The MarkeTech Group and Davis Diamonds Gymnastics have proposed to jointly purchase and develop parcels located on Chiles Road, formerly occupied by a Ford auto dealership that has since vacated and taken tax revenue with it.According to the city staff, these parcels are located in the Auto-Center zoning and the proposed uses require a Conditional Use Permit.
City staff recommended that the planning commission deny the project, based primarily on the project’s inconsistency with the economic development goals. By a vote of 5-1-1, the planning commission agreed and denied the project.
According to the staff report, “The majority of the Planning Commission felt that there was a decision to put an auto center in place, and there are significant economic factors to consider regarding non-auto uses in the A-C district.”
Staff also reports that since December, staff “has encouraged the applicants, particularly Davis Diamonds Gymnastics, to continue to pursue discussions of the Davis Indoor Sports Center (DISC) site and consider vacant build-to-suit sites which would provide more options for relocation and the ability to construct a new building that would suit their needs.”
The problem, from the city’s perspective, is clearly tax revenue.
Staff adds, “Revenue to the city from these uses would be limited to property taxes, which the city collects even if vacant. The most similar sales tax generating category for the proposed use (assuming sales of t-shirts, gym wear and the like from Davis Diamonds) would be “Sporting Goods”, which includes bicycle shops and sporting goods stores. Annual sales tax generated by this category from March 2010 to March 2011 was $137,661 for all such uses in the city combined.”
On the other hand, the sales tax generated from new auto sales during the same period totaled $1,140,273. Of this amount, $865,563 was generated from purchases made in Davis.
“While the site is currently vacant, it does present an opportunity site for auto dealerships and related uses in an environment where we are seeing remodel and expansion of dealers in Davis. The new Volkswagen dealership and recent application to remodel and significantly expand the Toyota dealership are representative of this trend. Removing this site from the inventory would present an opportunity cost to the City and would physically bifurcate the Auto Center by further removing La Mesa RV from other auto uses,” the staff surmises.
But these arguments run up against a large group of people within the community that currently utilize Davis Diamonds, and who argue that the vacant car dealership has no other prospective tenants.
For years, people have been calling on the city to diversify its sales tax portfolio for exactly this reason – as it forces the city, that claims to uphold climate change and carbon neutrality as primary values, to contradictory policies which hold open vacant parcels in the hopes that somehow one day a new auto dealership will open its doors.
There is strong community support for keeping Davis Diamonds in town.
In a letter to the Enterprise, Karen Waggoner argues, “Davis Diamonds provides valued extracurricular activities to our community. The myriad sports and activities offered to our children is one of the components that make Davis a desirable place to live.”
“In dollars and cents, Davis’ desirable characteristics correspond to what keeps Davis real estate prices stable,” she continues. “If property values go down, property tax revenue will go down and people will be less likely to vote for bond improvement measures which fund city improvements.”
She also notes, “City Council members believe it is important to keep Davis Diamonds in town and that another space can be found. A three-year search has not yielded any other feasible, affordable options.”
Mary Ann Robinson wrote a letter and argued, “The conditional use permit would have allowed Davis Diamonds to move into a former car dealership – a property that has been vacant for several years – and expand its services to the community’s children and families. Instead, the decision was made to save this location for an auto dealer because of the tax revenue this type of business could generate.”
“The main reason we chose to move to Davis almost four years ago was its kid-friendly environment. In fact, a recent letter described it as ‘kid heaven.’ The presence of businesses like Davis Diamonds is an important reason that we can describe our town in this way,” she continued.
“Davis Diamonds provides a valuable service to our community,” she wrote. “It is a safe, fun place for children and adolescents to exercise, learn new skills, and socialize with each other. Talk to almost any school-aged child in Davis and chances are they have taken a class, participated in a camp or attended a birthday party at Davis Diamonds.”
The questions, therefore, seem to be: How likely is it that another auto dealership could move into that parcel in the near future? Should the city, given its focus on carbon reduction, be basing its sales tax revenue on car sales? And three, is there another location that Davis Diamonds could move into?
I have spoken to people on both sides of this issue and I think both sides make compelling points. Certainly I have been concerned with the loss of sales tax revenue. On the other hand, I am concerned that the city lacks a more comprehensive economic development strategy at this point and I believe that more auto dealerships are not the wave of the future.
Moreover, realistically we may expect $100,000 to $200,000 in revenue at this location from the auto dealership. While not chump change, it is also not a game changer either. The city is looking at somewhere in the area of $7 million in additional costs for pensions, retiree health, and infrastructure over the next three years.
An auto dealership does not even make a dent in that problem, there is not clear an auto dealership ready to move in, and Davis Diamonds may be on the way out unless something else can be found quickly.
Based on all of that, I tend to side with a stable location for Davis Diamonds. We will see what the council decides.
—David M. Greenwald reporting
If there’s no auto dealership ready to move in, the Davis CC should allow the owners to offer it to the Diamonds. Any argument against that would probably look silly.
How long has this site been vacant, generating zero sales tax?
Why did city council, at the same time this building earmarked “for selling autos only” by the council was vacant, cut the sweetheart million-dollar loan deal with Hanlees?
Are we serious that $865,563 in sales taxes is what drives this whole longtime Auto Row city planning and associated RDA blight-fighting tax expenditures? This can’t be accurate, can it? We must be bringing in much, much more to justify the frantic chase to bring more auto sales to Davis, a business that has a questionable future under its current sales model.
I see two issues here: 1) Is the city willing to work with Diamonds to find them a suitable/reasonably priced/nicely situated location other than on auto-row? 2) If Diamonds is allowed on auto-row in Davis, it is just a matter of time before other smaller businesses will encroach and end any possibility of developing auto-row as a desirable destination for car purchasers. It would seem to me that auto-row in Davis is a rather out of the way and inconvenient location for a business like Diamonds…
Empty buildings do not bring in sales tax dollars and wishful thinking does not create jobs. This should be an easy decision.
E Roberts Musser [i]It would seem to me that auto-row in Davis is a rather out of the way and inconvenient location for a business like Diamonds… [/i]
Since part of their future plans include hosting regional competitions, a location near the freeway makes good sense.
I agree with Elaine.
If the city wants to hold on to the hope of another auto dealer cash cow, the city should help secure a suitable alternative for DD maybe including permitting discounts.
[i]”Should the city, given its focus on carbon reduction, be basing its sales tax revenue on car sales?”[/i]
Oh no… I didn’t know car dealers had become politically incorrect too!
Might these type of sentiments have some impact on a car dealers’ interest to locate in Davis?
It seems Kermit was correct… it is not easy being green.
Jeff: [i]”If the city wants to hold on to the hope of another auto dealer cash cow…”[/i]
How many years does a barn have to be empty before we recognize that the cow has left?
“Should the city, given its focus on carbon reduction, be basing its sales tax revenue on car sales?”
“Oh no… I didn’t know car dealers had become politically incorrect too!”
Come on Jeff, none of these environmental whackos own cars. wink…wink
Everyone knows that all good Davis greenies buy their cars elsewhere.
[i]”How many years does a barn have to be empty before we recognize that the cow has left?”[/i]
Mark, good point. I’m not any expert on the market determination for dealer location. I would think there is viability in this area given the existance of other car dealers (still in business). However, we have become a bit saturated in car dealerships going West on I-80. Dixon has a few. They there are several before during and after you get to Vacaville. However, it does seem that Davis has some advantage given that West Sacramento until Carmichael is alread built up and lacks car dealerships off the freeway.
I think a big question is what is Davis doing to romance dealers to these vacant properties? Are we just sitting around waiting for someone to get how wonderful we are and plead with us to let them open a dealership?
Rusty, I suppose we could only allow dealers selling battery-powered cars and hybrids… however, most of these have to be subsidized by the government and even then are too expensive for most people to own.
My problem is that they don’t have enough power to pull my gas-powered toys!
It would be cool though to do a green-only dealership in Davis. I had talked to someone else that had this same idea and had actually looked into it, but the dealer agreements are too restrictive and won’t allow it. It would take a dealer with a track record and connections to negotiate a new type of multi-make dealership only selling specific models.
Rusty: so that I’m clear, your position is obviously that if one produces any waste or uses any resources, they cannot advocate any laws that reduce pollution – correct?
I take it back… [url]http://www.greencarsofaustin.com/[/url]
If someone can do it in Texas, then Davis should be a slam-dunk.
Would that make us all warm and fuzzy inside having a green-only car dealer?
Aw shucks… I just noted that these are pre-owned green vehicles.
I still can’t find an example of a multi-make NEW car dealer that only sells battery and hybrid-powered cars.
I haven’t been following this issue too closely, but what’s the problem with the vacant Davis Indoor Sports Center as a new home to the DDs? Rent too high?
How about the building that Explorit built and then vacated. I wonder if that could be a good place for the Diamonds…
Crilly,
That building is the Davis Indoor Sports Center (DISC). When the skating center fell on hard times, Explorit leased the south end for their expanded exhibit and classroom functions. Alas, they couldn’t afford even that portion of the building. The skating rink part (the larger component of the structure) was occupied by the Yolo County library (Davis public library) while the major remodel was done at the 14th St. site. Now it’s all vacant. I’m guessing the rent is too high for DDs, but although it’s a whole lot larger than they need, as a former recreational facility, I assume it has much of what the DDs need such as changing rooms, perhaps showers, etc.
Davis Diamonds have said DISC is too expensive according to the article in the Enterprise this past weekend. I don’t know but think it may be worth trying to get a car dealer but it needs action as said earlier, not just “sitting around” hoping for it. But I really wonder if Davis Diamonds is going to need a bigger facility if they move to Dixon.
I tend to agree with Elaine. Like it or not auto sales generate sales taxes and Davis needs more revenue.
My son has been to Davis Diamonds–excellent facility and staff. But I find it hard to believe they are going to move elsewhere. Who would be willing to drive their kids to Dixon? Especially if the name is “Dixon Diamonds.” This seems more like a bargaining ploy to me. I don’t see enough demand elsewhere–unless they move to Roseville/Rocklin, in which case I suspect many staff would defect. Is there a real threat of Davis Diamonds going out of business?
I also think there is merit in different areas with different land uses. Personally I would not like to haul my son to a facility next to a car dealership.
Vote went down 3-2 to allow Diamonds to move into old Ford dealership building even tho Mayor Krovoza and Councilmember Swanson wanted Diamonds to work with staff to find a much better solution for Diamonds than moving into an old dilapidated building at a lousy location. IMO Diamonds lost out on a golden opportunity…