Analysis: RFEI Process Pays Off in the Form of Three Submittals

In April of this year, in hopes of bringing forth some ideas for innovation centers, the city’s Chief Innovation Officer Rob White approached the city council with the idea of putting out what he called a Request for Expressions of Interest.

Of course, nothing in Davis runs that smoothly and when his item came up in April, it came up for discussion near midnight and, while Councilmember Brett Lee was ready to push the idea forward, the rest of the council was not.

Rob White would write, “In response to the growing need for commercial and research, the City of Davis released a Request for Expressions of Interest (RFEI) for a Davis Innovation Center on Wednesday (May 21^st). This request for information is the culmination of several years of community discussion, evaluation and assessment to identify appropriate locations and attributes for meeting this need for space.”

He would explain, “The RFEI outlines in a more formal way the City Council and community views on the attributes that world-class research and development space would provide. It also makes clear that the Council is not just searching for peripheral innovation parks, but would also like to encourage reuse, revitalization and densification of the downtown and existing commercial centers. This whole-City approach is intended to encourage a robust set of solutions that creates diverse spaces in a range of sizes and attributes that will appeal to companies across the spectrum – from startup, to research, to rapid growth, to mature.”

He would add, “The RFEI is meant to bring the discussion of new commercial and research spaces to the same point as that of the current Downtown-University Gateway District (Nishi), where the City and its partners are working together to find solutions and define opportunities.”

But the process ultimately moved forward. By late May, Rob White reported on the Vanguard that, following the May 21, 2014, release of the RFEI, “I have had proponents for the East and West Innovation Park sites (detailed in the November 2012 Innovation Park Task Force reports) state that they are actively working on their submittals.”

“I have also had an early discussion with representatives with PG&E about what might potentially be done at their site (assuming terms could even be worked out),” Mr. White quickly added. “No matter what the outcome this process and resulting potential proposals by interested parties, the City staff are facilitating the discussion by working with the City Council and our other community and agency partners to develop opportunities for innovation businesses to stay and grow in Davis.”

While a PG&E site RFEI never materialized, the two primary targets – identified in the Innovation Park Task Force report – have come forward, along with a third proposal that no one was expecting.

Rob White explained to the Vanguard that an RFEI “is not a binding request for proposals, giving city latitude to make choices or do nothing.” The next steps are to go to council, talk about the submittals and see where the options are for the next steps.

We have already talked a lot about the Mace 200 proposal. The developers there are requesting – and the council by a 4-1 vote agreed to consider it at the next meeting – an expedited Measure R process. The city and developers should take heed the warning in the Vanguard comments.

From our perspective, an earlier Measure R process probably offers the city about the same protection as the current process. However, we know from the discussion in 2009, over the baseline Measure J project features of Wildhorse Ranch versus what is in the developer’s agreement, that expediting the Measure J process is a buyer-beware scenario.

It may give you an earlier indication of community support before you invest tens of millions into the process, but it might also create a situation where the public is skeptical that the project is not as well-defined and that promises are not obligations from the developer.

In other words, an expedited process may save time, money and resources, but undermine the public’s confidence in the applicant carrying out promises and the ability and willingness of the city to hold them to these promises.

One looks little further than the B-Street Visioning process that the community and neighbors agreed to and then the quick backtrack five years later at Mission Residence when the council unilaterally undermined and violated agreements on density and height limitations.

One of the interesting questions is which project is likely to go up first. Mace 200 has some advantages in that respect. We have been talking about that location for some time. Mace 200 is now completely surrounded by roads and conservation easements, making it less likely to immediately spawn housing growth.

The Northwest Quadrant has some interesting features, as well. The proposal is on land that is not the best farming soil in the area. It would hug the Sutter-Davis Hospital and Highway 113. The project applicants envision it as a potential center for med-tech and ag-tech. It has relatively close proximity to UC Davis and West Village.

The Vanguard met with Sotiris Kolokotronis and John Hodgson on Wednesday and one of the interesting points they made was the close proximity to, not just the Sacramento International Airport, but the underutilized Yolo County Airport – just three miles away and capable of supporting more air traffic as needed.

There had been rumors all along that this project would include a housing provision – but it does not and will not.

One project that is completely out of the blue was the David Morris proposal for Davis Ranch where he managed to convince the Tsakopoulos folks to donate to the city 200 acres for the business park east of the soccer fields, west of the causeway near Highway 80.

Rob White told the Vanguard that the submittal was “completely out of the blue.”

In a letter to Rob White, David Morris of Capitol Corridor Ventures wrote, “To help advance the City’s ongoing efforts to create an Innovation Center, Capitol Corridor Ventures (CCV) has approached the owner of the Davis Ranch property, the Tsakopoulos family, regarding whether or not they would entertain a donation of 200 acres to the City of Davis for the purposes of helping the City develop an Innovation Center on the property.”

In response, “The Tsakopoulos family has expressed an interest and willingness to donate 200 acres of the Davis Ranch as shall be mutually agreed to the City and evidenced by the attached letter. The proceeds from the donation shall be placed in an endowment for the benefit of the city.”

Already folks are wondering what the Tsakopoulos family is hoping to gain from this.

A letter from Kyriakos Tsakopoulos, President & CEO of AKT Investments, confirmed the “willingness of the Tsakopoulos family to donate 200 acres of our Davis Ranch property to the City of Davis… for the purpose of development of an Innovation Center.”

“The acreage we would propose to donate shall be mutually agreed upon and shall be placed in an endowment for the benefit of the City,” Mr. Tsakopoulos writes.

He notes that such a donation would occur upon satisfaction of the condition that, within 24 months, “the city would annex the property into the City of Davis and rezone the property with all requisite entitlements necessary to develop and construct an Innovation Center on the property.”

The City and CCV “should work together to select a qualified master developer for the property and should explore the opportunity to place a measure on the November 2014 ballot that advances and/or streamline the entitlement process for the Innovation Center on Davis Ranch.”

Mr. Morris told the Vanguard, “I wrote a letter to Angelo Tsakopoulos a little less than two weeks ago. Our 6/23 response to the City’s RFEI request was the outcome.”

Because the agreement came about so late, he explained that “there was no time” to talk to city staffers or the council prior to submittal. He said, “(I) had brief conversations with Rob White and Rochelle Swanson after submission.”

David Morris sees his proposal as complementing the other two, “They are not mutually exclusive. More options for prospective end-users is a good thing.”

He said, “The CCV proposal is an innovative new approach to our long-standing tech park problem. The City’s basic framework to address this problem has not evolved significantly since the Business Park Land Strategy was adopted in October 2010.”

“Because of the exceptional financial and planning advantages that the 200-acre Tsakopoulos gift would give the City, the Davis Ranch opportunity deserves serious consideration,” he said noting, “The City, as land owner, would have much more control over the planning process and outcomes.” He added, “The Davis Ranch site would provide major revenue streams from land sales and/or ground leases not possible at the other two sites.”

Councilmember Rochelle Swanson told the Vanguard that she had not had time to review the submittals and therefore declined to comment.

In their proposals, the NW Quadrant Innovation center saw a primary benefit, in “[c]reation of new high-paying jobs that will attract and retain high-value employees—giving more highly qualified Davis residents opportunities to live and work in the community.”

They add, “With no residential component in the project, employees will utilize existing real estate in the City.”

The city of course has the units coming on line for the new Cannery project development, as well as faculty housing down the road at West Village.

But when the Mace Innovation Center is looking at between 5600 and 9000 jobs created over the next 15 to 20 years, you have to figure a similar number for the NW Quadrant Innovation center and probably something similar if the Davis Ranch Innovation Center gains traction.

You are looking at 10,000 to 20,000 new jobs, some high paying with limited places in Davis to house them. So, while the immediate prognosis is no new housing with these proposals, clearly housing discussions will have to be forthcoming in the next ten to twenty years.

The community needs to discuss this as long as the need for revenue, which each of these projects figure to provide. This is not going to be a short-term fix for the city’s structural deficit, but rather part of a long-term strategy to make Davis more sustainable.

—David M. Greenwald reporting

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