By Lee Bartholomew
The possibility of the property’s re-emergence as a business park is on my mind. Aside from the obviously bad business practice associated with a change of heart in respect to this property, I wonder at the economics of such a venture. First, as to data collection; have you, or has staff, seen any demand or feasibility studies for larger business parks in the region? Any meaningful absorption forecast?
It would seem as though these questions need some study prior to a sea change for the property. A change to spec development, in my view, reflects a major policy decision about the nature of land use in Davis.
In my work, I see a substantive difference between “Business Park”, or “Industrial Park” and a concept best called “Science Park”. By their user profile, business or industrial parks are often unrelated users (owners or tenants), not necessarily compatible or similar, who do not need connectivity to operate.
The proposed Metro Air Park adjacent the airport is a perfect example. As posited, that development group would accept any legally permissible use, whether related or unrelated to contiguous users.
A Science park (university research park, science and technology park), on the other hand, use shared resources, including incubators, programs and collaborative services, a shared labor pool, community linkages, etc.
The question of size, or scale, is important, I think. Business park developers like scale because of the economies that are associated with size. If the council wishes to build a business or industrial park, the long term benefits to the city will be marginal. These parks draw low wage users, include lots of
cheap “flex” type product (Buzz Oates can still tilt a single story building for $25 to $40 PSF), are often subject to short duration tenancies and high frictional vacancies, and demand is based entirely on property/market economics.
Better said, such a scaled project in Davis, in my view, would not add much value other than the impact fees and maybe marginally in respect to jobs. Picture the Woodland, Southport, etc. industrial parks. This is NOT in the best interest of Davis, in light of the social cost with the Mace property.
The idea of a science park is far different.
The purpose of science parks is as an incubator designed to capture industry associated with university innovation. Incubator buildings are usually tailored to specialty uses, far different than “flex” realty. Such an incubator would require a partnership with the university, and the results would, I think, better match the aspirations of the citizenry.
Here, I envision something akin to the Progress Park near Gainesville, Fl. This is, all told, a science park, driven by the Sid Martin Biotech Incubator, along with other UF facilities. The total usable space is 142 acres, of which 82 have been absorbed in a 28 year period. This reflects an absorption rate of 2.93 acres per year.
Progress still has 60 available acres, being actively marketed, for specialized opportunities. It
seems evident to me that in Davis, a site of less than 100 acres, and perhaps in “nodes” as small as 20 or 40 acres would produce great advantage in the development process. The Mace concept is not appropriate, given these data.
I believe the correct path for tech/incubator/science real estate in Davis should be developed in partnership with the university, and perhaps best directed to a site on existing UC property, or on property contiguous to campus.
Alternatively, nodes with connectivity could be very exciting. The Mace property has significant economic and property related hurdles, not least of which is a requirement for Measure J vote and the establishment of backbone infrastructure.
I think you will not hear the end of it if you violate, twice, the public trust around this property, particularly absent a delineated vision that is supported by great factual evidence.
Do the study, do the sales job, and do it on another parcel that isn’t laden with the agreements that exist on the Mace property. Most important, please do not confuse the benefits of a university related tech center with the far different outcomes associated with a generic flex/business park model.
Lee Bartholomew is the senior appraiser at Bartholomew Associates, Inc. He is a Certified General Real Estate Appraiser. He has a background in finance, and has been appraising all property types since 1985.
Good article Lee. The perspective of your expertise is particularly appreciated.
On Friday medwoman posted that “Context, like beauty is in the eye of the beholder.” The context of an appraiser is in the here and now . . . the present. That is as it should be. The context of a city planner should be no less than 10 years and more often 25 years. The context of an economic development professional can often be 50 years and more.
With that said, it is worth mentioning that in the national ranking of research universities The University of Florida ranks 55th. Not exactly a major technology transfer engine . . . which is reflected in the information you shared about Progress Park near Gainesville.
Excellent article. Lee is describing … Nishi?
Per the UCDavis Office of Research, UCD is ranked…
[quote]32nd among the nation’s research universities and 46th among the world’s research universities (2012 Academic Ranking of World Universities by the Center for World-Class Universities of Shanghai Jiao Tong University).[/quote]
The Center for Measuring University Performance has UCD ranked at 38th in their 2011 ranking of top research universities.
I am not convinced that this increase in ranking would necessarily translate to a much different experience than the University of Florida has had.
“Do the study, do the sales job, “
Yes, that would also give an indication of how big an area is appropriate.
“perhaps best directed to a site on existing UC property,”
Perhaps not, after the US Bank protests I’m not sure that businesses want to be that close to the University. Could you imagine a Monsanto facility on the UCD campus?
good point, only non-controversial companies near the campus.
Lee bartholomew said . . .
“I believe the correct path for tech/incubator/science real estate in Davis should be developed in partnership with the university, and [b]perhaps best directed to a site on existing UC property[/b].”
Thank you Toad for pointing out that statement. I missed that one.
Lee, help us understand how locating the tech/incubator/science facility on UC property would help the City of Davis? It wouldn’t generate any taxes for the City. It would generate additional traffic. It would further degrade the jobs/housing balance in the City. Help us understand your logic.
Lee Bartholomew said [quote]I believe the correct path for tech/incubator/science real estate in Davis should be developed in partnership with the university, and perhaps best directed to a site on existing UC property, [u]or on property contiguous to campus[/u].[/quote]
Not sure why two respondents here chose to omit the last part of the sentence.
That’s easy Don . . . because it made for a much more interesting question . . . especially for one who is trained in the appraising arts.
Matt
[quote]It would generate additional traffic. It would further degrade the jobs/housing balance in the City. Help us understand your logic. [/quote]
And Mace 391 wouldn’t generate more traffic and further degrade the jobs/housing balance? Matt you’re so transparent.
No GI, an East Innovation Park would not degrade the jobs/housing balance the way that a tech/incubator/science on existing UC property would. In the East Innovation Park scenario there would be an addition of a substantial number of Jobs to the City, while in the on existing UC property scenario there would be no addition of jobs to the City.
Mathematically, if each incremental 2.8 tech/incubator/science jobs added produced an incremental demand in the City for 1 housing unit, the jobs/housing balance ratio for the East IInnovation Park scenario would be 2.8/1 and the on existing UC property jobs/housing balance ratio would be 0/1.
GI, I hope I am 100% transparent. I work very hard to be that way. That is why I post here using my own name. I hold myself accountable for what I say, and the analyses I share.
8>)
Lee Barholomew said . . .
[i]”Here, I envision something akin to the Progress Park near Gainesville, Fl. This is, all told, a science park, driven by the Sid Martin Biotech Incubator, along with other UF facilities. The total usable space is 142 acres, of which 82 have been absorbed in a 28 year period. This reflects an absorption rate of 2.93 acres per year.”[/i]
Now that a fine, and very active weekend has come to an end which Included a very enjoyable viewing of the Philadelphia Eagles thumping the Washington Redskins, I’ve had a chance to reread Lee’s article this morning and go to the Sid Martin Biotech Incubator website. The 82 acres that have been absorbed in the 28 year period include a total of 9 companies. That calculates out to 9 acres per company and one new company every three years.
Compare those numbers to the technology company census for Davis that Meg Arnold, Executive Director of SARTA shared with all of us.
9 tech transfer companies vs 59 tech transfer companies. Looks like UCD is doing something right.
[IMG]http://i1104.photobucket.com/albums/h321/mwill47/SARTA-SactoRegionTechbyCity_zps57581b24.jpg[/IMG][/URL]
[IMG]http://i1104.photobucket.com/albums/h321/mwill47/SARTA-DavisTechCompaniesbySector_zps2d93932c.jpg[/IMG][/URL]
As to the “context” of my letter, of course (good) analysts see the world in terms other than the present. My intent was to get the council focused on the larger philosophical issues of space planning and land use. My point was this: Science centers can be successful on smaller than ~300 acre sites. AND, there was discussion in this series about UF, which I used as illustrative. According to their own data:
UF ranked #1 Public University for transferring research discoveries to the marketplace
UF ranked #3 in “Top Public Research Universities”
UF ranks 7th among all (public and private) universities in the number of awarded patents
UF ranks 4th among all (public and private) universities in the number of startups launched
Gainesville has the highest number of incubators per capita of any US city
UF ranks 15th in research and development expenditures in the US…
Lee Bartholomew