by extension much of downtown. My assumption is that Davis Ace is for many the anchor store downtown. Its pains would be felt by many downtown businesses, and most of those are locally owned.
As such, our lack of retail–and thus our over-reliance on auto sales–is largely the product of policy choices favored by the people of Davis. (It’s also possible that some retailers just don’t want to be in Davis, due perhaps to the hurdles we will put up before they arrive.)
*A note on Home Depot and Davis Ace. I shop all the time at Davis Ace for items that cost $30 or less. I bought a very nice “tea ball” filter a few days ago. I also patronize Hibbert’s. I recently purchased a flexible water pipe that connects one of my toilets to the supply pipe. Ace and Hibbert’s are good stores and they both have very good service.
However, if I need something that’s going to cost a lot–certainly if it is $100 or more–I can normally save a lot of money going to Home Depot in Woodland. As I wrote in a recent column, I recently bought two new low-flow toilets. (The City of Davis effectively paid 100% of my cost for them with its rebate program. ([url]http://cityofdavis.org/pw/projects/toilet-rebate/[/url])) The sales tax for the pair was $15.19 ($196 x 7.75%). The fact that we don’t have a price competitive store for costly hardware or replacement windows or many large home items is a loss for the coffers of the City of Davis. …
Along these lines, I plan to replace a section of my backyard decking this year. For price reasons, I will buy my new decking out of town–either Lowe’s or Home Depot. I will probably spend about $1,000 to $1,200 (depending on which brand of fake wood I go with). That I cannot get the same price in Davis will again cost the City a good amount of sales tax. I, personally, would prefer this were not the case. But I think most Davis shoppers disagree with me.
Note Rich that Home Depot does not carry “tea balls”… they don’t carry housewares.
Regardless, I disagree that a Home Depot on the periphery would “devistate” the downtown as you put it. As you also point out, you already shop at Home Depot in Woodland AND Davis Ace.
Aside from houswares and the gravel yard, Ace carries a subset of the same products carried by Home Depot. Same with Hibbert. However, Home Depot also carries things that Ace and Hibbert do not carry (for example, flooring, building supplies and large appliances). Home Depot also carries a larger selection of products… some that Davites are ordering online.
The way I look at it, we are giving up the tax revenue we would gain from all these other Home Depot-carried products (things that Davisites are purchasing outside of Davis) only to protect Davis Ace and Hibbert. So, in effect, we are taxing ourselves more to protect the owners of Davis Ace and Hibbert. When did local merchants become our charity cases?
In any case, I don’t think either would be harmed that much.
Home Depot in Woodland, Vacaville and West Sacramento are not that far away. We already shop there. I don’t think having one on the periphery of Davis will do much to change our shopping habbits (like you said, Davis Ace and Hibbert are both good stores). However it would likely increase our city tax revenue as we retain more of our own shopping dollars.
My guess is that a Home Depot in Davis would hurt Woodland Home Depot more than Davis Ace or Hibbert.
Jeff, you are always quick to point out the advantages to attracting more national and regional retailers to Davis. Do you perceive no disadvantages? Is the issue really as narrow as you describe it? And are the residents taxing themselves by shopping local to protect the owners of Davis Ace and Hibbert or are they actually acting in their own greater self-interest by doing so because they perhaps recognize benefits to shopping local?
DT Businessman aka Michael Bisch (Davis Commercial Properties and DDBA Co-Prez)
[quote]In my opinion, the tide might have turned if Harriet had not possibly erred in her opinion that the applicants had to agree to issue a continuence. [/quote]There are generally statutory limits for the legislative body to take an action. In many cases, failure to act is deemed approval of the action sought.
[i]”Do you perceive no disadvantages? (with national chain stores)”[/i]
Michael, I certain do… and I would never advocate open season developing peripheral land adding too much retail choice. As I have written, I think we need to be more comprehensive in our thinking about what will benefit us collectively as a community, and as individual citizens.
I think we can make a case that today we are making choices between adequate education funding and extreme downtown merchant protection. In effect, we are taxing ourselves to prevent our downtown from changing due to fear of competition.
It is interesting to think about this tendency of protecting our downtown merchants from competition and why – for example – we don’t also limit the number of new restaurants downtown to protect the existing restaurants.
I think we should be more visionary with a downtown revitalization plan and greater periphery retail development. I certainly don’t support uncontrolled growth. However, I think our downtown already suffers some loss of business due to general shabbiness and lack of redevelopment.
[i]Regardless, I disagree that a Home Depot on the periphery would “devistate” the downtown as you put it.[/i]
And you base this on what? A hunch? We have loads of data about what happens to downtown retailers when big box stores open on the periphery. Retailers are told by consultants that we should plan on AT LEAST a 30% drop in sales in the first year if they are in direct competition in their product mix. And that has been shown time and time again. Home Depot on the periphery, and any other large retail peripheral development, would have an extremely adverse effect — not only on the downtown, but on the neighborhood shopping centers. You change the traffic patterns, you cut the revenues to locally-owned businesses, and gradually your downtown and your neighborhood centers die out. Why would Davis be any different?
The downtown and the neighborhood shopping centers are at the heart of the general plan: providing close-access shopping for each region of town, including not just grocery but also other retail options.
Costco won’t open in Davis; Davis is within the demographic range of their Woodland store. Nordstroms? I doubt it.
The I-80 corridor is saturated with retail. If you build a big shopping center there and it succeeds, it is largely cannibalizing the rest of town, creating blight elsewhere. If it doesn’t succeed, you’ve created blight there. Look at the vacancy rates along the I-80 and I-50 corridors right now. Ask any commercial real estate broker how leases are going on Hwy Comm properties.
This is not only a foolish proposal, it would violate the core principles of our general plan. It would be following in the terrible planning practices that have harmed every community around us. The Davis downtown is stronger than every surrounding community for a reason.
[i]we are making choices between adequate education funding and extreme downtown merchant protection. [/i]
There is zero connection between sales tax revenues and local school funding.
[i]”There is zero connection between sales tax revenues and local school funding”[/i]
Don, then why are Sue and Mike and the rest of the anti-water works crowd so concerned about the water rate increases impacting the education parcel tax renewal? Also, what about the parks parcel tax? Aren’t these things connected bacause we lack general fund moneys and so extra taxes are required and they compete against each other?
Certainly there is a connection.
[i]”This is not only a foolish proposal, it would violate the core principles of our general plan.”[/i]
I don’t think the general plan considered the Internet and the development of shopping choice around us that pulls tax dollars that could otherwise be kept in our community.
I think it is foolish to be so limited in vision and so extreme in denial that we are missing opportunities for community benefit beyond a retail world that revolves around a proven inadequate Davis downtown.
[i]Don, then why are Sue and Mike and the rest of the anti-water works crowd so concerned about the water rate increases impacting the education parcel tax renewal?[/i]
You’re asking me to explain Michael Harrington’s and Sue Greenwald’s positions? I think they’re wrong. I guess we’ll see soon, eh?
[i]… shopping choice around us that pulls tax dollars that could otherwise be kept in our community. [/i]
Money spent at locally-owned stores stays local. Big box stores kill locally-owned stores.
If the city wants to get serious about increasing sales tax revenue, they will pursue the development of Nishi Farm site, and act quickly to deal with the parking problems downtown.
[i]”The I-80 corridor is saturated with retail. If you build a big shopping center there and it succeeds, it is largely cannibalizing the rest of town, creating blight elsewhere.”[/i]
I am not sure if you intended to write this, or rather you meant to write [i]”The I-80 corridor is saturated with retail. If you build a big shopping center there and it succeeds, it is largely cannibalizing [b]similar freeway shopping centers along I-80[/b], creating blight elsewhere.”[/i]?
As to Jeff’s thought that a mall of the type I described would not hurt Davis Ace, I don’t agree. Ace is first and foremost a lumber and hardware company and they would be hurt. Hibbert’s would be, too. The Davis person who needs, say, $200 in redwood to repair his fence may find it more convenient (and cheaper if the wood has to be delivered) to buy it in downtown Davis, today, but would likely opt for the Home Depot in Davis were it here. The wealthy El Macero, East Mace Ranch or South Davis homeowner who is not price sensitive when shopping for $500 in power tools will buy those in Davis now, because that is convenient, but would go to a closer Home Depot were that option available. The woman who now buys shoes in downtown Davis, who also needs a set of wrenches, might opt to drive out the Nordstrom’s at the freeway mall and while there buy those wrenches at the Home Depot.
Insofar as Davis Ace is an anchor in the downtown, when it loses the guy buying fence boards, the rich guy buying tools and the lady buying wrenches, all of the small stores and restaurants in downtown which depend on those customers coming to Ace are likely to suffer, as well. The math on this seems obvious. One point I concede about Target in Davis, which I favored, was that it would hurt Ace’s home store sales, because those directly compete. Yet because Ace sells so much more than “tea balls” — they also have a pet store where I always buy my dog’s food for a better price than I can get at Petco, which is closer to my house — I didn’t think the loss of sales due to Target would drive Ace out of business. I think a Home Depot in Davis would. And I think it is likely that development would really cost the smaller retailers in downtown. And added together, that very well may hurt all of the cafes and restaurants, at least for a while.
So it comes down to policy preferences. And Davis has decided in the general plan and in its actions it (or should I say we) don’t want to allow the freeway mall that solves the sales tax leakage problem.
Don’s argument, that we ought not have a freeway mall of the type I described because it does not fit in our general plan strikes me as circular. We could always change the general plan. But I am sure what Don thinks is right is that the general plan should remain as it is (in this respect) because he thinks that works best for our values as a city and because the resultant changes would create a Davis most people who live in Davis don’t want. I think that is a reasonable point of view.
My entire point in raising the peripheral question is to point out that Davis will always have a retail sales tax leakage as long as we constrain big box retail the way we do. Given that, and assuming it won’t change, we need to be planning for and encouraging more auto mall business, not less.
Don Shor:
I choose to shop in Davis whenever I can and I believe strongly in the value of shopping locally primarily from other locally owned companies. In fact, I am not all that price sensitive when I shop as I am mostly interested in good service. That is the main reason for instance why I shop for plants and garden supplies at your place first. Unfortunately the reality is that most of what I need to buy in life is not available in the local market at any price, let alone a reasonable one.
You have such a strongly negative ‘knee jerk’ reaction to any discussion of improving retail in Davis that you seem to think the only options are to maintain the retail monopoly downtown or allow unchecked big box development on the periphery. Unfortunately it is that ‘black and white’ view that is killing the downtown just as certainly as allowing unchecked development would (unless of course you like the growing wasteland of bars and mostly mediocre food that has taking over the core). There are alternatives, but they require giving up the downtown monopoly and rethinking about what it means to grow a diverse and vibrant retail environment in town. Maintaining the current approach will simply continue the inevitable decline.
By the way Don, where do you buy clothes in Davis? I haven’t been able to buy clothes in this town since I was in High School back in the 70’s. If you know of a place, please let me know. Thanks.
[i]You have such a strongly negative ‘knee jerk’ reaction to any discussion of improving retail in Davis that you seem to think the only options are to maintain the retail monopoly downtown or allow unchecked big box development on the periphery.[/i]
Peripheral retail is not “improving retail in Davis.” I do not have the dichotomous thinking you are describing. What is interesting is that the proposed solution you, Jeff, and others always come to is: big box development on the edge of town. That is old-school thinking, obsolete planning, and a certain recipe for blight.
[i] “the growing wasteland of bars and mostly mediocre food that has taking over the core).”[/i]
As I have noted on several previous threads on this topic, Davis has more downtown retail, and a healthier mix, than any nearby city — Vacaville, Woodland, Folsom, Fairfield, Dixon. That is not an accident.
I really don’t know why you choose to disparage the restaurants in Davis, nor why you and Jeff seem to like to denigrate the quality of the downtown businesses with phrases like “general shabbiness” [Jeff]
[i]“There are alternatives, but they require giving up the downtown monopoly…”[/i]
There is no downtown monopoly. This is a misconception, and it brings up a point that needs to be re-emphasized over and over. The current general plan and the longtime philosophy of Davis has been to protect the downtown [i]and the neighborhood shopping centers.[/i] Not to mention the small pockets of retail such as where I am on Fifth Street, Olive Drive, and other less-official retail areas. The worst impact of peripheral development is always on the smaller retail locations. If you really want to drive the nail in the coffin of the East Davis and West Davis shopping centers, go to big box development.
“…and rethinking about what it means to grow a diverse and vibrant retail environment in town. Maintaining the current approach will simply continue the inevitable decline.”
City downtowns decline when they develop retail on their periphery. That is provable in every nearby city.
I used to buy clothes at Winger’s, Gottschalks, and occasionally James Anthony. A men’s retail store would be great. But we won’t get one with what you, Rich, or Jeff are proposing. Nor is one likely anytime soon in the downtown or elsewhere. Sorry, Mark, you and I aren’t a very desirable demographic.
Rich:[i] “Don’s argument, that we ought not have a freeway mall of the type I described because it does not fit in our general plan strikes me as circular. We could always change the general plan…”[/i]
Certainly. The general plan is the result of considerable public input. I don’t remember when it is next due to be updated. It is a long process involving many, many hours of citizen meetings. What is unusual about Davis, and one of the things that makes it such an attractive city, is that the public is very involved in the planning process. In most cities, planning is a passive process of city staff reacting to proposals by land developers. That is partly why some people say Davis has an “anti-business” reputation: the public participates in decisions about the way the city grows. I doubt the voters of Vacaville had any say in the near-total decimation of their downtown.
[b]”… we won’t get one with what you, [b]Rich[/b], or Jeff are proposing.”[/b]
I have not [i]proposed[/i] we permit the building of a peripheral mall. Rather, I believe that if our largest purposes are to close our retail sales tax leakage and to make us less dependent on auto sales, a mall on Mace with Costco, Home Depot, Nordstrom’s and Fry’s Electronics would do that.
My proposal is that we try to attract more auto sellers, even at the risk of hurting a gymnastics club.
[i]” I doubt the voters of Vacaville had any say in the near-total decimation of their downtown.”[/i]
They certainly voted with their dollars, no?
Mark, you’re more likely to know than any of us. Has there been any movement on the pads near Target across from your business there?
[i]They certainly voted with their dollars, no?[/i]
Some did. And when retailers lose 30% of their sales, many aren’t likely to stay in business.
Don Shor: [i]”What is interesting is that the proposed solution you, Jeff, and others always come to is: big box development on the edge of town”[/i]
I don’t recall ever advocating big box development. I believe I have been fairly consistent arguing that we need to diversify our retail in town by expanding beyond the downtown.
[i]”I do not have the dichotomous thinking you are describing.” [/i]
No matter what I (or seemingly anyone else) say you respond with a diatribe against peripheral big box retail. Yes, you do have a dichotomous approach.
“[i]Davis has more downtown retail, and a healthier mix, than any nearby city — Vacaville, Woodland, Folsom, Fairfield, Dixon. That is not an accident.” [/i]
To describe Davis’ downtown retail situation as ‘healthy’ requires the most rosy colored glasses ever found.
[i]I really don’t know why you choose to disparage the restaurants in Davis, nor why you and Jeff seem to like to denigrate the quality of the downtown businesses with phrases like “general shabbiness” [Jeff]
[/i]
I am not disparaging the restaurants in Davis, I am simply stating a fact. There are a small number of very fine establishments in town, and a much larger number of places that make no pretense of producing ‘fine food.’ To say otherwise would not be honest. Similarly, I do not think that Jeff ‘denigrates’ downtown businesses when he comments on the “general shabbiness.” as I believe he is commenting on the buildings, not the businesses inside (correct me if I am wrong Jeff). I don’t blame downtown businesses for the state of the downtown, I blame the property owners and the monopoly on retail property gifted to them by the City.
“[i]If you really want to drive the nail in the coffin of the East Davis and West Davis shopping centers, go to big box development. [/i]”
Nope. The nail was driven in when the City allowed the Nugget market to open the Covell store [b]and at the same time[/b] continued the requirement that neighborhood centers have a grocery store as their anchor.
“[i]Not to mention the small pockets of retail such as where I am on Fifth Street[/i]”
I remember a time when your proposed store was viewed as an attack on the health of downtown businesses.
[i]I remember a time when your proposed store was viewed as an attack on the health of downtown businesses. [/i]
Really? No. The planning staff opposed the style of our building. Nobody opposed our project, at least not openly. We were zoned correctly, we made accommodations for the design elements, and the Design Review Committee (remember that?) overruled the city staff and allowed us to build a barn, instead of the box-shaped building the staff was insisting on. Maybe you know something I didn’t know at the time, but there were no public objections to the Redwood Barn Nursery.
[i]To describe Davis’ downtown retail situation as ‘healthy’ requires the most rosy colored glasses ever found. [/i]
Compared to every other downtown in the region, Davis is healthy.
[i]we need to diversify our retail in town by expanding beyond the downtown. [/i]
What are you specifically proposing?
[i]”Similarly, I do not think that Jeff ‘denigrates’ downtown businesses when he comments on the “general shabbiness.” as I believe he is commenting on the buildings, not the businesses inside”[/i]
That is correct. The quality of the service common with the Davis downtown merchants is generally very high in my experience.
There are two general types of shopping:
1) [b]utility[/b] – get in and get out as quickly as possible finding what you are looking for a reasonable price;
2) [b]discovery[/b] – browse, learn, try, experience, sense, feel, and be entertained.
The Davis downtown is trying to do both while doing both a bit poorly.
As for utility, product choice and parking are big downtown downers. The downtown merchants are reasonably competitive on price for comparable goods. Also, the service is great and that does offer some offset for utility (For example, I am better buying my paint from Davis Ace, Hibbert of from Ralph than I am Home Depot if I have any questions.) However, I think there is much more sales leakage due to the lack of choice (including some entire product categories not carried) that we care to admit.
As for discovery type shopping, this is where I see both an opportunity and a problem related to the generally shabbiness of the storefronts, sidewalks and roads as designed and maintained. Parts of G Street are quite shabby.
I don’t think the downtown can compete on utility. It can service part of the population (those living in the core area and surrounding area) and maybe cover some niche areas on service quality, but those of us living on the periphery (most Davisites) are already driving to Woodland, West Sacramento and west, and using the Internet, to shop.
Likewise, I don’t think small neighborhood shopping malls can do utility very well. A small grocery cannot carry enough brands to make enough shoppers happy. I have grown weary of the concept due to the problems with the Westlake shopping center. If I am utility shopping I will just go to the nearest grocery store that carries all the products and brands I want.
My thinking is that the Davis downtown should focus more on discovery shopping… becoming more of a destination for shopper that want to have a good time and have their senses stimulated by the experience. That is the problem I have with the exterior shabbiness. It assaults the senses instead of exciting the senses. Related to this, we have opportunities we are not exploiting due to the lack of churn and redevelopment.
We should be building a parking structure and redesigning E or F or G to be a pedestrian promenade with outdoor cafe seating and more specialty shops. We should be allowing some peripheral retail development for the utility shopping that is already leaking to other cities.
I have one other though… without other retail options it seems that downtown rents are quite high. Allowing some peripheral retail might reduce some downtown business revenue, but it should provide some rent relief too.
[quote]”And are the residents taxing themselves by shopping local to protect the owners of Davis Ace and Hibbert or are they actually acting in their own greater self-interest by doing so because they perhaps recognize benefits to shopping local? “[/quote]I’d guess that residents don’t even know the economics of these options because the city council has been so focused for so many years on the automobile sales tax cash cow.
How much sales tax from out-of-towners do our local stores draw now, even the bigger businesses like these our hardware stores?
Come to think of it, why is it okay to for the city to purposely bring in bring in businesses that directly compete with our local businesses (Swift Chrysler-Jeep-Dodge-Kia, University Honda, Freeway Ford-Mercury, etc.). Yes, I’m talking about the recent million-dollar Hanlees boondoggle.
Maybe it’s time to re-look at our city’s strategy. It seems odd that we’d be in such agony deciding whether we should reserve a long-vacant space for more, possible future competition against our local auto dealers or we should support an already existing local business that provides recreation services for hundreds of our children.
Is this really the way we want the city council to use our tax money and zoning laws? Are they selecting the winners and losers that we want picked?
“I have one other though… without other retail options it seems that downtown rents are quite high. Allowing some peripheral retail might reduce some downtown business revenue, but it should provide some rent relief too.”
Good point !
My understanding is that lease rates per square foot are higher in the South Davis shopping center, in spite of all the vacancies, than they are downtown. But others who participate here might have more reliable information about that. My info is second-hand.
Don, I know one of the owners of the Davis Creamery that moved from there to a downtown spot says he is paying almost half the rent he was paying in the south Davis shopping center. Based on everything I have heard, the landlord of the south Davis mall is willing to drive away renters and sit on vacant property rather than bring his rates down to market.
So I think your point is valid.
Although it appears that the south Davis landlord is irrational so I don’t know if using his rents for an example provides a valid picture.
I didn’t ever “go shopping” outside Davis for decades. (Fortunately, my job and family events took me places where I regularly picked up clothing and other items.) But, I cannot remember going to Sacramento or Woodland to shop more than once a year.
Now, my top shopping runs are to Nugget, Safeway and Ace in Davis and the Woodland Costco store, with an occasional trip to the Arden Fair Apple Store to keep current.
Who are we really helping with our long-standing policy to keep out the big stores? Is this simply protectionism for local small businesses or does it somehow benefit the citizens of Davis? Other that our auto sales tax emphasis, are we happy to limit our shopping opportunities to those that generate only local citizens’ sales taxes.
How much does on-line shopping change the situation? What are the lessons of our Borders experiment?
I was in Kailua, Oahu Hawaii a few weeks ago and shopped in a small footprint Macys. It was awesome and I think it would work for downtown Davis… if we had a non-shabby space for it.
Don Shore: [i]”My understanding is that lease rates per square foot are higher in the South Davis shopping center, in spite of all the vacancies, than they are downtown. But others who participate here might have more reliable information about that. My info is second-hand.” [/i]
Landlords who are interested in keeping their stores occupied during an economic downturn are willing to renegotiate their rents to help their tenants survive. Every report I have seen implied that the landlord in question at the south Davis site had no interest in renegotiating leases, perhaps because he was in the process of selling the property.
When we limit the retail zoning in town, we give property owners with retail zoning a subsidy allowing them to demand higher rents than they would otherwise be able to get. This in turn limits our ability to attract a diverse retail mix. There are a number of commercial buildings in town, but most are not zones for retail. This gives the downtown a virtual monopoly on available retail space, resulting in higher rents, and a selection of businesses able to pay high rents, which in our case means high priced specialty stores and bars.
But…there are pads right next to Target in Second Street Crossing, approved for retail by voters, ready for development. So various of these retail options could come to Davis right now.
But…there are pads right next to Target in Second Street Crossing, approved for retail by voters, ready for development. So various of these retail options could come to Davis right now.
Wonder what’s in store for the shopping mall now anchored by Radio Shack and the Coop.
Don: [i]”But…there are pads right next to Target in Second Street Crossing, approved for retail by voters, ready for development. So various of these retail options could come to Davis right now.” [/i]
My understanding – which comes from hearsay – is that those pads are owned by Target and are available for sale at a price that currently does not reflect the present market value, but rather some premium above market. Apparently, Target does not wish to be a landlord and they currently have no incentive to sell at a price below their asking.
So we haven’t restricted the retail zoning. The owner of prime retail peripheral property is intentionally restricting its development. A property owner in South Davis is intentionally keeping rents high and property vacant. A property owner in West Davis kept his shopping center vacant for years.
I don’t think the problem is the city.
[i]”As for utility, product choice and parking are big downtown downers.”[/i]
A place I have a terrible time finding a parking space is the University Mall. You might think it is the popularity of Trader Joe’s and/or Cost Plus, but I am not sure. (I’ve never been in Forever 21.) I have had mid-morning experiences lately where TJ’s and Cost Plus are nearly empty of customers, but every spot in the Mall lot is taken. My suspicion is that campus visitors or students are parking at the Mall for a few hours or more and no one from the Mall is stopping that. Or maybe there just are too few spaces in the Mall?
Don: [i]”So the owner of prime retail peripheral property is intentionally restricting its development. A property owner in South Davis is intentionally keeping rents high and property vacant. A property owner in West Davis kept his shopping center vacant for years.
I don’t think the problem is the city.”[/i]
Give me a break! The south Davis center was in the process of being sold. No selling landlord would renegotiate at that point. Instead, they would allow the new buyer to make that decision. As for Target, they bought the land before the recession and are apparently not under any financial pressure to sell below their purchase price. Neither situation has anything to do with the City.
On the other hand, How many years was the old Ralph’s (Alberson’s) facility on 8th street vacant because the City insisted on another grocery store instead of any other option? That is clearly on the City, as is the situation out at Westlake.
The south Davis center has been sold. Are the rents going down now?
Mark, what exactly is it you want the city to do to enhance retail here?
Wow, the misstatement of facts is breathtaking here. Mark, you’re 100% wrong about the downtown rents. The average retail rent at the Nugget center on Poleline, Anderson Plaza, Market Place, University Mall, the South Davis Safeway center, and the 5th Street Commerce Center strip mall are all significantly higher than the average retail rent in Downtown. What are you talking about?
Jeff, the downtown would love to compete against retail in other communities, but the city council and various narrow interest groups saddle the downtown with impediment after impediment. Yet you blame it on the downtown merchants. Bizarre! The DDBA has been advocating non-stop for 3 years for downtown improvements, all such attempts utterly rejected by the council, yet you say the downtown is being protected. The downtown is not being protected, it’s being stifled by the city council. The council is absolutely stifeling the evolution of the downtown. Let’s not take action, let’s conduct a study! Any attempt at improvement, innovation, creativity is immediately met with absolute opposition from one narrow interest group or the other to which the council kowtowes. Whether it’s the Old North Davis Neighborhood Association, the save the bungalow types, some (but not all) of the bicycle advocates, the downtown is stuck in the ’80s.
What a luxury to take a cheap piece of vacant land on the periphery, cut new pads, put in new roads, sewer, high speed internet, build brand new retail structures designed to meet contemporary shopping needs, and construct a plethora of parking. Where is ANY of that possible in the downtown?
You talk about shabbiness in the downtown? What do you expect when the majority of the buildings were built in the ’50, 60’s, and 70’s? They were poorly designed, poorly constructed, and poorly maintained. And what about the streets, sidewalks, and lighting? The city is taking some steps to correct these issues, but it could have taken substantially more. And it could have removed any number of restrictions prohibiting developers from redeveloping the downtown. Instead, the council has preferred to keep the downtown as is. “It’s quaint”.
You bemoan the lack of retail quality space in the downtown. Of course the city is one of the largest owners of vacant land in the downtown? And what steps has the council taken to develop them? Zippo! It came close to developing the 3/4/E/F surface parking lot and then suffered an anxiety attack. We had $20 something million RDA dollars that could have made a massive impact on the downtown, but the council choose to equivocate. Now the RDA has been annihilated. Talk about a failure of leadership.
And let’s be clear about Don’s General Plan comments. They are absolutely accurate. A vibrant downtown supported by vibrant neighborhood shopping center. It is incredibly frustrating to hear certain individuals claim that there is no support for what the DDBA has advocated. Really? Did the DDBA write the General Plan, the Core Area Specific Plan, the Downtown and Traditional Neighboorhood Design Guidelines? I don’t thinks so. Yet all these documents call for densification and development of substantially more retail, office, and residential units in the downtown. The DDBA advocates for nothing less than the city implementing the strategies contained in these planning documents.
I really wonder where some of the posters above get their info. It’s like a Twilight Zone episode. I might add, the downtown is merely a microcosm of the general local economy. It is being completely stifled by numerous constraints. Let’s be frank. Economic development and job creation has not been a priority for the political leadership of this community for many, many years. There are countless impediments to business growth and attraction that need unwinding. 4 years into a recession and we’re still not taking decisive action to create a robust economy?! For Godssake, there is a gigantic economic opportunity engine immediately adjacent to the downtown! Instead we’re moving tankhouses all around the downtown, demolishing or not demolishing bathrooms, battling with UCD, carbon neutralizing, fabricating non-existing historical districts, taking road diets, reversing into angled parking lots.
I’m not opposed to any of these policies. But if your running a deficit, cutting services, the pot holes are getting bigger, the schools are struggling for funding, residents are having to drive to Sacramento and the Bay Area for decent paying jobs, when are you going to make core services, a sustainable budget, and economic development the absolute priorities?
DT Businessman (aka Michael Bisch, DDBA Co-Prez, Davis Commercial Properties, Ranter in Chief)
PS: If these comments don’t kick off a firestorm then there’s more than selium in our water. I’ve gored virtually every ox in town. I can’t spell either.
Selium? Selenium?
What percentage of the buildings zoned retail downtown actually have a shop in them. Not a bar, restaurant, real estate office, lawyers office, movie theater etc., but an actual store where you can walk in, try something out, and and buy it? What percentage of the commercial buildings (not bare land) in town are actually zoned for retail? I don’t have the answer to these questions, but my guess is that in both cases we are looking at fewer than 50%. Restaurants and bars are great, but going to them is not shopping. It is entertainment. Lawyers, and real estate offices are really service, not shopping. So walk around the downtown someday and see what percentage of your daily household needs can be met there, then drive around town and do the same. When we have 2-3 options for everything you need to buy, then we will have a vibrant and healthy retail environment that will stop the sales tax leakage. Davis will never have that, not because we can’t support it, but because our planning is moribund. Michael, I am willing to bet that thirty years from now the downtown will look just as shabby as it does now, probably worse, because that is exactly how it looked 30 years ago and we still haven’t learned to do anything about it.
Mark, what exactly is it you want the city to do to enhance retail here?
Geez, I already admitted I can’t spell, but then I still get called out, and on a Latin term at that?
Mark, I actually agree with your 7:15am post, but disagree with the reasons you were citing yesterday. The downtown is not asking to be coddled and protected. We have been continuously suggesting to the council that infrastructure upgrades be made so that we can complete with regional shopping center. We’ve been advocating for 3 years for the city to address these issues, but have run up against a brick wall, the city council. We have identified 5 specific actions that the city can take to improve the downtown. The council has from time to time made positive comments regarding these actions (most recently Dan Wolk’s Enterprise article). But when it comes time for the council to take decisive action, it all comes to a screeching, fear inspired, halt. The council last year, after more than 10 years of talk, came really close to moving forward with developing 12,000 sq. ft. of new, contemporary retail space and 200 plus additional parking spaces. The project addressed two serious downtown constraints in one project. Then the council had a panic attack because they were coming too close to actually taking decisive action. Some say,the project was in the wrong place. Fine, then build it elsewhere, but just build it instead of talking about. Well, we’re not going to build it at all now because the RDA is being dissolved next week. We’ve had these incredible RDA resources available for years but are now losing them because of incessant dithering.
The DDBA has proposed a number of other smaller actions that the city can take to spur downtown private sector improvements, but they all disappear in the council morass of indecision and inaction.
Of course the council is still pursuing the Olive Drive hotel/conference project. But is that a TOT enhancement project, or a downtown improvement project? Mark, does it address the issues you have raised?
PS: Mark, your Mace operation would have been a fantastic downtown amenity. What a missed opportunity. I take it the economics didn’t work out downtown? Or perhaps there was no suitable site available downtown?
DT Businessman (aka Michael Bisch, Davis Commercial Properties, DDBA Co-Prez, slightly less irate this morning)
Here is an interactive zoning map for Davis: [url]http://cityofdavis.org/gis/zoningatlas/[/url]
DT Businessman: [i]”Yet you blame it on the downtown merchants. Bizarre!”[/i]
Apparently I have not been clear on this. I do NOT blame the downtown business owners for the lack of vision and lack of redevelopment of the downtown. That is clearly a city and general plan deficiency. However, I do have a problem with downtown merchants joining in opposition of greater peripheral retail development. The downtown is clearly not capable of satisfying enough of our utility shopping needs, and so by the DDBA blocking peripheral retail projects like Target or say a Home Depot it causes residents great shopping inconvenience and causes tax revenue leakage to other adjacent cities.
[i]”We’ve had these incredible RDA resources available for years but are now losing them because of incessant dithering.”[/i]
Bingo.
Also, who voted for Brown as governor? Might it be some of the same ditherers and supporters of dithering? Statists and reactionaries seem to occupy more of the ruling class in our more “progressive” cities and this state.
I can’t find good city budget reports online for Woodland, but previoulsy I think I remember reading/hearing that Davis and Woodland have a reverse split of tax revenue source property tax versus sales tax. For example, Davis is something like 60% property tax and 40% sales tax, and Woodland is the opposite (60% sales tax, and 40% property tax). However, I cannot confirm this. Does anyone else have access to data to confirm or correct my memory on this?
Jeff, your mistaken. The Target project was before my time, but I’m quite certain that, rightly or wrongly, the DDBA board/executive supported the Target proposal, along with the Chamber. I know this because the DDBA is still being bashed for it’s support of Target. That support resulted in some serious divisions and significant upheavel, which has translated into a far more progressive DDBA seeking pro-active solutions to increasing the downtown’s competetive strength instead of relying on the no-growth policies some have advocated for. Unfortunately, the renewed DDBA has not been successful in getting the council to adopt and act on it’s positions. Peripheral growth although muted has still been occuring with little effective action being taken to strengthen the Downtown. Meanwhile, other competing communities are taking effective action. For instance, historic downtown Folsom has undergone a terrific transformation, including a really scary parking structure, which is more architecturally appealing than 80% of the buildings in our commercial core.
DT Businessman (aka Michael Bisch, Davis Commercial Properties, DDBA Co-Prez, becoming increasingly mollified)
I forgot to add to my previous post that the continuing peripheral development, coupled with relative inaction downtown, is accelerating the competitive imbalance. As I mentioned in a previous post, all the city planning documents call for the exact opposite. I strongly believe that if certain council members or community stakeholders disagree with the planning documents, then it is incumbent upon them to publicly make their case to change the planning documents, not undermine. How the heck is a plan suppose to remain effective if it’s undermined at every opportunity?
DT Businessman (aka Michael Bisch, Davis Commercial Properties, DDBA Co-Prez)
DDBA did not support the Target proposal. It was neutral. One DDBA board member conspicuously supported it. But the organization did not take an official position on it.
The Chamber initially supported Target, but due to blowback from some board members reversed course and adopted a neutral position as well.
[i]by the DDBA blocking peripheral retail projects like Target or say a Home Depot it causes residents great shopping inconvenience [/i]
DDBA doesn’t block such projects. What you all are arguing with is the General Plan and the store size limitations. Home Depot is welcome to propose a size-limited store in appropriately zoned sites in the city limits. Target could have proposed a store in either of the two moribund shopping centers in Davis and it wouldn’t even have required city council approval. Just because the largest retailers prefer to build 150,000 square foot stores doesn’t mean every city has to roll over and allow it. Stores that big, and their 19 acre parking lots, have significant impact on the traffic, shopping, and development patterns of communities.
Mark: [i]”Apparently, Target does not wish to be a landlord and they currently have no incentive to sell at a price below their asking.”[/i]
From the 2006 development agreement:
Developer, or its successors in interest for the Retail Building A and Retail Pad Building
B shall make good faith efforts to initiate construction of the building shell of the Retail
Building A and Retail Building B concurrent with the construction of the Target Store.
The Developer, or its successors in interest for the Retail Building A and Retail Building
B shall submit full and complete building permit applications for the building shell
(interior tenant improvements shall not required as part of this application) for the Retail
Building A and Retail Building B no later than two years after the Effective Date of this
Development Agreement.
Fascinating and illuminating discussion. I tend to agree w DT Businessman’s observation that the city/city council has a tendency to “dither”…
[i]”Whether it’s the Old North Davis Neighborhood Association, the save the bungalow types, some (but not all) of the bicycle advocates, the downtown is stuck in the ’80s.”[/i]
I cannot think of any commercial development proposal in the downtown which was rejected or even greatly modified in the name of ‘saving a bungalow.’
If you are thinking of Maria Ogrydziak’s B Street proposal to tear down the existing bungalow and build a contemporary concrete condominium in its place, [i]no one every objected to losing the small house on Maria’s property[/i] (adjacent on the south side of the corner Ogrydziak home and architectural office).
It is worth noting that in order to make such conversions easier, the City Council passed its 3rd & B Visioning Process. Yet Mrs. Ogrydziak, who was one of the prime movers to institute the Visioning Process, decided that the new design guidelines adopted in the Process should not apply to her. So she drew up plans for a large ugly building which in its core and spirit violated the new guidelines and, had it been built, would have harmed the integrity of the existing merit and landmark resources next to her project. That is why she was turned down by the HRMC, by Planning and by the City Council. Her rejection was just the opposite of what happened at 311-315 B Street, where the proponents met the new design guidelines and were approved.
There have been many other bungalow rehab and renovation projects you might also be thinking of in that part of town. Every one has moved smoothly through the process without any trouble. However, because the City has failed in its obligation to complete its legally required historical survey of properties in the traditional neighborhoods, some proponents have had delays and extra expenses to get approvals. That could be solved mostly by putting some money which is now going into other City funds and instead put a bit in the existing but empty Historic Fund.
[i]”Jeff, your mistaken. The Target project was before my time, but I’m quite certain that, rightly or wrongly, the DDBA board/executive supported the Target proposal, along with the Chamber. I know this because the DDBA is still being bashed for it’s support of Target.”[/i]
Thanks for the correction David. I must be confusing all the present anti-Target rantings from downtown merchants with the past position of the DDBA.
I think it is safe to say the DDBA would not support a Target today, nor would they support a Home Depot.
[i]”Just because the largest retailers prefer to build 150,000 square foot stores doesn’t mean every city has to roll over and allow it. Stores that big, and their 19 acre parking lots, have significant impact on the traffic, shopping, and development patterns of communities.”[/i]
You of course know that this limitation of store size eliminates many national chains since their business model does not fit.
I’m curious, does anyone know of another city matching, or even coming close, to their retail vision for Davis?
Don continues to point out how fewer downtown retail businesses exist in other cities as evidence of the evils of peripheral retail development. However, I’m not sure how to quantify the difference as benefiting Davis. It seems to me that our extreme measures (compared to other cities) to protect our dowtown “funky charm” has a substancial cost, including:
– Fewer products;
– Less choice;
– Parking problems;
– Higher prices;
– Less convenience;
– Lower retail tax revenue;
– Tax revenue leakage.
The benefits include:
– A funky and somewhat shabby downtown that is vibrant with activity;
– Downtown merchants protected from the same competition that merchants in other cities face.
I’m all for maintaining a vibrant downtown, but there are plenty of ways we can do it without so much competition risk-aversion and so many costs to citizens.
[i]You of course know that this limitation of store size eliminates many national chains since their business model does not fit.[/i]
So cities should just roll over and accept whatever store size the national chains want? Most national chains have built smaller stores in the past. Some are building them now. Some are recognizing that smaller store sizes can give them a competitive advantage.
[i]I think it is safe to say the DDBA would not support a Target today, nor would they support a Home Depot.[/i]
You seem to misunderstand the DDBA. It is essentially a tax agency. As such, it cannot take political positions, didn’t take a position on Target, and won’t take a position on any other project. If you own property or a business in the DDBA assessment district, you pay the assessment. You can’t opt out. If your property or business is not in the district, you can’t join. It is not a membership organization. It is a business improvement district (BID) which self-assesses on a mandatory basis. Fees are collected by the city. If you don’t pay them, you will be sued, have a lien, or something. DDBA is not a political organization.
The fact is, some people will go out of town to shop. Others will come in to Davis to shop. No city can provide everything. I urge the city and the businesses to focus on drawing people to Davis, and not try to cater to every shopping preference. Funky is a draw. Good eateries are a draw. I get customers from Sacramento and the Bay Area because of my selection of fruit trees and, for example, bamboo. The Avid Reader is rapidly becoming the premier independent bookstore in the region. Work with what we’ve got. You aren’t ever going to make people like Jeff happy with the local retail options, and shouldn’t try to emulate the failed retail policies of nearby communities. They have advantages, we have advantages.
I live exactly equidistant between Vacaville and Davis, just outside of Dixon. I shop in all three communities. Davis has many advantages (there are a lot more high-quality restaurants in Davis than Vacaville, for example).
My prediction, for what it’s worth, is that in the next decade you will see more divergence between the warehouse stores and the big-box stores. More of the latter will become vacant. Some of those companies will discover the value of smaller footprint stores, as some are already doing. In fact, that is likely to be what saves the remaining traditional department stores. The Nut Tree retail center has better long-term prospects than the Factory Outlet stores.
If Davis wants to get more tax revenue, develop Nishi, look at infill sites for more boutique stores (the depot?), [i]deal with the parking problem,[/i] and consider some more flexible zoning within the city limits (2nd Street?). Get some movement on Second Street Crossing; after all, Target came here originally because city councilmembers actively recruited them. And make a task force to get the south, east, and west Davis neighborhood centers full and active again.
“I cannot think of any commercial development proposal in the downtown which was rejected or even greatly modified in the name of ‘saving a bungalow.”
Rich, there are a myriad of downtown, Davis restrictions and potential restrictions that can bring a redevelopment project to a screeching halt or so burden a project that is is simply not worth it for a developer to go throught the Davis “spanking machine”. A conditional use permit is required for any development exceeding 2 stories in height. Any structure built before 1945 potentially triggers a historical assessment. There are landmark trees that are protected. Any downtown development project is fraught with flip flopping political peril. This Davis “spanking machine” discourages many developers from considering downtown at all. And this set of circumstances is a big reason why the downtown has not densified as was planned in the General Plan and the Core Area Specific Plan.
Furthermore, one doesn’t have to actually “reject” a project to kill it. Weighing a project down with sufficient number and types of goofy conditions and uncertainty will kill it. How many potential developers have looked at an older downtown structure, heard how much pain Grace Chen, Chuck Roe, Mark Friedman have gone through, and said, “life is simply too short to go through that kind of pain”? I can guarantee you it’s a large number. This is no way to lead a community.
DT Businessman (aka Michael Bisch, Davis Commercial Properties, DDBA Co-Prez)
Don for Council! Oh shoot, he lives somewhere outside of Dixon.
One correction, Don. The DDBA is a 501c(4)and can engage in unlimited political advocacy, although it has refrained in doing so to date. However, it has become abundantly clear that the goals specified for the downtown in the General Plan, the Core Area Specific Plan, and the Downtown and Traditional Neighborhood Design Guidelines are being thwarted by political opposition from those who apparently consider these planning documents to be meaningless. Perhaps the DDBA will reconsider its restraint.
DT Businessman (aka Michael Bisch, Davis Commercial Properties, DDBA Co-Prez)
Although there’s nothing prohibiting the DDBA from advocating politically as far as its tax status, articles, or bylaws, I’m wondering now whether there’s a prohibition contained in the state law that allows for business improvement districts. I’ll have to investigate the matter further.
DT Businessman (aka Michael Bisch, Davis Commercial Properties, DDBA Co-Prez)
Interesting. We were specifically informed, during the campaign about Second Street Crossing, that DDBA could not take a political position. I thought it was a 501c(3).
If it were to take political positions, and use members assessments to promote those in any way, it seems to me that would call into question the mandatory nature of those assessments. 501c(4) organizations cannot make advocacy their primary purpose. So you would be treading a fine line, IMO.
I’m curious, does anyone know of another city matching, or even coming close, to their retail vision for Davis?
Or, is every other city just not as smart as us?
I don’t understand your question.
Jeff, there’s nothing unique about the Davis General Plan retail element. Most of the communities that I lived in Europe followed the model of a commercial core supported by neighborhood retail. Those communities are compact and surrounded by farmland and/or woodlands.
DT Businessman (aka Michael Bisch, Davis Commercial Properties, DDBA Co-Prez)
Interesting sales tax comparisons on the north coast: [url]http://www.times-standard.com/localnews/ci_17605607[/url]
Arcata strictly limits store size and had debated limiting chain stores. Eureka has taken the more traditional approach.
[i]”there’s nothing unique about the Davis General Plan retail element. Most of the communities that I lived in Europe followed the model of a commercial core supported by neighborhood retail. Those communities are compact and surrounded by farmland and/or woodlands.”[/i]
DT, Don’t you think that is a bit absurd to say there is nothing unique and then point to European cities as examples? I think we are fools to think we can keep a viable city economy using this model. So, you are telling me there are no American cities we can look to as examples?
Many on the blog are quick to point out all the negative examples, but I have yet to hear of any US city we should model in terms of a general plan and vision for business and retail development. I find that a bit alarming… that we are so egotistical to think we know better than everyone else in this country for what works. A Toad Tunnel is immaterial and funny, but the health of our local economic design is a serious issue that should demand some precedence be established.
I have routinely compared Davis to nearby, similar-size cities with respect to the number and types of businesses each has downtown. Davis has a healthier downtown than Vacaville, Woodland, and Folsom. Certainly than Dixon, but there is too big a population disparity for that to be meaningful.
I think Davis would do better to go the Arcata model than the Eureka model, from the link I posted above. But I haven’t looked in depth at those cities, and I haven’t been to either of them in over a decade. Quick impression: Eureka is more like Woodland, Arcata is more like Davis. And it is likely that, as with Woodland, there is overlap among the consumers. But I don’t know those local economies.
[i]that we are so egotistical to think we know better than everyone else in this country for what works.[/i]
I don’t know, Jeff, you seem prepared to assert that other cities know better than Davis “what works.” You cite Folsom, for example. By some measures, other communities probably do “better.” Do those cities reflect their community’s values? I don’t think most cities have the level of public participation in the planning process that you get in Davis, Arcata, or — using another, less comparable example — Austin TX. Or Homer Alaska.
[quote]”And let’s be clear about Don’s General Plan comments. They are absolutely accurate. [b][i]A vibrant downtown supported by vibrant neighborhood shopping center(s).[/i][/b]”
“So the owner of prime retail peripheral property is intentionally restricting its development. A property owner in South Davis is intentionally keeping rents high and property vacant. A property owner in West Davis kept his shopping center vacant for years.
I don’t think the problem is the city.”[/quote]Is it possible that the long-held Davis ideal no longer can be achieved, and we should spend time looking at what might work in the future? Both the vibrant downtown and vibrant neighborhood centers are being overtaken by internet shopping as well as Woodland, Vacaville and Dixon shopping opportunities.
People used to head to Davis Radio Shack for electronics of all sorts; now RS provides batteries, exotic wiring and connectors and other items for which we don’t want to wait two business days to receive from some on-line operation.
We used to buy appliances at Davis Sears, now at Woodland Sears (which might be being closed by Sears along with hundreds of other similar stores). Does that have anything to do with Davis commercial landlords and their rents? We have lots of vacant commercial space (as businesses move out for non-rent-related reasons. But, we’ll end up going somewhere else to buy appliances–should it be 10 miles away or on the outskirts of Davis?
Maybe times are changin’ and we need to look beyond our long-standing vision of what provides ideal living for Davis residents.
[quote]”Just because the largest retailers prefer to build 150,000 square foot stores doesn’t mean every city has to roll over and allow it. Stores that big, and their 19 acre parking lots, have significant impact on the traffic, shopping, and development patterns of communities.”[/quote]Don, you’re correct, but please apply your observations to Target. What significant impact has Target had on these factors? And, how much sales tax are they already bringing to Davis and how does it compare to Auto Row businesses?
Your observation also made me wonder about how the same factors (in Davis) have been affected by Costco moving in to Woodland. It’s not as though a decision that’s completely out of our hands doesn’t result in traffic, shopping and development patterns in and near Davis.
Do we really gain what we think we’re getting by not rolling over for businesses that would improve our own shopping and taxing opportunities? So, now I can buy underware here; will I someday be able to get appliances?
As long as UCD never closes and Davis never returns to a dry town, downtown will always stay “vibrant.” This is a small town with a huge university, so comparisons to Woodland, Dixon and Folsom are poor. Maybe San Luis Obispo might work, and I the last time I was there the downtown was vibrant.
We need to grow and diversify, but be smart about it. Both zero growth and growth just for the sake of revenue are not smart.
In my opinion we can bring in some larger retailers where competition might be at a minimum. Maybe a Best Buy, or REI. Something that would keep the student’s dollars here.
Agreed Preston, and if looking for student dollars, how about an Apple Store, an Urban Outfitters, DSW shoes,
K&M ….to name a few which, while smaller, might round out your list while not competing directly with the locals?