The Vanguard has spent much of the summer so far talking to councilmembers, city staff, and community leaders about the need for economic development. There is a general agreement – especially noted by the city council that economic development is desperately needed – but also a sense of frustration as to how to go about getting the momentum from 2014 back.
In 2014, Davis appeared to be on the verge of realizing its need for large scale economic development – it had two peripheral innovation center proposals and Nishi was making its way toward a 2016 ballot vote with sizable R&D space.
But the Davis Innovation Center (DIC), bogged down in near-neighbor complaints and land use challenges, decided to cut its losses. Hines, a world class innovation center developer, pulled out of the project and local developers found Woodland a more receptive host city. Eventually the project moved to Woodland and has since been approved – as Davis languishes without a clear path to an innovation center.
Meantime, financing and other land use issues bedeviled the Mace Ranch Innovation Center (MRIC). When the developers, who had originally agreed to develop the project without housing, asked for the council re-consider housing on the site, they were rebuffed. They put the project on hold. They came back briefly to get the EIR certified, but have been largely quiet ever since.
Finally, Nishi seemed promising for providing short-term, near-campus innovation space, as articulated in the Studio 30 report. The project in 2016 featured 300,000 square feet of R&D space, and 
Sierra Energy agreed to come on as a major local investor – but the voters turned the project down by 700 votes.
With the student housing crisis worsening, the developers came back with a housing-only project that passed overwhelmingly, bypassing concerns about traffic by creating a university-access only project. The energy for innovation space has shifted to smaller in-town sites like the University Research Park, which has just filed a recent application for modifications to their existing site, and Sierra Energy’s Area 52.
In the meantime, the university, wary of embroiling itself in more land use disputes in the city of Davis, has joined forces with Sacramento and its Mayor Darrell Steinberg on Aggie Square – which would add a dense innovation center to Sacramento, bypassing Davis.
One thing is clear – with the failure of Measure I, the roads tax, the uncertainty about future tax funding, and the low yield from sales tax in Davis, Davis is in need of greater economic development and revenue generation if it wishes to retain its basic levels of city services and the amenities this community has grown accustomed to.
But the only realistic path to get there is for Davis to expand its economic development and take advantage of its status as a host city.
The question is – how does Davis reengage in the economic development push?
The biggest problem we have, as seen with the failures of our 2014 efforts – economic development gets bogged down in land use debates and investors cannot afford to wait out the market.
To illustrate this problem, let us look at the non-Measure R project, Sterling Apartments. It took the developers about two years of planning to get the project before the city council last spring (2017) for approval by the council. It has then taken another year or so to get the project ready and it will take approximately two years to build – with the hope that it is done in two years, ready to open for the 2020 fall quarter.
That is five years from conception to opening for an apartment complex that did not require a Measure R vote. Now imagine having to go through an expensive and lengthy planning process – both MRIC and DIC had spent well over $1.5 million just in the planning process and DIC had not even done an EIR yet – only to take it to a Measure R vote and lose.
That’s what happened to Nishi. Nishi had local investors waiting to come in and help them develop the innovation center, but they ended up losing a very narrow vote and that was enough to encourage even local developers who owned the land outright to punt on an innovation center and go for a more certain project that was housing only.
The landscape has actually changed rather drastically since 2014. Now we have Woodland, West Sacramento and Sacramento going forward much more expeditiously with innovation centers. If you are an investor, why would you wait through a long and uncertain process when you can hit the ground running in an adjacent community? These communities might not have the Davis label, but they are much more ready to go.
The problems in Davis are not just Measure R. We saw the Hotel Conference Center sued and then downsized due to lack of investment funding. We have seen two other hotel projects sued and delayed. These aren’t innovation centers, but they would be huge revenue generators.
Lincoln40 is a housing project that would be ready to go, but for a lawsuit. And now Nishi is on hold despite the 60-40 vote, because of its lawsuit.
What is clear to me is that the only way we can do larger scale economic development is by getting through the land use battles first, before getting tenants and investors lined up. And then go through a more normal planning process.
My idea for a pre-approval of land has generated criticism, but most people I have spoken to have acknowledged it is not only the best way forward, it might be the only way forward. We will have to bite that bullet and pay the price for having that debate – but if we want to be able to compete regionally, a pre-approval seems the best way.
Whether we do it through a General Plan process or simply a vote of the people, it seems clear we need to do it. That is going to take the council to take some hits and put us on a process forward, and it is going to take robust community debate and possibly one or more failed votes in order to finally succeed.
—David M. Greenwald reporting
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“the Davis label”
Labels lose their magic, look at Levi’s….
“We saw the Hotel Conference Center sued and then downsized due to lack of investment funding. We have seen two other hotel projects sued and delayed. These aren’t innovation centers, but they would be huge revenue generators.”
And you can’t bring in tourist/visitor $ if you can’t put them up for a few days.
“the only way we can do larger scale economic development is by getting through the land use battles first,..And then go through a more normal planning process.”
If you can move this idea past the “Davis is just fine the way it is.” crowd. That may be a mountain too tall.
“if we want to be able to compete”
Am I channeling Tia this morning? Compete with whom/what? An alternative you seem to overlook is to simply allow the current deterioration of roads, etc. to continue and let Davis become the dusty fruit stand town that some, maybe most, seem to desire.
The way it is supposed to work is that citizens provide input into the general plan, then they participate on a planning commission, and the projects go through planning and staff makes their recommendations and the city council approved or rejects.
And those that want to complain and criticize all of this and the final approval can complain and criticize… and eventually they get over it and recognize that the world did not end and things are actually good and probably better.
Giving those complainers and criticizers the power to vote on the projects is a big dumb dumb move.
The slogan should be “Vote YES for Measure R to Keep Davis Crappy!”
One of the things that I truly hate about the Vanguard is its continued determination to leave out pertinent facts, despite being pointed out multiple times.
I guess if you repeat something often enough, (some) folks might accept statements at face value. (Or at least, that might be the hope.)
David had already noted (more than once) that UCD did not want innovation center traffic going through campus. That decision (from UCD) precluded an innovation center based upon the current traffic flow plan for Nishi.
On a related note, city finances would be much improved if UCD made financial contributions to offset its impacts on the city, as UC Santa Cruz does. (Also pointed out more than once, on this blog.)
“David had already noted (more than once) that UCD did not want innovation center traffic going through campus.”
I am not sure why that’s materially relevant.
“That decision (from UCD) precluded an innovation center based upon the current traffic flow plan for Nishi.”
It didn’t preclude an innovation center – they weren’t going to stop access. They simply preferred student housing there.
Would refer you back to your exact wording, regarding UCD’s preferences (for student-oriented housing only) at the site. UCD is one of the parties that must grant access, for the development to proceed as planned. Since UCD didn’t want innovation center traffic traveling through campus, it’s not likely they would have agreed to grant access for that purpose. (Of course, the railroad would also have to agree.)
At the least, this calls into question the reason that you put forth (cited above), regarding the abandonment of the innovation center component.
It is grade separated, so the railroad doesn’t give a rats arse.
“The way it is supposed to work”
“…supposed to work”? According to whose rules of order? There is the way things have traditionally been done. There is the way they are currently being blocked which utilizes a legal process, which some seem to like when it benefits them, but dislike when it does not. There are a number of different ways that planning could occur as opposed to what we have been doing as witnessed by the Opticos consultants and my meetings with a number of local developers on local projects.
But I am unfamiliar with who wrote the “rules” for how it is “supposed to work” and could do with clarification on whose rules you are citing.
David, you are putting the cart before the horse. Or to torture another metaphor, you are arguing for “build it and they will come.” The problem with your approach is that is all Supply Side Economics. You are channeling Reaganomics.
Your focus is solely on providing a supply of space for innovation companies to inhabit. The problem with that myopic approach is that it accomplishes nothing if there is not a similar (dare I say significantly higher) focus on generating demand for that innovation space.
Right now the wholly dysfunctional relationship between UCD and the City means the innovation spaced demand created each year by UCD’s intellectual capital engine leaves Davis. We need a focus on both innovation supply and demand if we are going to actually move forward.
I have had a lot of conversations in the last two months on the subject with a lot of different folks with expertise and most agree that unless you clear the land use hurdles, you will no longer get significant project proposals. I’m also failing to see the downside to the build it and they will come approach. Worst case scenario, no one comes in which case where are where we are now.
Waste of land and building resources? Had you said, “zone it and they are more likely to come”, that I buy… Kevin Costner does not live in Davis… Davis is not a “field of dreams”… as far as development is concerned, it is a “minefield“… with a lot of “bouncing betty’s”…
All the more reason to cut through the land use battles, I would say
David, you are looking at the problem through an “either-or” lens. The only way an innovation economy will hjappen in Davis is by pursuing “both-and.” Unless the deficiencies in both innovation economy demand and innovation economy supply are addressed, Davis will see occasional innovation successes like DMG and FMC and HM Clause and Aduro Laser and Marrone Bio Innovations and Calgene, but not a consistent string of successes.
JMO
No Matt. the way I’m viewing it is that one barrier to entry is lack of available land. I’m not stating that there are not other barriers. As someone pointed out to me, the problem isn’t “build it and they will come” but rather “if you don’t it, they won’t come.” I’m happy to sit down with you and lay out my full plan, you will clearly see that I fully appreciate the need for demand as well. But we can’t get to demand if the supply barrier is too high like it is now.
If that is not what you are saying David, then articulate your thoughts on all the barriers … loud and long in every article. The approach you are taking in this article leaves a very different impression, and does a disservice to any reader who doesn’t have the benefit of knowing what you believe the whole picture actually is.
With that said, can you point your readers to any of your past articles where you have discussed the need for demand and/or any of the other barriers? Sitting down and talking to me about your “full plan” is both single-threaded and meaningless. Sitting down and laying out the “full plan” for the readers of the Vanguard is both collectiver and meaningful.
When it’s ready to go public, I will.
My major point is that it does us no good to attempt to generate demand when we have no/ limited places to put folks.
There is clearly demand however, as pointed out elsewhere no less than five entities invested sizable amounts of money into economic development proposals in Davis – Hines, MRIC, Nishi, Fulcrum and Sierra Energy. They wouldn’t do that, unless they saw significant ROI. On the other hand, to the extent that three of those entities failed, it was because of land use hurdles.