Going back to last week’s discussion of available land in the city, my analysis is that once we look at what’s available at the ground level, we don’t have anywhere near 40 to 60 years’ worth. While we have pushed the notion of a peripheral innovation center for several years now, the reality is that if MRIC (Mace Ranch Innovation Center) is not going to go forward, the city will have to figure out a way to zone land it needs for economic development – in some form or another.
That is probably a discussion the council will have to have once staff comes back with a more granular analysis of the land.
But here’s a point worth noting – on Tuesday, a public commenter pointed out that the EPS (Economic & Planning Systems, Inc.) Site Evaluation for 3820 Chiles concluded that the city has 40 to 60 years of land for R&D Development.
He told council during public comment, “There is an abundance of land already zoned for and better located for a business park.” He noted that, on a stretch, “there are already 20 acres of office/ R&D land. Without counting the land for this project, EPS estimates that there is a 40 to 65 year supply of vacant land in the city suitable for R&D and flexspace use. Twelve to 20 years of that is regarded as shovel-ready.”
The first problem with this analysis is that EPS appears to have simply taken the city’s estimate from 2015 of 156 acres and estimated how long that would take at current rates of growth to build out.
There are a lot of problems with doing it that way. Granted, the city’s initial analysis looked only at vacant parcels that are currently zoned for commercial uses. That means that any parcels that are currently developed but either unused (there are a few on Second Street) or underutilized would not count.
It also doesn’t take into account, for instance, our report on the 15-acre parcel on Chiles and Cowell, that Jim Gray believes will not be developed any time in the near future.
There are differing opinions on the Frontier Fertilizer site, with some believing development there is at least 20 years off while others believe it might be usable a good deal sooner.
How much land is there that we can develop commercially? A lot of that depends on the use. There are a few parcels that could be developed that are 6 to 10 acres, but a lot of the 27 parcels identified by the city are quite small.
EPS itself that did the evaluation of 3820 Chiles Road – a property that is not vacant, but has an existing structure formerly used by the university – and questioned the commercial viability of that size, which was over 6 acres.
They write that “one reason the site is not viable for office/R&D/Flex development is that it is not located in a larger innovation or research park or district, such as the Interland Research Park (Now University Research Park) or along 2nd Street. The City will be better able to attract new office/R&D/Flex users in available space in these existing or new innovation park/ districts.”
The key is that most commercial interests “are simply not interested in developing a 5 to 7 acre site for R&D.”
But there is a second factor here with the EPS estimate of a 40-60 years’ supply of property. On page 12 of the report, they write “it is estimated the City has an approximately 43 to 63 [years’] supply of vacant land for future office and R&D/ Flex Development.”
While some have simply stopped reading there, we can look further. The assumptions upon which that estimate is based are limited. They are assuming that we will continue to average 39,000 square feet annually, or about 2.2 to 3.7 acres a year.
Putting those numbers into perspective is helpful.
Mori Seiki by itself added 185,000 square feet and Nugget, which is moving into a business park in Mace Ranch, is adding 65,000 square feet, itself nearly doubling the estimated annual build out.
Those numbers help us reach an alternative conclusion. The conclusion is that the critics are right – if the city continues with its current rate of build out, its current trajectory of economic development, then even with the limited amount of space available in the city, we could survive for the next 40 to 60 years with the current portfolio.
As we have pointed out a number of times – the current trajectory is not sufficient. We have over the years shown that our per capita retail sales are far below both other communities in the region and also comparable college towns in California.
Our lack of economic development and commercial development along with other factors has strained our budget, which is why, in 2010, we evaluated the viability of economic development in the form of Innovation Centers.
When Studio 30, now nearly a decade ago, looked at a similar prognosis, they recommended the city pursue a “Dispersed Innovation Strategy.” They concluded: “The current isolated and dispersed sites that are available and appropriately zoned are not adequate in terms of size, location, or configuration (and related constraints) to address the emerging market need of an Innovation Center.”
Unlike the current average absorption of 39,000 square feet, they estimated in 2010 that Davis could absorb up to 100,000 square feet per year. They estimated that Davis needed at least 200 acres of land for business development so it could accommodate around a 20-25 year time horizon (MRIC is estimated at 2.4 million square feet, so it would take 24 years to build out at the projected rate).
We have up to this point focused heavily on supply. There are good reasons for doing so, as supply is limiting our ability to attract new commercial efforts.
However, what becomes obvious as we look at the differential between the EPS report’s projection of 39,000 square feet per year and the Studio 30’s estimation that the city could absorb 100,000 square feet per year is that we need a strategy and mechanism to get there.
The city was positioned a few years ago to make those kind of moves, but for the last several years, economic development has dropped off the front burner – innovation centers were put on hold or moved to other cities entirely. With the new focus on the city manager and new hires, the city is once again positioning itself for a major push to attract and retain new companies – but it needs the facilities and the tools to do so.
—David M. Greenwald reporting
Greenwald: since you are a neophyte to this, here’s a hint: you don’t make long-term land availability determinations based on short-term property owner statements. Your analysis is invalid.
Other than the intention of throwing a cheap shot at David (again), I’m lost as to your point. Do you think we have enough commercially available land to do economic development? I don’t see any way that we do. Perhaps you can get off your personal shots and stick to the issues.
David, I’d like to point out that I suspect that this article written by you does not comply with the spirit of (and possibly even the letter of) of the Vanguard’s anonymous poster policy when the article says “But here’s a point worth noting – on Tuesday, a public commenter pointed out that” I haven’t viewed the video of the Council meeting, but I suspect that the commenter started his/her comment at the Council Chambers podium by stating his/her name. That is a matter of public record, which begs the question, “Why has the Vanguard chosen to cloak the text comment with anonymity of the commenter?”
On December 30th the Vanguard explained its new policy regarding anonymity with the following statements,
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If you are going to expect your commenters to eliminate inherent asymmetry, then you need to follow the same rules. Otherwise you are talking the talk. but not walking the walk.
JMO
David Greenwald said . . . When Studio 30, now nearly a decade ago, looked at a similar prognosis, they recommended the city pursue a “Dispersed Innovation Strategy.” They concluded: “The current isolated and dispersed sites that are available and appropriately zoned are not adequate in terms of size, location, or configuration (and related constraints) to address the emerging market need of an Innovation Center.”
Unlike the current average absorption of 39,000 square feet, they estimated in 2010 that Davis could absorb up to 100,000 square feet per year.
Again this article only focuses on the Supply side of the commercial space Supply/Demand curve in Davis. David calls into question the EPS Demand absorption calculation of 39,000, and simultaneously argues that the Studio 30 calculation of 100,000 is a superior number.
That is a pair of sweeping conclusions, and the readers of this Vanguard article have no way to assess whether either number is correct. Two questions rise to mind …
— What is the year-by-year historical makeup of the EPS 39,000 square feet per year number?
— What is missing from that 39,000 square feet per year history that would account for an additional 61,000 square feet per year of commercial space Demand?
“David calls into question the EPS Demand absorption calculation of 39,000, and simultaneously argues that the Studio 30 calculation of 100,000 is a superior number.”
That misrepresents the point made here. The 39,000 would appear to be the historic absorption rate. The 100,000 appears to be the Studio 30 projection of what the city could absorb. It’s not a fact-based number instead it is aspirational. Not really the sweeping conclusion that you think it is.
Still disagree on the supply/ demand issue. Without supply, it is hard to generate demand. This isn’t chicken or the egg. Companies that move to a new location want a place they can move into without going through a five year entitlement process and uncertain outcomes.
Bingo.
This comment from Jan 6 nicely sums up the situation.
https://davisvanguard.org/2019/01/my-view-inventory-of-commercial-sites-illustrates-the-need-for-peripheral-innovation-center/#comment-402086
Craig and Don are looking at life as if it were a one-way street, and everything about it is only decided in either/or terms. Reality accommodates two-way streets as well as both/and decision processes.
Craig says that 39,000 is the REAL historic absorption rate, and that 100, 000 is an “aspirational” “projection.”
Bob Leland when presenting the Long-Range Forecast Model to City Council started his presentation by saying, “Projections are only as good as the assumptions underlying those projections.”
If our community is going to avoid,
(1) a recurring (dare I say never-ending) stream of “He said, She said” yammering sessions like we have experienced over and over and over during the past four years, and
(2) the multi-million dollar annual budget shortfalls, and
(3) the continual deterioration of Davis streets,
then the advocates for jumping the Mace Curve with an innovation center need to provide more than pixie dust, which is what an “aspirational projection” really is, especially an aspirational projection with no explanation of its underlying assumptions.
Those advocates need to stop stonewalling when they are asked for some detail about how realistic the “up to 100,000 square foot per year” aspirational plan is.
Is it “50,000 square feet per year” realistic?
Is it “75,000 square feet per year” realistic?
Is it “39,000 square feet per year” realistic?
The only way for our community to know the answer to those fundamental planning and voting questions is to get (and share) a better understanding of how Studio 30 arrived at that “up to 100,000 square feet per year” Demand projection.
If that community understanding step isn’t taken, then all the advocates are doing is loudly trumpeting the words “Trust Us” and those two words are more of a red flag than a confidence-builder.
As Will Arnold said during Council deliberation about redevelopment in September, “My biggest question I think is the biggest question that remains for everyone – how do we get from here to there? That seems always to be the central question when we do these type of plans.”
Addressing the very basic questions about commercial space Demand in Davis will provide an intellectually robust answer to Will’s “how do we get from here to there” question. Failing to address those very basic questions will be channeling the behavior of ostriches when they try and hide by putting their heads in the sand.
Although I doubt it was his intention, the comment Don Shor provided is very illuminating regarding the potential demand for commercial space in Davis. Jim Wallis, the commenter is the CEO of Hygieia Biological Laboratories. The website for his very interesting company is http://www.hygieialabs.com/ Gee, maybe getting some understanding about commercial space Demand isn’t all that difficult after all. It is time to walk the walk, not just talk the talk.
Hello Matt,
Is your disagreement on commercial development mostly on risk taking and not the composition? So if the city can get commercial areas developed without spending a dime, then you will have no problem (?).
An argument against commercial development can be done based on composition (i.e. they don’t want more people in town. They don’t want more cars to show up, they don’t want more houses, they want to keep Davis small. According to your comment, these were not your reasons. Your reason was about the city taking financial risks, that the city has to invest on something that may not have a return. Is this correct?Can we fix such problem not by voting, but by crowd funding or crowd ownership? Just propose the development proposal and let whoever willing to invest take the risk (and reap the primary benefits as investors). Then the city is not taking the risk (but still collects taxes from those businesses) and not forcing every voter to take the bulk of the risk. Would that resolve all of your concerns?
Then we are left with the issue of those who would oppose due to a change in composition.
Edgar, I am not at all opposed to commercial development. In fact I strongly support it. The problem/challenge I see is a process/disclosure/public education one.
For example, Mark West (and others) has called for a reduction of the fiscal burden on developers as a way to reduce the impediments to getting development done. On the other hand, Alan Pryor (and others) argued that the West Davis Active Adult Community (WDAAC) was given “special discounts” on standard City of Davis fees. Then the community polarization and yammering starts with both sides launching barrages of verbal grenades and mortar shells at one another. The average City of Davis citizen/businessman/tax payer/voter gets no real education on what actually has happened, or what the fiscal rationale is for whatever has been done or is being considered. That is not constructive communication.
I have no problem at all with the City and/or the community taking financial risks … as long as they are informed risks and the information about (analysis of) the risks is brought to the public as robust education.
Phil Coleman illuminated this problem clearly in his November 18 comment when he said
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What Phil is calling for in his comment is community dialogue. That is what I am calling for … community education that produces constructive community dialogue rather than polarized yammering.
I’ll start here: “Then the community polarization and yammering starts with both sides launching barrages of verbal grenades and mortar shells at one another.”
Do you believe there is a reasonable way to avoid that? Because I don’t. I think the active and engaged portion of the community is polarized on these issues as we saw from Nishi and WDAAC and I’m not sure there is really a way to avoid that.
“If our community is going to avoid”
To me this part of the problem – the community isn’t going avoid… It doesn’t matter if we have a clear process with clear metrics or if the process if fuzzier – there will be a segment of the population pushing for a given proposal and another segment pushing back. As we saw with both projects last year, that portion of the population pushing back was relatively small, but still created a lot of noise. If that is the goal of all this – I think you’re moving into the wrong path.
Yes David, I absolutely do. You need look no further than the robust education effort the City provided its citizens leading up to the March 2013 Measure I vote regarding the Water Project. There was plenty of opposition coming from the poles, and absent that education initiative, polarized yammering would have happened … but it did not.
Bob Fung and I were talking last week and he made the point that active and engaged population in Davis is no more than 5% of the total … less than 3,500 out of 70,000. I have always used a number between 10% and 20%, but when you think about the names of the people you know who are active and engaged, 3,500 actually is a very reasonable upper bound.
The key to whether the community as a whole sinks into yammering is determined by then 95%, not the 5%. If the only option for the 95% to become informed is the 5%, then your model is correct, but if the 95% have access to well constructed education from arguably neutral sources the way that they did in Water Measure I, then the yammering only comes from the 5%.
Matt – are you kidding? There was plenty of polarized yammering in March 2013, there was a lawsuit, the rates were partially reversed, your take does not comport with what happened in that campaign.
WDAAC did a pretty good job of crafting a message and educating the 95% about that message. The yammering in the WDAAC battles was limited to the 5% … one could even argue that it was only a small portion of the 5%.
Nishi is a different story. Traffic on Richards and through then tunnel. Relocation of Murder Burger. No Affordable Housing. Questions about Agricultural Mitigation commitments. Those were all issues that clearly engaged the 95%, and the Nishi development/campaign team chose to ignore those issues and stonewall any efforts to educate the 95% about those issues. Two years later they abandoned the failed “Damn the Torpedoes!” approach and conducted education on the salient features and challenges that their revised proposal faced. As a result the yammering never proliferated in the 95%.
So that brings us to MRIC. What education has been conducted for the 95% on MRIC?
The lack of any educational efforts leaves us without answers to the same questions I asked Don earlier … the challenge that MRIC poses is two-fold.
(1) Can a 220 acre business park be considered to be “small”?
(2a) Will MRIC include housing?
(2b) If the answer to (2a) is “yes” then will the housing be designed/integrated into MRIC so that it clearly is more useful/attractive for the MRIC workers so that they do not have to drive to work? I’ve included below a graphic example of that kind of side-by-side live/work design from the Kettner District in San Diego.
Those are questions that I believe are important to the 95%.
How is that any different from Nishi or WDAAC? I really don’t see that you have a point here.
WDAAC did a pretty good job of crafting a message and educating the 95% about that message. The yammering in the WDAAC battles was limited to the 5% … one could even argue that it was only a small portion of the 5%.
Nishi is a different story. Traffic on Richards and through then tunnel. Relocation of Murder Burger. No Affordable Housing. Questions about Agricultural Mitigation commitments. Those were all issues that clearly engaged the 95%, and the Nishi development/campaign team chose to ignore those issues and stonewall any efforts to educate the 95% about those issues. Two years later they abandoned the failed “Damn the Torpedoes!” approach and conducted education on the salient features and challenges that their revised proposal faced. As a result the yammering never proliferated in the 95%.
So that brings us to MRIC. What education has been conducted for the 95% on MRIC?
The lack of any educational efforts leaves us without answers to the same questions I asked Don earlier … the challenge that MRIC poses is two-fold.
(1) Can a 220 acre business park be considered to be “small”?
(2a) Will MRIC include housing?
(2b) If the answer to (2a) is “yes” then will the housing be designed/integrated into MRIC so that it clearly is more useful/attractive for the MRIC workers so that they do not have to drive to work? I’ve included below a graphic example of that kind of side-by-side live/work design from the Kettner District in San Diego.
Those are questions that I believe are important to the 95%.
I think the average person is going to weigh: (1) will this add to my traffic and (2) will this harm my home value. What we learned last year is if it doesn’t impact people personally, their default is yes rather than no.
Okay Craig, I’ll bite.
1) How will MRIC increase existing home values?
2) Until we hear about any traffic mitigation measures associated with MRIC, everyone who lives in the East Davis Covell Blvd corridor from The Cannery to I-80 will be affected by the addition of MRIC traffic at the current bottleneck from the Alhambra Blvd- Mace intersection to the Chiles Roadi Mace intersection. Do you agree?
Increase home value
Traffic on Mace will likely increase
Limited near neighbors
Okay Craig, I’ll bite.
1) How will MRIC increase existing home values?
2) Until we hear about any traffic mitigation measures associated with MRIC, everyone who lives in the East Davis Covell Blvd corridor from The Cannery to I-80 will be affected by the addition of MRIC traffic at the current bottleneck from the Alhambra Blvd- Mace intersection to the Chiles Roadi Mace intersection. Do you agree?
You’re adding thousands of employees – that’s demand for housing. You’re also adding income and capital. All of that will increase home values.
Don’t agree on your second point, I think the traffic impacts will be very localized but Mace-I80 interchanged is already congested. The one big advantage you have is that the innovation park will build out over 20-50 years, giving time to adjust traffic impacts. They can reduce traffic by utilizing the train and probably have an alternative route onto the country roads which could be improved to reduce the impact on Mace. As we know with Nishi 1.0, the fear of traffic was a factor.
That is a 40,000 foot answer. Let’s try and get a bit more specific.
You are adding those “thousands of employees” over the same 20-50 year build-out. If thousands are 2,000 then that means between 40 and 100 employees added per year. If thousands are 4,000 then that means between 80 and 200 employees added per year.
How many thousands is it? Are annual additions to housing demand in Davis of that magnitude going to actually affect housing prices in any meaningful way?
Your traffic answer is interesting and good food for thought and community education/dialogue. For example, if MRIC workers come to Davis on the train, they still have to navigate the 3.5+ miles from the AMTRAK Station to MRIC. County roads are indeed an option. It will be interesting to see the traffic circulation plan when the updated/renewed application is delivered to the City. You are right when you say, “As we know with Nishi 1.0, the fear of traffic was a factor.”
When we wanted to open a garden center, we needed a vacant lot with utilities provided, zoned appropriately. In the absence of such property, we would not have been able to open the garden center. We had a couple of sites to choose from at that time. Each had advantages and drawbacks. But we certainly did not want to repurpose an existing site, as that has costs and delays that can’t be readily anticipated.
If there hadn’t been any sites, we wouldn’t have been able to open. That is the basis of my focus on the supply side of the equation.
We did experience a number of delays due to the city’s process at the time, which entailed design review and numerous objections put forth by city staff. Those delayed us by several months. A city that wants businesses makes that desire clear, to those who seek to locate there, by how they process the applications and in the nature of the impediments they create or remove.
We can spend a lot of time debating what the demand might be for businesses to locate in Davis if there is a sufficiency of sites available. But I don’t think anybody questions that there is sufficient demand to fill a small business park. If they do question the demand, I’m sure there are folks on the city staff and others active in the business community who can give them a sufficiency of anecdotes to persuade them. If they aren’t persuasible, then no amount of continued conjecture on the topic of demand will serve any purpose other than continued delay.
We’ve been discussing economic development with peripheral business parks since about 2009, if I recall. Do we need another decade of talk? Or shall we just go ahead and develop a business park so these entrepreneurs can start moving in?
Exactly
Don Shor said . . . But I don’t think anybody questions that there is sufficient demand to fill a small business park.
I personally do not disagree with Don’s statement above. The challenge that MRIC poses is two-fold.
(1) Can a 220 acre business park be considered to be “small”?
(2a) Will MRIC include housing?
(2b) If the answer to (2a) is “yes” then will the housing be designed/integrated into MRIC so that it clearly is more useful/attractive for the MRIC workers so that they do not have to drive to work? I’ve included below a graphic example of that kind of side-by-side live/work design from the Kettner District in San Diego.
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And Don, the 5% of the community who are actively engaged have been discussing economic development with peripheral business parks since about 2009, but the 95% have been non-participatory on the sidelines.
Most of those who make up Matt’s 5% are ignorant but think they are experts. The 95% don’t care about the discussion and only want the streets paved and the bills paid. The community has spent the last decade or more trying to engage the voters on the topic of economic development and the community has responded with a wide yawn. We have had the conversation. Now it is time for our elected representatives and professional staff to start implementing. The first step should be to entitle more land for commercial development. 200 acres sounds like a good place to start.
I don’t know if they want the streets paved or the bills paid. They don’t want it to impact their lives – traffic, visual impacts, home value.
My concerns with housing at MRIC:
1. I’m skeptical that there’s a practical way to limit purchase or occupancy to MRIC employees. Even if a legal way is available initially, I think it would break down over time with turnover.
2. Absent a limitation, the housing would quickly be absorbed into the generic housing stock.
3. The location is valuable for comnercial use due to freeway proximity. It’s not very attractive for housing, except that housing is so scarce in Davis.
4. The kind of live-work housing in Matt’s photo is attractive when it’s near vibrant urban life, not so much in a business park on the far edge of town. Except that any housing is in high demand these days.
I’ve said before that I wouldn’t consider supporting any housing at MRIC. I’ve softened that stance, but I remain seriously skeptical about it. And I’m still aware of the statement made by an MRIC consultant that the market can’t absorb 200 acres of business park here.
About limiting purchase or occupancy to MRIC employees:
Would it make sense if all housing units are rental units and employment at MRIC is required for renewal unless the vacancy rate is above a certain threshold?
There are some ways that could be done:
1. Time the opening of housing with the roll out of businesses
2. Allow employers to own the housing or lease the housing and sublease to employees
3. If it is rental – rent it off cycle from the student cycle – a January/ March move in date
4. Require all renters to pass credit checks
I’m not suggesting any of these, simply putting them forward as options to address the point Jim raised