It has now been three years since the city put forward RFEI (Requests for Expressions of Interest) in order to bring forward innovation park proposals. The plan brought immediate success as three proposals came forward, but that success was short-lived.
One proposal never got off the ground. A second proposal was suspended and has basically moved to Woodland. And a third proposal has had its share of stops and starts – but there is no current proposal for MRIC (Mace Ranch Innovation Center).
The innovation center concept came forward out of a lengthy discussion process. The city, through discussions at D-SIDE and through the Studio 30 report, recognized it needed commercial space where companies and university spin-offs could go and develop commercial research and development centers that could take university-based research and technology and transfer it to the private sector, which would generate revenue for the city.
That was seen as the best economic development route for the city – and it remains the case today. The community has largely balked at retail malls and other retail centers away from the downtown. The rise of e-commerce has shifted tax revenues away from such local centers anyway.
At the time of these discussions, the city was seen as being heavily in need of more diverse, more robust, more sustainable tax revenue. If anything, the fiscal situation of the town has grown more and not less precarious in the intervening years.
There are no guarantees here, but the last and best chance to develop a research park on the periphery of Davis remains MRIC. The other location near the hospital is away from I-80 and lacks an interested party as a developer. The are no other large plots of land near the city with interested landowners and available space.
Is MRIC the ideal location nearly 3.5 miles from the university? Probably not. But it is located near the highway and it could work if the city voters would be willing to approve the project.
The reality is that there is no project at this time – however, the applicant is asking for the city to certify the EIR even in the absence of a project, and that appears to be a legal option.
There are concerns with going forward at this point. But I don’t think they are insurmountable.
The project that was studied is probably not going to be the project that goes forward. However, changes in the size or scope would trigger at least a partial new study.
The EIR did study a housing component with equal weight. There are many concerns about housing on the MRIC project, even if it would seem a good way to reduce the carbon footprint by providing housing next to work and hopefully avoiding some commutes.
While I think there are some plans to increase the number of workers residing on site, ultimately the developers cannot simply set aside the housing for workers only.
However, the council last year indicated their opposition to housing on the site and voters would have to approve the ultimate project – the inclusion of housing is believed to be a Measure R vote killer.
There is also the concern about what to do about the 25 acres of land that is city-owned. Open space advocates want this land set aside and put into a conservation easement. The city has not decided what to do with the 25 acres and certifying the EIR is not necessarily a step toward a city sale of the property.
Personally, I believe we could find compatible uses for the 25 acres that could work both in terms of creating a conservation easement as well as serving as land for the innovation center. One could think of it as land set aside for experimental agriculture to assist a World Food Center or other ag tech endeavors.
In the end, no matter what the council does here, there are two huge barriers to an innovation center.
The first is that the developer needs to figure out financing. Our suggestion would be to figure out a way to partner with the university to bring the billion-dollar World Food Center to MRIC – that would serve as an anchor tenant and provide the certainty in investment needed to build the infrastructure necessary for expansion.
The second barrier is a Measure R vote which requires the voters to approve whatever is proposed at the site. That will preclude the worst-case scenarios that critics fear. The developers will have to figure out financing and whether to include housing – but that will ultimately be subject to voter approval.
Back in 2014, Councilmember Rochelle Swanson read a letter from Congressman Garamendi who urged the city to move forward with the Innovation Center, writing, “Our nation needs innovation, creativity and technology development from communities like yours to be leaders in agriculture and manufacturing research and to create companies and jobs.”
He added, “Your description to me of the stated desire by so many companies to locate and grow in Davis is impressive and demonstrates the powerful draw that UC Davis has on technology investment. I encourage the community of Davis to get underway with an effective and expedited process to meet this demand so that the university, the community, and the region can benefit from the investment and resulting economic impact.”
We can debate over the perfect project. This will not be a perfect project. There will be trade-offs.
We can work together with the developers to improve it.
But at the end of the day, MRIC is the last best chance to move forward on a project that has the potential to transform our economic and fiscal future in a positive way, and we should do what we can to expedite such a project.
We have Measure R as the fail-safe option to reject bad projects, but now is the time to reach out to the developers to ask them to put forward a project that we can all support and that will help this community move forward.
—David M. Greenwald reporting
I reject this over the top doom and gloom. This may be the last chance for this on again off again phantom proposal, but it is highly unlikely that this is the last business park every proposed in Davis.
Ever is a long time. However, I think first of all there is a difference between a “business park” and research or innovation park.
There are several factors here in my comment:
The projected 20-plus year $8 million shortfall in the city budget
The availability of the land which is surrounded by a conservation easement
The lack of other available large spaces along the freeway
Given that, I think this is probably the last best hope for a project of this sort in the foreseeable future
The city needs to right its budget without depending on a lottery ticket project like this. Even if the MRIC is built, it will be years before revenue is realized, and lacking a project proposal it is beyond unclear what type of revenue stream it will generate. If a substantial part of the project became the World Food institute or where used for other UCD projects those projects as you suggest in the article would not generate tax revenue for the city.
Calling this, “the last best hope,” is overly bellicose hyperbole.
Part of getting right the city’s budget is to create sustainable sources of revenue. Right now not only are we suffering from huge shortfalls, we rely heavily on autosales for the sales tax we do generate.
Relying on a single make or break project to fix the budget is a bad idea.
The original plan had three options, two are gone, one is nearly gone
Strangely, I agree with you Grok. What is your proposal for fixing the budget? Details please. I’ve only ever seen you write about things you oppose or dictating to other entities what they should be doing to solve our problems. What specific actions are you proposing that WE as a city/community should be doing ourselves to fix the budget?
That doesn’t have to be the final outcome. We could choose to annex those properties as undeveloped land (maintaining their current zoning) and encourage the landowners to propose projects that meet the City’s needs. Alternatively, we could change the parameters of the RFEI and entertain projects that include workforce housing. Either approach would create the opportunity for new projects to come forward and be evaluated by the community. The path we are on has not worked (for a variety of reasons) so we can either change course or give up (If the decision is to ‘give up’ we may as well declare bankruptcy at the same time).
“The original plan had three options, two are gone, one is nearly gone”
And that is exactly why the city needs to right its budget without depending on a on again off again phantom project.
I disagree – part of right its budget is creating stable revenue streams.
So how large a property tax increase are you proposing, then?
David,
The problem is the MRIC EIR should not be certified because it is seriously flawed, such as the ridiculous assumption that 80% of the 850 housing units would be occupied by an MRIC employee. First of all this assumption is not realistic. Beyond that it would never materialize since it can not be implemented because there is no legal way to enforce it. Any potential housing units on site at MRIC would be far more likely to be occupied by I-80 commuters, not MRIC workers. Plus any land used at MRIC for residential would diminish any revenue benefit that commercial would be providing.
Also, let’s not forget that the Ramos developers promised from the beginning that the MRIC project would be a commercial-only project for revenue for the City, which is what the community was receptive to considering. But then the Ramos developers did the “bait and switch” of trying to change the project into a mixed-use adding 850 housing units. Since the developers complained earlier that this MRIC site was not physically big enough for the amount of commercial space they wanted to provide, it was astonishing that they now seemed to be able to suddenly shoe-horn in 850 housing units.
All of space at MRIC was (and should still be) focused and concentrated on commercial, not residential. This was the entire point of looking at the MRIC proposal… to help generate revenue for Davis via a commercial-only innovation park.
On top of that issue, whatever space UCD would occupy at MRIC would be tax-exempt including the commercial, and any residential that UCD could “master lease”. So the City would be denied property tax on any UCD occupied space at MRIC, both the commercial and residential, which negatively impacts any financial benefit for the City which has been the main purpose of exploring an MRIC innovation park.
Unfortunately you’ve made the 80% argument before – both Matt Williams and I pointed out ways to get to 80% including as Matt pointed out through a master lease and I pointed out through credit check requirements. There was a long discussion lost to the server crash here.
None of what you suggested before (that was all deleted last night, just like Eileen’s comments) is in a the proposed project because there is no proposed project. Everything you suggested is speculative, and you never showed any examples of it working in a way that generates revenue for the city.
Meanwhile, UCD Master leases like they currently have on 3 apartment complexes in the Davis generate no tax revenue for the city.
But that’s a state property tax issue, it’s not endemic to master leases.
So your proposing that private companies that locate in MRIC will master lease housing. That is a very speculative proposition and hardly a reasonable thing to base the EIR on.
Colin, the following language of the CEQA statutes directly addresses your concerns
.
Those CEQA provisions address the question you pose as follows:
Inclusion of a Master Lease provision in one of the identified alternatives complies with Section 15121, specifically that an alternative containing such a provision will “inform public agency decision-makers and the public generally of the significant environmental effect of a project and identify one possible way to minimize the significant effects” of the project.
Further, the concern you raise about a Master Lease provision is directly addressed by the provisions of Section 15123 (b)(2), whereby the EIR must “identify areas of controversy known to the Lead Agency including issues raised by agencies and the public” The points you are making here in the Vanguard clearly identify a Master Lease provision as an area of controversy because of the limited history of such Master Lease provisions.
In fact, one could argue that failure to include an analysis of the mitigating effects of a Master Lease provision would be a clearly identifiable shortcoming of the EIR.
David and Matt,
It is completely far-fetched that 8o% of the units would be “master leased”. There is no way that that would happen because of the millions of dollars it would take to “reserve” at least 680 units and the cost impacts would never be sustainable to private businesses. Plus I serious doubt if what you are suggesting is legal since it would be discriminatory to “reserve” the occupancy of 680 of 850 housing units for any private sector group. So there the idea of making this a mitigation is also far-fetched.
Actually Eileen it is very simple to ensure that 80% of the units would be “master leased.” The City (under the provisions of a duly executed development agreement) would simply not issue building permits for any more units than would legally comply with the 80% threshold.
For example, if tenant #1 executed a master lease for 80 units for their employees, then the City would have a “cap” of 100 building permits that the City could issue.
I fully expect that Colin will ask for an example in the region of such a building permit issuance cap, and I will gladly (and proactively) point him to City of Davis Resolution No. 08-019, Series 2008, passed by the Davis City Council on February, 12, 2008, and enforced continually ever since that date.
It is worth mentioning that both Eileen and I were instrumental (along with many others) in the passage of Resolution No. 08-019, and the subsequent semantic battle over whether it was a Goal or a Cap.
Eileen Samitz said . . . “Plus I serious doubt if what you are suggesting is legal since it would be discriminatory to “reserve” the occupancy of 680 of 850 housing units for any private sector group.”
Eileen, are you saying that the UCD Master Lease Agreements with the Lexington, Arlington Farms, and Adobe are illegal?
Eileen Samitz said . . . “So there the idea of making this a mitigation is also far-fetched.”
Your statement misses the very point of a CEQA EIR. It is a speculative document. It looks at possible alternatives to mitigate environmental impacts and than analyzes the strengths and weaknesses and opportunities and threats associated with that formally speculated alternative.
There is no question that greenhouse gases and many other environmental impacts will be significantly mitigated if all the employees of a business live and work in the same location. No question at all. The legitimate question, which the EIR must grapple with if such an alternative is formally included, is what the likelihood is of achieving that level of cohabitation.
Matt,
You conveniently left out the term “private sector” from my comment where I was making the point that no private sector business is going to invest in spending literally millions of dollars annually to reserve 80% of the housing long-term at MRIC, nor is it likely to be legal.
UCD, however, can arrange large numbers of “master leases” since it is not the private sector, which is precisely the major potential problem I pointed out. If UCD did master leasing for residential at MRIC it would deny the City an enormous amount of property tax. In addition, any commercial rented by UCD would also deny the City property tax on any commercial land leases as well. So all of this is counter-productive to the City.
Furthermore, on your proposal to try to use a development agreement to define any type of master leasing, development agreements are notorious for being renegotiated by the developers after the project is approved. But to begin with, what you are proposing is not at all likely to be legal anyway. Finally, what you are proposing is also not related to the resolution you are quoting.
Eileen Samitz said . . . “no private sector business is going to invest in spending literally millions of dollars annually”
Eileen, your statement above prompts two questions:
(1) What is your basis for estimating the cost of a master lease as “literally millions of dollars”?
(2) What is UCD currently paying The Lexington (or Arlington Farms or Adobe) for its annual master lease?
With those two questions asked, you go on in your comment to imply that there is a different standard of legality for UCD vs. a private sector business with respect to executing a master lease. What source are you using to support your belief in that double standard?
Eileen Samitz said . . . “Finally, what you are proposing is also not related to the resolution you are quoting.”
A Resolution establishing a cap on the periodic issuance of building permits doesn’t have anything to do with a proposed cap on the periodic issuance of building permits?
Irrespective of the speculation about the percentage of workers in housing in MRIC, this is really the salient point. Land used for housing reduces the revenue to the city.
Your ‘point’ is simplistic, not salient. If the only way to make the project financially viable for the developer (in the current economic climate) is to include workforce housing, then housing is required for the City to gain any new revenue. In that case, the land used for housing increases revenues to the city, especially if said housing is restricted to high-density, multifamily construction.
Mark’s point is correct . . . as long as the housing is in fact predominantly workforce housing for the workers employed at the Innovation Park.
We have no way to know if that is the case, and this development team has a serious credibility gap on the issue. Housing is more profitable for them. Whether that is the only thing that makes the project financially viable is unknown. Just because Mr. Ramos says it is the case does not make it so.
I agree with Don. To date there is a substantial absence of such evidence. If the Ramos team had attended the April 2016 FBC meeting where the EPS/Plescia/Goodwin economic analyses were discussed, there would have been an open public dialogue about the fiscal feasibility issues. However, the Ramos team chose not to attend, and shortly thereafter put the project on hold.
Yes, actually, we do. Developers won’t propose a project that they do not believe is financially viable so consequently to find the answer all we need to do is count up all the proposed projects currently in the pipeline with the City. It is a very short list.
If Mr. Ramos and his team decide that the project is not financially viable from their perspective, it matters not what you or I (or the City) thinks. It is their money at risk so yes, they do get to make the determination (not you or me or anyone else).
Instead of arguing the point to death, why don’t we instead look at how we might address both our need for commercial space and that for high-density multifamily housing by combining the two into one project. We can state up front what types of housing are acceptable and allow potential developers to propose solutions. We may find that even with that addition the projects still won’t ‘pencil out’ and we may need to consider further options, but we won’t know until we try. What we can say definitively, however, is that the project criteria demanded in the RFEI are currently not financially viable in Davis.
Since everyone seems to be reiterating their now-deleted comments, I’ll reiterate my point, that even if the MRIC were a wonderful project that would help the City, that is not the question we face now. The question we face now is whether the EIR should be certified, and that is completely separate from any benefits the project (whatever the project might be – we have no project on the table) might bring. It is highly problematic to imply that we should certify the EIR because the MRIC “needs to be given a chance.” (And if that isn’t what this article is implying, then I don’t know what the point of it is, given that it is the EIR being on the Planning Commission’s docket that has restarted the discussion of the MRIC).
Good point Roberta. the Planning Commission has 2 recommended actions before them this week
Now is definitely the time to determine what needs to be clarified before the EIR could be certified.
I agree with both Roberta and Colin. Now is definitely the time to determine what needs to be clarified before the EIR is certified. I suspect Howard P agrees with that as well when he says, “if adequate, certify it… if not, say so, and cite the inadequacies. Time to fish or cut bait”
To put a fine edge on it, I’d say “I don’t disagree” with Matt… nuance…
Saying “we don’t know (something) for sure“, is not an inadequacy. It’s called ‘reality’. Saying there are questions on economic benefit/risk, is not an inadequacy, under CEQA, no how many wish it were. California Environmental Quality Act. A disclosure document with given assumptions… nothing more, nothing less.
Even if a project came forward exactly like the project description, a certified EIR compels not the CC to approve it, nor the voters to vote affirmatively.
That was not my point. My point was, to David and others: Stop using a claimed need for the MRIC as a reason to certify the EIR.
That’s actually a point that cuts both ways. We should certify the EIR if the EIR warrants certification. We shouldn’t be using the EIR process to stop the project or in this case a theoretical project. The EIR is an environmental disclosure document.
Of course it cuts both ways, although if there is an environmental “challenge” that the EIR has not analyzed properly, it might also be a reason not to go forward with the project.
Technical point – the comments were not deleted, they were permanently lost in the server crash.