Members of the Davis Planning Commission,I write to you tonight both as an owner of Davis commercial property and as a local Davis business owner.
Over the past several days, it has come to my attention that developers of the Cannery Project have submitted formal request, Item 6b of tonight’s Agenda, for modifications to the basic terms of their development agreement as it pertains to certain commercial buildings located in the Neighborhood Mixed Use Center – East.
This project was originally approved by City Council in December of 2013, at which time the applicants had applied for construction of a series of commercial building with a maximum single occupancy of 15,000 SF. Yet tonight, with the project not yet out of the ground, the developer is before you tonight requesting an increase to 27,000 SF (an 80% increase in the maximum allowed size) to accommodate potential anchor tenants.
Earlier this week, Eric Roe, in speaking for the Davis Small Builders Group concerning provisions of a development covenant that would set aside 30 lots for custom homes built by local builders, addressed an issue with similar ramifications for local business and property owners when he wrote: “This is an Agreement that was reached with the understanding that the local Small Builder community would support your project during the City approval process and we expect you to honor our agreement.”
So too, we, as a small, local businesses, and owners of other local commercial properties with many small business tenants, would ask no less with respect to honoring the original terms of the development agreement to which the developer is signatory. In similar fashion to the representations made to the Small Builders group, and in order to gain a larger base of support, the original development agreement contained very specific conditions including limits on the size of any new food markets or drug stores at the center and for all other categories of retail, limiting the maximum overall size of any single retail store to 15,000 SF.
We are all business people and we understand that businesses change and conditions change, but a project development agreement, and the terms around which it gains approval, should not merely be considered as a temporary placeholder – with the full picture and the true story only to be revealed once the dust has settled and the approvals obtained.
There are always risks to any new project and nobody wants a project to be unsuccessful. But there needs to be some reasonable balance in the process – or otherwise risk invalidating the integrity of the process. In stark contrast to the present situation, it wasn’t until some five years after completion of their original Target buildout that the Ramos Company – in a very open, engaged, deliberate and lengthy process – came back to the community seeking request for modifications to the terms of their original development covenants. Following that approach, particularly the outreach and engagement components, the community proved to be very accepting of the request.
In this instance, the proposed new space could be earmarked for soft goods, home improvement, sporting goods, electronics, new work out and exercise facilities, or a host of other businesses – the point is that in each case there will be impacts, impacts on other local businesses, property owners and even other tenants within the same center. For example, it’s not too hard to imagine the parking impacts of a new 25,000-27,000 SF workout center in a development of this size.
Developers seek certainty, business owners seek certainty. If the development review and approval process cannot be relied upon as a reliable tool of enforcement, then of what value is the agreement? If it should turn out to be that easy to obtain the types of changes we see before you tonight, then how can we have any faith in the integrity of future development agreements that come before in the future. Rewarding bad behavior only encourages more of the same.
As one of the most consistent and most outspoken supporters of the Cannery Project from its earliest days, it is with great sadness and disappointment that I cannot support the developer’s current request for modifications to the Neighborhood Mixed Use (East Side) component. As such, I am requesting the Davis Planning Commission to withhold its approval for Items 6A and 6B of the Planning Commission Agenda.
Doby Fleeman
I continue to shake my head at the fact that TNHC keeps attempting to change the rules that were agreed to at time.
I agree with Doby Fleeman on this issue. Store size limitation is the simplest way to enforce the nature of a peripheral retail center and guarantee that it conforms with the planned purposes and the General Plan. Larger store sizes at Cannery would likely bring in a different kind of retail store, with different traffic and economic impacts. Those decisions should be made — as they were — at the time the original development is proposed. After the main project is completed, if there appears to be a need for modification of the development agreement, such as occurred with Second Street Crossing (the Target area), that can be dealt with later. This appears to be an end run around the development agreement before the project is even built.
This is the kind of thing that damages public trust in the process of development in Davis. As stated in Doby Fleeman’s letter, I urge the Planning Commission to withhold approval of items 6A and 6B.
Is there a difference between an ‘end run’ or calling something a ‘bait and switch’?
If we want to develop a robust retail environment in Davis there are two things we need to stop. First, is our incessant need to micromanage every development, and second, the efforts to protect existing businesses from competition. We should be looking to build diversity into our retail environment, with a variety of businesses of various sizes located around town to provide residents with shopping options. When a business wants to locate in town we should welcome it, not worry about how it will impact the existing businesses. If people feel the need to prevent ‘big box’ stores from moving into town, then set the limits at 50,000, not 15,000. The problem here is not the request the changes, but the fact that we put the limits on in the first place.
The problem here is not the request the changes, but the fact that we put such ridiculous limits on in the first place.
This isn’t about big box retail. The store size limitation keeps the retail component of the Cannery neighborhood at the neighborhood level. If you increase, you are likely to add retailers who draw traffic from other parts of town — i.e., a regional shopping center. The Cannery is a neighborhood, not a site for a regional shopping center. It has enough traffic and circulation issues already.
Don… don’t you remember that 25 k SF was the “standard” upper limit for a neighborhood retail grocery site?
Does the small size of your store limit your customer base to your immediate neighborhood? People shop where they find the right combination of products, price, and service, and are not limited by location. By your ‘logic’ the Trader Joes should go broke for lack of customers. Size limitations are simply barriers to competition, and it only takes a few moments thought to understand how they have negatively impacted the vibrancy of our retail environment in town. Why repeat the failed policies of the past? Do you really expect a different outcome this time?
So, am I to assume you think the Nugget just up the street is the cause of major gridlock? The commercial space at the Cannery will front the main EW thoroughfare in town, and will have little or no perceptible impact on the traffic on that roadway.
There is a conundrum with this thinking.
Due to the higher cost of all new development as a result of our land-use constraints and all of our environmental extremism amenity demands… you have a problem making a business plan for a small retail store penciling out.
I expect these Cannery retail spaces to lease at around $35 (NNN) per sq. ft. per year or more… or about twice what you might be able to get for an equivalent space in Woodland. Take a 4000 sq ft retail store… that is about $12,000 per month just on the rent.
You don’t want to see any larger stores because you say they will drive more customers away from the downtown.
Although I don’t agree with these concerns because I think Davis has more than enough shopper capacity to support another retail center or two in and around the city, you have a problem in that the higher rents require a good customer draw in order to help the business pencil out with these high rents.
It is kinda’ absurd to me that you are advocating for new retail to not draw many customers.
No, I didn’t say that, not on this thread. And again, this isn’t about big box retail.
If you want to build a new shopping center somewhere in Davis, go for it. The city would need to update the General Plan first, I’d say. The point is that larger store sizes are inappropriate in a residential neighborhood development. The Cannery is a residential neighborhood development. Of course, it could have been zoned and developed as a business park as many of us advocated at the time, but that wasn’t what the property owner wanted and it isn’t what was done.
The plan is for neighborhood service retail there. Bigger store sizes change that plan.
Seems that they should have thought of that when they negotiated the development agreement.
No end run, no bait and switch. It is the developer making a request. The City Council is free to say no. The Planning Commission is free to say no.
Doby Fleeman said . . . “We are all business people and we understand that businesses change and conditions change, but a project development agreement, and the terms around which it gains approval, should not merely be considered as a temporary placeholder – with the full picture and the true story only to be revealed once the dust has settled and the approvals obtained.”
nameless said . . . “It is the developer making a request. The City Council is free to say no. The Planning Commission is free to say no.“
I agree with both of the above statements. The developer is free to make a request, and our representative governmental officials have the responsibility of ensuring that the value the community gives up is equal to the the value that the community receives. Other wise the transaction is not a mutual win-win.
SODA said . . . “So by my count there have been 3 recent requests from New Home to the city to change the DA and they have come out (or been reported) separately….small builder lots, stacked units and now retail sq footage. Is this correct? Are there more?“
Yes SODA there is at least one more. It predates these 3 recent requests . . . the Cannery CFD. That one was an $8 million give away, which cost the community an additional $2 million in bond placement and reserve costs. So the payment of an aggregate of $10 million for the CFD got the community $0 in value. Brett and Robb voted against that give away. Lucas and Dan and Rochelle voted for it. $10 million was a terrible thing to waste.
Nice letter.
So by my count there have been 3 recent requests from New Home to the city to change the DA and they have come out (or been reported) separately….small builder lots, stacked units and now retail sq footage. Is this correct? Are there more?
BTW, remembering the Target development discussion, I believe the city agreed that Target could sell food but had a max floor space requirement so as not to create unfair advantage to local grocery stores. Target seems to have increased their food offerings over the years: is anyone at the city assessing and/or enforcing this agreement?
““It is the developer making a request. The City Council is free to say no. The Planning Commission is free to say no.“
While this is true, it almost completely changes the dynamics of the relationship between the city leaders and the community members. When a project is first being proposed, there is usually time for full community input. People do their research ( or don’t) and make their opinions known to their leaders and frequently their points of view are taken into account. However, when changes are proposed after the fact, those in the community ( who often will be affected) cannot be expected to be continuously on the alert or to have the time and energy to oppose those changes they see as adverse. This is hardly in the spirit of a collaborative process that respects the preferences of the community instead of just the profitability of the project even if it is “common business practice”.
The proposed changes will have no impact on you, Tia, nor the vast majority of the residents of Davis. They are relatively small changes that stay within the boundaries of the EIR, so their incremental impact will be essentially non-existent. The small builders in town have a reasonable complaint, but the rest of the noise is coming from those who are just looking for something new to oppose. In a more rational community, the proposed changes would be handled by the planning staff and CC without any undue concern by residents.