By Rob White
SPECIAL COMMENTARY: Like the Dickens novel about two cities that needed to heed warnings about their future based on their past, yesterday’s news about Bayer CropScience/AgraQuest moving to West Sacramento made many of us stop and think. This is one of Davis’ most celebrated technology startup success stories, and now they are moving… primarily, they couldn’t find an appropriate place in Davis, and this informs us of some of the outcomes from our collective decisions.
And they will also be consolidating the Nunhems unit there. As most of you know, Bayer CropScience acquired local startup company AgraQuest, Inc. in mid-2012. They had previously moved the vegetable seed company Nunhems to Davis in early 2009. According to a press release distributed Thursday by the parent company Bayer AG on PRWEB, the company would execute the move in Q1 2014.
According to a source at Bayer, that’s about 140 existing jobs in Davis that will be relocated to West Sacramento. We do not yet know how many people live in Davis and will be commuting across the causeway, and this type of information is sometimes difficult to acquire. Typical hiring patterns let us make educated guesses and the number is likely about 25% of the employees, though Bayer and Nunhems could be different due to the specialized nature of the work they conduct.
The upside for the company regarding the facilities is impressive, moving from a set of distributed facilities across Davis totaling about 75,000 square feet, to an existing single facility of over 160,000 square feet on 10 acres. The facility reportedly has much of the tenant improvements needed and will require minimal investment from Bayer to meet their current needs. But there is room for growth and installation of a pilot plant for further research and development. Included in the transaction is an additional 10 acre site in West Sacramento that will be used for research crops and greenhouses.
Some Davis officials have been involved in working with Bayer as part of the process of determining opportunities for relocation and expansion. We provided representatives from Bayer CropScience, their commercial brokers, and other economic development organizations with information on several build-to-suit opportunities in Davis. But ultimately, the unique opportunity to acquire an existing building with office and wet lab space proved to be the best option for Bayer CropScience.
Davis representatives were informed of an impending choice about a week ago, but didn’t know when the decision would be made or released. And as with many economic development deals, the discussions and details are considered confidential until the company decides to release information. We do this to comply with a company’s wishes, but it does create artificial competition amongst jurisdictions as we each try to convince a company to locate (or stay) in our community.
Mayor Joe Krovoza took a very positive view on the announcement by stating “Davis is pleased Bayer CropSciences will continue to call Yolo County its home and tap our many assets. Our region possesses a unique business development culture where research firms can begin in Davis close to our university talent, flourish adjacent to campus, and then move to larger quarters in Davis or nearby – thus staying close to benefit their employees and company research needs. The Bayer units consolidating in West Sacramento continues this pattern that leads to success for the Sacramento region.”
Using the Mayor’s comments as a catalyst, Davis officials will continue to work on addressing the shortage of available facilities with comparable research and development space. As you know from previous articles, we have been working with several of our rapidly growing technology companies to identify opportunities for move up facilities. These spaces are in high demand in our market. And excitingly, Davis staff have had several discussions with local developers about building additional commercial research space in Davis. The bad news is that even with some success in this area, we do not have many locations that can accommodate facilities over 100,000 square feet.
It was interesting that several of the articles released yesterday quoted Johan Peleman, Bayer’s Head of Vegetable Seeds R&D, saying “The new location offers top-notch equipment and allows for a stimulating exchange across disciplines. At the same time, we can further strengthen our bonds with the University of California at Davis, one of the world’s top plant science institutes.”
With a statement like that, we can consider that retaining the Bayer CropScience investment in our region and in Yolo County is a valuable asset as we work to strengthen our region, Yolo County and UC Davis as centers of Ag Innovation. Additionally, with the continuing growth of other Davis technology companies and startups, the move by Bayer CropScience to West Sacramento creates space for more growth opportunities in the near term as the city pursues options to increase available research and development inventory through executing on the community’s vision of creating innovation centers.
We can also see this relocation and expansion as yet another example of the increased investments happening in the region. Investments by global firms like Bayer AG, plans for initial public offering (IPO) for companies like Marrone Bio Innovations, and local investment in companies like Gold Standard Diagnostics. Steve Pinkerton puts it best when he says, “There is significant activity in Davis from small startups and mid-sized companies on the verge of accelerated growth. We are working at all levels – inside city hall, with the local business organizations, and with state and federal agencies – to take advantage of this growth and the potential that it presents. We want to make sure that there are many more successes stories for Davis, like that of Mori Seiki, and to increase the opportunities across the region.”
Some of you have undoubtedly also heard me make comments about building a pie factory. It’s the concept that if you fight over your ‘slice of the pie’, then we are using an analogy that creates negative competition and feedback loops. If we instead think about what each of us brings to the idea of building a pie factory, then each and every one of us has a role and we can make as much pie as we need (or want). This collaborative approach means we will not always get everything we want, when we want it… but we can direct ourselves towards an outcome that results in everyone getting more of what they want than if we had to compete for a limited resource base.
Therefore, it is my premise that Davis (as a community, a city and a university) have a responsibility to lead the region in creating new company starts, attracting large investments in technology and research and becoming the engine that provides the power to move us forward. Let’s not let past decisions throttle our creativity or become the default. Let’s instead use our past to inform our collective decisions, embracing opportunities that are consistent with our stated goals and that move us to a leadership position for the region (and maybe globally).
We need to address the lack of space for our creative individuals… space for tinkerer’s workshops, space for startups, space for growing companies and space for global company that want to invest millions of dollars and create hundreds of jobs. This last piece is what results in local philanthropy, in local wealth creation, and in greater corporate leadership in sustainability, quality of life, and economic vitality. It is these global companies that bring attention to our town and allow for us to attract even more investment to the system, resulting in increased financial support for our university, increased employment opportunities for our youth and better opportunities for our citizens to have the community amenities we all desire.
We have made some progress towards these outcomes, and city staff will be working with the city council, community and region over the coming months to move to the next phase in assessing and implementing a shared vision.
If you have thoughts on this subject, or ideas for subjects you would like me to write about, please let me know. My email is rwhite@cityofdavis.org.
Thanks Rob, once again for providing the community your perspective on this news…..one silver (maybe partly silver) lining is that the 75,000 ft already occupied by Bayer AgraQuest now can be available for other firms….
As you ended your article, you mentioned the progress which has been made. I encourage you in your posts, to itemize these, perhaps bulleted, to inform us of tangible gains in this area of economic development and innovation. Thanks….
Davis fails to reap what it sows.
[quote]And excitingly, Davis staff have had several discussions with local developers about building additional commercial research space in Davis.[/quote]
Where?
Rob writes:
> Bayer AgraQuest is moving to an existing single facility
> of over 160,000 square feet on 10 acres in West Sacramento.
I just found a Colliers industrial real estate report on the web that says the average industrial flex space in Davis is $9.60/sf/yr and West Sacramento is $7.20/sf/yr (33% less). If you do the math a company with that much space saving $2.40 on 160,000sf they would be saving $384,000 (“on average”) by moving to West Sacramento (I’m betting Bayer is getting an even better deal). The Bayer executives can still live in their $1 million homes in Lake Alhambra after the move (and only spend a little more time in their cars) but they will have much cheaper homes and apartments near their facility for lower paid workers. I don’t have an answer, but it is always harder for a college town like Davis with expensive housing and commercial space to keep firms as they grow (Palo Alto has the same problem in recent years)…
This really sucks. Those in this town blocking all reasonable land use proposals for economic development just cost the city big time. Ya’ll should be ashamed of yourself and hang your head.
For the rest of you that care about Davis having a sustainable business tax base and good jobs, start shouting down those that oppose everything.
My Davis company is growing too and we may have to move away for lack of available commercial real estate to support our growth.
Hey you change-averse, NIBMY, statists… does this news make you happy?
Con Agra is the ideal place for companies like this one, but the CC, and its residential developer friends and contributors are focused on converting Con Agra from its very good zoning over to residential. What a waste of a wonderful 100 acres of space for commercial, R and D, and business in general.
Frankly: why dont you start shouting down the 5 members of the CC who are driving the give-away of Con Agra to residential speculators?
I don’t know, Frankly. When Borders closed, it didn’t create a ‘void’. It created a vacancy, which was filled by another business. I don’t recall a great hue and cry about it; Whole Foods moved in.
This churns the spot AgraQuest is in, makes it available for another startup company. Davis will provide for the AgraQuests and Marrones and CalGenes, and if they need 150,000 square feet of cheaper space that is always available nearby. And always will be cheaper nearby.
The problem Mike, and I think you are responsible for it if you were on the council that drafted Measure J, is that it doesn’t need to be an either or situation with Conagra going residential and development for local growing businesses being supported on other land. By limiting space for development and the citizens vetoing every annexation with measure J/R you create the conflict, when, in reality, we need both more housing of many types and more development to support business growth.
I don’t think Agraquest is totally leaving Don, i could be wrong but as I read it they are only moving part of the business to West Sac as they need to expand. The loss is in our communities inability to provide them with the infrastructure they need to grow those high paying jobs here in Davis. But hey, at least we will still have those tomato harvester jobs on all that ag land we are preserving.
[i]”This churns the spot AgraQuest is in, makes it available for another startup company. Davis will provide for the AgraQuests and Marrones and CalGenes, and if they need 150,000 square feet of cheaper space that is always available nearby. And always will be cheaper nearby.”[/i]
Don, This comment easily identifies a statist mindset. It is as if you envision a situation of suspended animation where the only “churn” you support is reuse. You are basically advocating we remove “development” from economic development and just learn to live with our land as currently allocated.
You have said that you support expansion on land around the hospital. I wonder though if you really support that based on comments like this, because you don’t follow up with that recommendation.
There is no good reason that Davis did not retain AgraQuest’s business growth other than the lack of development options caused by a minority of those that put their NIMBY, statist, change-aversion fear mitigation above the needs of everyone else.
Since you know what my positions are on economic development, why would you misrepresent them? What purpose does it serve for you to distort my positions? And in what fantasy realm does my statement “identify a statist mindset?”
Your first two paragraphs are complete nonsensical garbage, following your usual pattern.
Your last paragraph ignores economic realities, among many other points. And you are apparently incapable of discussing this issue without your boilerplate crap about those with whom you disagree. It’s hopeless to try and discuss these issues with you.
What we have established over several years of discussion on the Vanguard is that the only thing that YOU believe represents economic development is the annexation and development of peripheral land. Anything else fails to meet your threshold of sufficiency.
For the benefit of others who might actually be interested in discussing this, instead of just spewing misguided denigration, here is what I posted on a June thread on this topic — just so you don’t actually think Frankly is accurately portraying my views:
Davis is not a suitable site for a business park geared toward large corporate entities. There is no ‘shovel-ready’ site for a big business park that doesn’t involve peripheral development. Nearby communities can provide that land at a much lower price. We should focus on smaller startups and expect them to move out (churn those sites) as they outgrow their startup locations. Peripheral development, in general, has undesirable costs and consequences and reflects poor urban planning. It should be a last resort, and should be guided by county-wide principles of planned urban density and protection of agricultural land, wildlife habitat, and open space.
Economic development can be encouraged by the city by allowing greater flexibility in zoning, annexing Nishi, and possibly retaining a portion of the Cannery site for business uses. Other sites that might be considered, but which would require a broader community discussion, include the land near the hospital and the Covell Village site. I expect the latter would require a very comprehensive public planning process.
The city should focus on near-term goals that are achievable. There is broad consensus on many policies. Unfortunately, it is always easier to annex land and build on it than it is to work with odder parcels already within the city limits. There is always pressure from adjacent landowners and land developers, ready to cut special deals. That takes the focus off of things we can do now within our existing borders.
[i]What we have established over several years of discussion on the Vanguard is that the only thing that YOU believe represents economic development is the annexation and development of peripheral land. Anything else fails to meet your threshold of sufficiency. [/i]
Well Don, what you have established over several years of discussion on the Vanguard is that you don’t support economic development unless it results in absolutely no peripheral development and zero annexation of any land. I would also add that the sum of your comments support my suspicion that you really don’t support much in the way of significant economic development in Davis at all.
The bottom line is that you fit nicely into the group of people in this town that are directly responsible for this tragic fiasco of losing a high value Davis business.
That was my point.
[quote]Well Don, what you have established over several years of discussion on the Vanguard is that you don’t support economic development unless it results in absolutely no peripheral development and zero annexation of any land.[/quote]
Amazing. I just disproved that, literally, in my post above your reply.
Why do you lie about things like this?
“Davis is not a suitable site for a business park geared toward large corporate entities.”
Why not? There is plenty of land the only thing we lack is willingness.
“Nearby communities can provide that land at a much lower price.”
Only because of pent up demand so a lack of availability causes high price which makes you argue non-competitive prices. Open up enough land and prices equilibrate. Of course the value added to the community from high paying jobs might be an additional incentive to provide the needed infrastructure that would displace some low paying ag jobs. I wonder how many jobs/acre or dollars/acre are generated by tomatoes compared to the same metrics for agriquest.
“Peripheral development, in general, has undesirable costs and consequences and reflects poor urban planning. It should be a last resort, and should be guided by county-wide principles of planned urban density and protection of agricultural land, wildlife habitat, and open space. “
This is a value judgement, and, by the way, I bet West Sac thinks we are chumps for letting them get away. Woodland would have bent over backwards to bring in these jobs look at what Woodland did to bring in Clark Pacific.
“The city should focus on near-term goals that are achievable.”
You mean like that recent land swap that got killed. Perhaps that would have provided the perfect spot for this ag-related seed company. The dogmatism of Davis just cost this community at least 140 jobs because we haven’t planned well.
One thing I agree with is Covell Village and Cannery should be master planned together. Of course, Measure J/R precludes that logical reality. So as Agriquest rides off into the sunrise the nimby’s sing happy days are here again and fire up the tomato harvester.