Analysis: Davis Lags in Per Capita Retail Sales

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As we noted earlier this week, Davis, probably not surprisingly, is near the bottom in terms of per capita retail sales tax, with the city generating about $8400 in a year per person in retail sales.  That puts them in the same ballpark as other college towns like Isla Vista, Berkeley, Merced, and Claremont, but trailing all of them and well behind some regional comparisons.

Retail-Sales

This chart compares Davis’ per capita retail sales to a number of other college towns, and also to some regional neighbors like Dixon, West Sacramento, Woodland, and Walnut Creek.

While some of these cities have some huge built-in advantages, such as Palo Alto with a booming tech market and San Luis Obispo with tourism and a regional hub, others have advantages that are far less clear cut.

For instance, Woodland, West Sacramento and Dixon are really not that different from Davis in terms of tourism and geography, and yet  they are racking up 2.5 to 3.5 times more per capita in retail sales.

That doesn’t mean we should necessarily aspire to be like our regional neighbors nor does it mean we should attempt to replicate what San Luis Obispo or Palo Alto have done.  However, even if we aspired to have our tax base look like that of Woodland or Isla Vista, we might be in far better shape.

As we noted in the previous article, the short-term picture is slightly improved over where we were five years ago.  Nevertheless, the growth picture seems relatively weak for the next ten years – heavily reliant on the economy to continue to grow and the community to renew the sales tax.

At the same time, barring another major revenue measure, the city is going to have difficulty generating revenue to repair its infrastructure and keep up with its obligations to retirees in the face of increasing health care and pension costs.

For years, the city has talked in terms of sales tax leakage to other communities.  Davis built a Target as one way to plug that leakage, but it is fairly obvious that West Sacramento, Woodland and Dixon, with far more in the way of retail options, are doing markedly better than Davis.

Davis, however, has resisted adding peripheral retail and big box other than Target, and if it wants to continue that policy, it has to look for other ways to generate sales tax.

That is where the notion of innovation centers and tech transfer came into the thinking.  The idea was that the university has raised over a billion dollars for new research.  Much of that research has at least the possibility of becoming monetized and transferred from the university setting into the private market.

The investment of technology and capital infrastructure into existing or new facilities would increase the value of the property and thus increase property tax rolls.  Moreover, as new technology is developed, there would be the potential for point of sales revenue for the city.

While we can see from this chart that a more developed retail sector would lead to more sales tax, there are questions as to whether we could do it in a way that doesn’t simply lead to peripheral retail, a continued decline in the core of downtown, and a decline of our native business base.

We will be taking a closer look at San Luis Obispo in the next week or so.  When I moved out of San Luis Obispo, 20 years ago, the population was only about 2000 people fewer than it is now.  What has greatly expanded is its retail base, adding a number of big ticket stores from Costco to Target to Home Depot and the like.  At the same time it has developed on the Ag-tech front – something that Davis would have liked to have done in MRIC (Mace Ranch Innovation Center) and other proposed innovation centers.

San Luis Obispo, of course, has some advantages over Davis.  It is the largest population center in its country – although some of the big box and other retail is duplicated to the north and south.

It has a huge tourism base that draws people into the area year-round and allows for a greater number of purchases than a city of its size otherwise might have.

But, as we can see, while San Luis Obispo might be unique, certainly West Sacramento, Dixon and Woodland have done better than Davis in terms of retail sales.

Another possibility is virtual tourism.  One person told the Vanguard that a huge amount of people flow into a city like Palo Alto every day to work in R&D (research and development) and the high-tech field.  That means they purchase their food and potentially small goods in Palo Alto, adding to their sales tax base.

In Davis, while there is an influx of people into the city, many are students who are already tapped out in terms of purchase power.  Can an innovation center focusing around Ag-tech, Med-tech and other high-tech production lead to more people in Davis each day who are then purchasing food at restaurants or buying products at local retailers?

These are concepts that bear more exploration.  What is clear is that right now, with a huge unfunded liability and unmet needs, we need to find ways to increase our very meager sales tax intake, and I think most people would like to do so without a huge influx of big box and other peripheral retail.

—David M. Greenwald reporting

Correction: the original version inaccurately identified the statistic as per capita sales tax rather than per capita retail sales

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  • David Greenwald

    Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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Breaking News Budget/Fiscal City of Davis Economic Development

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257 comments

  1. and, once again, let’s thank the realtors and developers in this town for that also….

    Many long-term businesses, for example… De Luna and now Outdoor Davis, and I am sure my pal Wendy Weitzel could name so many more, have been pushed out recently by the likes of the owners of the Brinley buildings….

    And, my friends Rhonda Gruska and hubby got pushed out by the developers of the sad 8th St. mall not long ago… did the city do “it’s job” in ensuring that mall owner kept up his agreements????? nahhh…

    nah ……now we have to drive all the way to Sac to go to a decent farm to table restaurant, when we had one here until a few months ago…

    and, we are now getting more chinese food …truly, is that needed?????

    and, last year we also lost Tuco and also my fave downtown consignment store and some other truly fave stores….

    they were all way too busy pushing and pimping for the Yes on A, Nishi….

    In the South Davis Nugget mall, both Tuesday morning and Mocha Joe’s got pushed out…in favor of Starbucks   (gag me) and who knows wtf they had against Tuesday morning…

    Before that, the only decent pharmacy in town,  a compounding pharmacy, got run off due to the horrific costs to do business in that mall…

    The developers who own the malls and buildings all over town are causing many of the vacancies these days…and there is no control over them…  they are now charging exorbitant rents which the older businesses just cannot keep up with…

    Yeah, I know, some of them are due to “new guys” coming in who “have to”….

    do they really have to, or do they want to???? 

    Are, they truly “new guys” or old Davis guys in new sheep’s clothing????

    And, who cares if they are new to town…they don’t care about our old businesses and they are ALL well off  (caps for emphasis)…..

    .or else they couldn’t afford to buy those buildings and malls…

    PS>  and thank the old time developers and realtors for creating such high priced real estate in this town right now….

    good morning all….and have a good day   🙂

     

    1. Marina said:  “they were all way too busy pushing and pimping for the Yes on A, Nishi….”

       

      And the other two larger exterior projects.

       

      One of my main reasons against the City promoting all this new junk is that it pushes aside City and community resources from fostering and promoting the current businesses in town … there is not enough staff time and CC and PC agenda time to do it all.  The junky stuff is just a distraction, but it does feed and cloth the planners who are paid hourly by the applicant for working on it.

      1. true, MH, and one can go round and round and read the other comments on this thread, and see the same players and yet the same rehashed nonsense…

        once again, one would think this was the most important thing going on in this town, county, state and USA>>..not to mention the world….ha ha….by the number of responses and the passion….

        when truly there are real life/death matters on the other threads….  oh well…hope you are enjoying the show….

         

  2. PS>   if one watches what truly goes on in this town, and actually looks at Woodland more closely, one will understand what went on there..

    When the county fair mall opened in the 80s or so, it killed off the downtown…..took many years for it to come back, but come back it did….way better than ever…

    As a result, the county fair mall fell apart and died….many in the country-side like the unique shops and restaurants that have sprung up….

    they, like me, become loyal to small businesses and wouldn’t be caught dead supporting the likes of Walmart or even Target…. cringe….

    From our South Davis home, it is now faster to zip up 102 to Woodland than it is for me to head to my office on campus….

    there is plenty of free parking and also a lovely ambiance more suited for the non-student population…

    not too many fights either…and even though Woodland supposedly has more gang members, I have yet to see any of that….

    Davis continues to be a conundrum, so much talk and little action, by the esteemed CC and city planners…

    in the meantime, we love to eat out at Winters and Woodland, and now downtown Sac…even Sac is not that far if one times around the traffic….

    as I keep saying to those who are so clueless on the DV and who still think the CC and the city do such a wonderful job, just look around and vote with your dollars and your feet when ever you can…and then perhaps some more will wake up…

    don’t count on it happening any time soon, though….the developers are now so fully in charge, and though I love Brett, he is a lone voice of sanity on that CC council majority….

     

    1. Marina:  Brett voted multiple times for horrible water rates, and the project itself, and for Nishi, and he was the third and truly deciding vote for Blondie’s. which was represented by Attorney Kopper.   Blondie’s is a first class disaster for D St.  The other night they were pounding out the loud music, and I cringed for those poor owners and tenants living in the upper floors of Chuck Roe’s building at 5th and G St.  (Any realtor renting or selling one of those nice units had better disclose what Blondie’s is doing a block away … the music was so loud I doubt those units are habitable.)  The downtown plan emphasizes residential and mixed use, and these nightclubs are making it impossible to live downtown.  This is a sea-change from several years ago, and your friend Brett made it happen for Blondie’s.

      I doubt that the living units in Grace Chen’s big building at 2nd and G are habitable anymore for night sleeping. Again, planning allows those night club uses, and the shut down times are way to late. (I think that Chen probably has a cause of action for nuisance against the City and those clubs if she wants to make a point …)

       

      But Planning is so hungry for those fees, and the CC for the sales tax revenue, that the City continues to allow these places, driving out other businesses.

       

      I have lived and worked downtown since 1995.  24×7.  I know.

       

      1. yep MH…you and I have been on the same side of many an issue over the decades…

        Brett may not be perfect, but heck , his record is way better than the others….as I said, there is no one who is not beholden to developers (and/or related to developers) on the council at the moment…

        mixed use can be a good thing, and I like the concept overall…..it should not be forced down the throats of those who created a life for themselves, only to have the game changed on them…that include Blondie’s  and of course, Kopper also served his time on the CC and then went on to better pastures…representing those with the bucks in this town to force anything they want ….in the name of more dollars for themselves and their pals and so it goes…

        many of the same players for the last how many decades?

        That whole water project fiasco, and then to find Alan who led that nonsense, then have to lead the fight against the fluoridation, well that was some kinda ” poetic justice ” I guess….of course, if not for Matt on the water board, that would likely have been rubber stamped by the same current council majority that “believes” the ADA truly is for dental health and so on…

         

        1. Marina said . . . “there is no one who is not beholden to developers (and/or related to developers) on the council at the moment …”

          Marina, I completely disagree with your statement above.  How is Brett “beholden to developers and/or related to developers”?  How is Robb “beholden to developers and/or related to developers”?

          You have painted with a very inaccurate broad brush in my opinion.  My very strongly held opinion.

        2. Marina said . . . “Kopper also served his time on the CC and then went on to better pastures…representing those with the bucks in this town to force anything they want ….in the name of more dollars for themselves and their pals and so it goes…”

          Here too you are out of bounds.  Can you name even one project where Bill Kopper represented “those with the bucks in this town”?  I can’t, and I pay pretty good attention to these issues . . . and served on the Water Advisory Committee (WAC) where Bill was one of the strongest voices for a full and complete airing of all the reasons why the surface water plant as proposed was flawed.

        3. Marina said . . . “I guess….of course, if not for Matt on the water board, that would likely have been rubber stamped by the same current council majority that “believes” the ADA truly is for dental health and so on…”

          I am afraid your guess is wrong.  Mark Siegler, Bill Kopper, Walt Sadler and Michael Bartolic were much stronger opponents of any “rubber stamping” consistently throughout the WAC process.  I adamantly opposed the original plant sizing and the population growth and historical water use data that was used to justify the original oversized plant, but my opposition to the plant in its entirety was no where near as strong as Mark’s, Bill’s, Walt’s, and Michael’s.  They are the ones on the WAC whose positions were closest to what you are describing.

        4. Matt, I was talking about the fluoridation issue…was not so heavily involved in any meetings on the water project…. truly, was too inundated with many other things at that time also.

          Kopper was involved as an attorney pushing through the Blondie’s project after leaving the council

          and, if one looks at campaign contributions, one can see if Brett and Robb received funds from developers and realtors and others in those industries…

          Given what was on my plate, I was making observations based on final votes, as reported in the local DE….and the strong support for Nishi, regardless of so many reasons why not, kinda supported my perception.

          Also, the giveaway to the cannery to the tune of $1o mil, within days of “final agreement on the negotiations….

          those are 2 recent reasons why I said what I did…….and perhaps that is a strong term, but that was a ton of bucks also…

           

        5. Marina said . . . “I was talking about the fluoridation issue…was not so heavily involved in any meetings on the water project…. truly, was too inundated with many other things at that time also.”

          Fair enough Marina.  I know what it feels like to be inundated.  It is worth noting that I was unavoidably out of state for the WAC vote on fluoridation, so I personally get/deserve no credit one way or the other regarding the WAC and fluoridation.  Further, if my memory serves me correctly, I believe the WAC did not recommend to the Council that they proceed with fluoridation.  They also did not oppose fluoridation.  It was a split vote.

          Marina also said . . . “Kopper was involved as an attorney pushing through the Blondie’s project after leaving the council.”

          I forgot about that one example Marina.  You are right about that one.  Are there any others in32 years since Kopper last served on the Davis City Council in 1984.

          Marina also said . . . “and, if one looks at campaign contributions, one can see if Brett and Robb received funds from developers and realtors and others in those industries…”

          I shared the Treasurer duties for Robb’s campaign with Mont Hubbard, and I am intimately familiar with the data in the Form 460 filings.  Bottom-line there were 250 individual contributors to Robb’s campaign, and exactly one of those 250 fits the description of  “developers and realtors and others in those industries…”  I am not as familiar with the details of Brett’s contributions (but they are on file with the City, so it would be relatively easy to check). but my suspicions are that his contributor records are similarly devoid of any “developers and realtors and others in those industries…”

          Marina also said . . .  “Also, the giveaway to the cannery to the tune of $1o mil, within days of “final agreement on the negotiations….

          those are 2 recent reasons why I said what I did…….and perhaps that is a strong term, but that was a ton of bucks also…”

          I agree the Cannery giveaway was a ton of bucks, but both Brett and Robb voted against it.  So it is hard to blame them for that.

        1. I went to Blondie’s, the Pizza was disgusting and the “arcade” was already broken down in the first week. That place is nothing more than a bad night club.

  3. Davis, probably not surprisingly is near the bottom in terms of per capital sales tax, with the city taking in about $8400 in a year per person in sales tax revenue.

    Am I missing something here?  This can’t be right, that number is rediculously high.  David can you explain?

      1. I noticed, David, that you substituted one verb from your previous one… BRAVO… five gold stars for ‘owning up’…   I hope to (and hope others will) follow that example, as necessary…

  4. I would bet that UCD grossly inflates the “business tax” for the town….much UCD business now takes place within the town city limits and that is why it is so high…….it is cheaper for UCD to lease buildings within the town right now, than it is to build to the public sector ADA mandated requirements…and thus, again, the UCD is bailing out the town…

      1. David, someone more in the statistics side of UCD could pipe in better, but if you drive around town, you will see the ANR and the shared service centers on second street…and all around the downtown area there are hubs of “offices” and even some labs sprinkled throughout… for example,  the cousteau area and there have been negotiations for the old Monstanto labs…

        drive down A street, and counseling and others are on that street…

        in South Davis the UCD bookstore has a huge presence, where the books and merchandise are delivered.

        The Center for Neuroscience and the payroll, and many central services are near the Richards on South Davis side.

        Office of Research takes up significan real estate near the baseball field.

        All of those deliveries pay full city taxes as those units are in the town proper..

        And, the UCD bookstore presence in downtown, which sells UCD related items – the purchasers of those items pay full taxes, and UCD bookstore in turn sends that to the state…

        If anyone knows Bob Seeger, he could likely give the sq footage of UC leased in town properties ….  I don’t have time to look up those statistics at the moment.

         

         

        1. huh?   we would be even lower if not for the UCD….that is the point…

          and, truly the real issue is that decisions have been, and continue to be made, that kill off the small unique specialty shops….

  5. not so, David,  read and try to understand what I just posted….okay???

    UCD gets a sales tax break for deliveries to campus…they pay full city of davis taxes on items delivered into town…

    just call Accounts Payable on campus if you still have questions…truly….unreal….that you would question what I say on such business matters…

    1. Marina, as usual your response is unpleasant.

      It is true that sales on the UCD campus pay county, not city tax.  I believe that UCD is walking a fine line when they buy something from a store in Davis but then have it delivered to campus rather than picking it up, paying only the county tax on their purchase.  I wonder how much the City is losing out by this practice.

      1. gosh, no matter how I try to clarify, some just don’t get it…that is frustrating, ryankelly…when I clarify because the point is being missed and yet the op and others keep repeating the inaccuracies…

  6. Dixon’s per capita retail sales is $22,560.  Truly amazing considering Dixon’s per capita income is only @ $28,000.  That just shows how much retail leakage travels from Davis to Dixon.  I’m trying to think what the big draw is, Walmart?

      1. Also likely, Syar… http://www.syarconcrete.com/concreteDixon.html#anchor… that could also be a strong, solid, contributor (in the aggregate) to the Dixon numbers…