Davis – In 2016, the Davis City Council put Nishi on the ballot. It was a good project that would add student housing while at the same time add 300,000 square feet of R&D space that the city desperately needed. But at the ballot box it fell short.
It lost primarily for two reasons. First, while I think there was a strong plan to deal with traffic on Richards including $10 million that would go to create a way for university traffic to bypass the Richards Tunnel, the voters were not quite convinced. There was little the city or developers could do about that issue.
However, the affordable housing issue was self-inflicted. No onsite affordable housing. The city did get $1 million in lieu fees but, as opponents correctly pointed out, that was a pittance compared to the amount a project of that size should generate.
In a close election, that issue lost the support of progressive voices otherwise concerned with the lack of student housing, and probably was just enough to create the 700-vote defeat.
That is the lesson of the last defeat of a Measure R project—take every issue off the table. There are issues that you cannot control, but remove the ones that you can.
The question that the city council now faces is whether they can do the same for DISC (Davis Innovation & Sustainability Campus).
There are intractable issues with DISC. It is a large project on the periphery. And, despite efforts at mitigation, those concerned with traffic on Mace will have plenty of reason to vote against the project.
Those will be thorny and contentious issues.
But perhaps not intractable.
As Greg Rowe pointed out in his comments on Wednesday, “I still have questions about the 24,000 trips per day, but the thing is that’s 20 to 25 years from now. To me there is time for the city, 
council, Caltrans and the Developer to figure that out.”
He is correct, but as with Nishi, the voters do not seem inclined to want to allow the process to work itself out down the line—they want more certainty. There is not much the project can do at this point, so the focus of the developers and the city should be on addressing what they can.
They did a good job of getting the issue of drainage off the table and, for the most part, they have addressed affordable housing with a commitment for a large onsite project.
But there is more that the city and developer have to do in the final two weeks.
First, get the issue of the 6.8-acre city-owned parcel off the table.
As Commissioner Emily Shandy put it, “I continue to struggle with the conservation easement on the Mace 25 parcel.” She noted that she heard a lot of justification for why it’s legal, but she said, “I have not really heard anything to help me understand why this is so important to this project that it is worth all of these circular conversations when, from where I am sitting, we have heard loud and clear from the community already that this is not how the Davis community wants that city land that was purchased with that funding to be used.”
She called it a “puzzling choice to be bickering over this six-acre easement.”
I agree. As Greg Rowe put it, “I still think the developer, if they want to get past the Measure R vote, they should really think seriously about taking those seven acres off the table.”
I went back and forth with planning staff on this issue—they are arguing planning principles. You can have the greatest planning in the world, but if you can’t get it past a vote, you have nothing.
Second, the issue of 60 percent housing filled by employees is not intractable. I don’t understand why this is such a big issue.
First of all, they can master lease some of the housing. That means if you have a big employer, they take out a lease and then sublease it to their employees. Perfectly legal. UC Davis does it all the time.
Second, you can make it so students are less likely to move in. I actually don’t have that much of a concern that students will move here—it’s a distance from campus and there will be other housing built that is much closer to campus. But it’s a political issue. So take the leasing off cycle and require people living there to pass credit checks.
Finally, the baseline features that require three bedrooms or less are unfortunate because it takes off the table the possibility of co-housing. Co-housing is a good way to, first of all, ensure that the workers are living onsite but also to improve affordability.
Bottom line—you won’t be able to ensure that people live and work onsite, but you can do more than you’re doing.
Third, listen to the recommendations of the Tree Commission and the Natural Resources Commission.
During the Planning Commission meeting I listened as staff was arguing that the issues of trees are something that are part of the building process, not the project baseline features. I get it. If this were an infill project, I would agree. But this is a Measure R vote. Draft up project baseline features to ensure that the concerns of the Tree Commission is met, while making it general enough that it doesn’t encumber build out.
The issue that appears to have the most potential to be the affordable housing issue of 2020 are the recommendations by the NRC. Here’s the thing: the project wants to tout itself as a great sustainability plan but right now it doesn’t even have support of the more pro-development elements of the NRC. That’s going to be a huge problem that will undermine a core message.
I asked which of the issues were considered deal-breakers, and was sent six.
First, all onsite commercial buildings shall be all-electric. Fossil fuels (e.g., natural gas, propane) shall only be allowed for manufacturing processes as specified by a tenant.
Second, In anticipation of improved solar connected energy storage, the project shall be designed and pre-wired for future microgrid capacity and energy storage.
Third, all commercial and residential parking areas shall be EV ready, equipped with infrastructure designed to facilitate installation of EV charging stations as demand grows.
Fourth, parking costs shall be unbundled from the cost of other goods and services. A separate fee shall be charged for all parking spaces (commercial and residential).
Five, to provide an opportunity for a car-free lifestyle, parking associated with multifamily rental housing will be unbundled. Multifamily rental units will be charged for parking separate from rent.
Six, the developer shall require employer master leasing of all rental housing and ownership of a portion of the single-family housing units and require employment for residency. These requirements shall be dependent upon a minimum firm size, to be designated by the City.
Of those six, I think the last one is the only one that should be in question.
Staff responded that “this request jeopardizes overall project feasibility and is more than the market will bear.” The NRC responds that “many Bay Area companies are master leasing for employee housing.”
I don’t know if I go as far as to require all rental housing to be master leased, but I agree, as mentioned above, that the issue of housing is vitally important and the city needs to go much further in addressing that.
Bottom line: this project is not going to be a slam dunk no matter what. But the developer, if they want a reasonable chance of the measure passing at the polls, needs to finish the process and take most of these issues of the table. I only really see one that could be a difficult lift.
—David M. Greenwald reporting
which is not how the applicant markets this. About cycling they say that it’s 10 min from Downtown and 15 from Campus, but it’s a few minutes longer and these are along 2nd St, which feels dangerous to many — the applicant has proposed zero modifications to the street. The safety route via Alhambra, 5th St and so on takes nearly twice as long… and perhaps 25 minutes to the western side of campus.
There’s also nothing concrete in regards to both Unitrans and Yolobus (Chair Essex mentioned this in her comments at the PC meeting).
Most car journeys in Davis and the region have “free” parking at one end. Employee parking can be indirectly and non-transparently-subsidized through higher pay.
Yes, people who don’t have access to cars will come here by bus. But that’s a single digit minority. That’s before considering what the pandemic will do to transit ridership in an unknown future with guarantee of widespread use of an effective vaccine. P&R with point-to-point buses is best solution, but there’s so much going against it. A train journey from the west with a dedicated shuttle might be convenient for some, but for people coming from the east they have to pass the project and then double back.
The applicant – at the last PC meeting – also said that services on-site will be deliberately kept at a minimum so that business is not leached from Downtown. This will mean a lot of car traffic to Downtown for lunches and other reasons.
The BTSSC was not menitoned by name at the last PC meeting, and no representative from the applicant – nor e.g. anyone from Fehr & Peers – was present at our June meeting last week when we sorted out our baseline features proposal. Transportation was not a significant topic at the PC meeting (though I believe that the other issues were important and deserve the disucssion that happened.)
The bottom line is that the applicant is still planning for thousands and thousands of car trips, with mostly wishing as a solution — staff adding the wondrous comment about an unknown future with transportation: Remember what many said just a couple years ago about how self-driving cars will change everything? You can barely find any cheerleaders at the moment.
Most important, perhaps, is that we still have no firm tenants, and an unclear picture on the future “commute” to the workplace, as detailed recently by Alan Pryor. Will this commmute be electronic, or by vehicle… or what mixture of both? Is this site truly needed for commercial activity?
If a site IS needed, why is the City so passive about e.g. the PG&E site? Staff mentioned that PG&E is not interested in moving…. well, make them interested! As I have said many times in these “pages” for years, the Mace Curve area is a better site for highway access (and there are likely others in the immediate region). The PG&E site is huge – if the current single-story light industrial at its northeast corner is also re-developed, with great access to South Davis via Pole Line by bike or bus, a few minutes to the Depot, nearly adjacent to Downtown… we can us our imaginations a bit and realize that it can be aggregated with similar “innovation” uses both on 2nd St and across I-80, connecting by a new bridge for peds, bikes and light self-driving shuttles. Add to this new housing on / above the many large parking lots around town – shopping centers and some churches – and in-fill makes a lot more sense.
They have tried many times on PG&E. PG&E won’t part with it. Even facing bankruptcy and the like. Plus it’s only about 45 acres or so, not nearly large enough for what the city is looking for.
The city would be wise to not count on this being approved.
Maybe they’d better have a “Plan B”.
And next time, avoid getting themselves into fiscal challenges (just like every other city, county, and the state itself). I don’t have much faith in that, given the track record around the state (and now, coupled with coronavirus).
I don’t think there is a plan B. I don’t see another spot for it to go at this point.
There are many reasons why it is a non-starter for pg&e… proximity to the Davis electrical substation… location of the major gas lines serving Davis…
You have to look underground, and in in the soil… understand the PCB’s used to be used in transformers… and failed one’s went to their corp yard, and stored, prior to final, appropriate disposal… AC and PCC may seem to be ‘impervious’ surfaces, but not to PCB leakage.
As far as I know, there have been no Phase 1 or Phase 2 site assessments done… at least none in the ‘public realm’… any potential developer had darn well demand those prior to entering into negotiations for acquisition of the property… pretty sure PG&E knows that, very well…
As a neighboring property owner, I just received a letter from the Central Valley Regional Water Quality Control Board about a remediation project to treat the groundwater for PCE “at seventeen locations at the Site” of the PG&E Davis Service Center.
“Subsurface investigation results” also indicated presence of DCA, DCE, MTBE, TPH-g, and TCA.
Don’t hold your breath on this site becoming available for development anytime in your lifetime.
I didn’t have the full list of ‘compounds of interest’, but I have no doubt the list you got is much more thorough…
Any change you could e-mail me a copy of that letter, or e-mail me a link to their site on that? Professional interest…
For closure… Don sent the letter to me… thanks, Don…
I’d also like to receive a copy of that letter. It’s sad. This is first concrete information I’ve ever heard about this phantom menace.
Sent.
Todd… if you go back, you’ll see I’ve been talking about this for years… just not in the level of detail that has now come out… The state is confirming, and elaborated on what City staff knew/suspected 15-20 years ago… but no one wanted to hear it from professional staff (or, as they often saw it, because it didn’t fit with their politics/fantasies, ‘staph’)… enough said.
Except many folk are two dimensional… aerials or maps… others think in three dimensions, and often, four (time)…
Sure – and now that I’ve seen the letter and seen the technical details – thanks, Don! – I see that there’s been formal stuff going on on the PG&E side for at least a decade.
But more recently why wasn’t the remediation process mentioned by Staff at the PC meeting when a discussion with PG&E was referred to? And based on the letter itself the remediation to at least commercial/industrial standards seems possible (but with no date by when this could happen) and the return to e.g. housing standards is not described as impossible (but again.. how much time is involved?). In other words, it seems like the site could be something else in the allowed sense.
But going up a level in the soil of all of this, so to speak, why exactly does PG&E not want to move? Is it about a goal for zero chance of liability as a pre-condition… or – ironically (?) – do the employees like the location because it’s quick cycling distance to Downtown and walking distance to a well-considered (floral) nursery?
There are several substations around Davis (there’s a bigger one connecting UCD just south of I-80), and proximity to one isn’t particularly important. But the more important role is servicing the gas lines in Sacramento (Davis is chump change.)Remember that SMUD serves electrical loads there so PG&E doesn’t have much on site there. So having better access to the Causeway is important.
That’s not what I was referring to, although I think the rest of Todd’s comment is spot-on.
It could be that Davis just won’t be able to rely-upon a “car-centric” (as one planning commissioner described it) business park, outside of a logical boundary for the city. Maybe there’s reasons that they keep failing.
And may not even be feasible beyond the first couple of phases (when the housing is built). Spreading out the phasing of the housing is one of the commission recommendations (actually, from a couple of the commissions, as I recall).
Maybe the city (as well as every other city and county in the state) should start-off by explaining how they keep getting themselves into fiscal challenges.
By the way, has anyone “tallied-up” all of the land that wouldn’t be available for commercial development, as a result of the housing? (Including the park site, etc.?) Or, will otherwise impact the use for commercial development, by being adjacent to housing?
A big factor is that the city is pulling in less than half the per capita retail sales than other comparable cities. But hey we don’t want to talk about that.
If one really wants to do an accurate comparison, you would look at per capita net fiscal deficits.
Revenue doesn’t matter, if expenses are allowed to outpace them. (One of the results of Proposition 13, which limited revenue but not expenses.)
Regardless, if you’re concerned about retail, the city has been proposing the conversion of its only retail mall into primarily another megadorm, rather than looking at ways to maximize revenue from that.
But, it is almost amusing to watch the developer and city “scramble” at the last minute to either ignore, or half-ass accommodate some of the drastic changes proposed by various commissions. Despite having more than a decade to work this out.
Not that it will score any points on these pages, but let’s not forget the majority of Vanguard’s readership – and almost all its posters (except maybe for Jeff) – have no responsibilities to be collecting any sales taxes from your customers in connection with your chosen calling.
I call that a distinction worth noting – as we migrate deeper into the realm of unfunded municipal operating budgets.
Gee, why is it that only “merchants”, “shop keepers” and “restaurateurs” are charged with the responsibility of collecting necessary revenues to pay for basic city services – enjoyed by all.
Not only are sales taxes the most regressive form of taxation, but Why is it that the “winners” in an increasingly “services based” economy have so aggressively sought to slough off any responsibility for helping their communities keep revenues in line with expenses? Attorneys, doctors, accountants, financial advisors, engineers, scientists, agriculturalists, consultants, teachers and educators, personal services providers, computer programmers……..the list is long and growing longer.
Maybe someone would care to share their explanation as to why this outmoded model of municipal revenue generation has remained static for the past century as the economy has continued to diversified away from its roots in urban retail? Where is our highly vocal, progressive leadership on this issue.
I don’t know what you mean by “my” (or for that matter “Jeff’s”) chosen “anything”, but the rest of your post is worth noting.
The reality is that we want top notch city services without paying for them. In that sense, Davis really is similar to other places. In the longer term something is going to have to give. We’ll have to see what that is.
Given what I see (on a broader level – beyond Davis), the thing that’s going to have to “give” are overly-generous retirement benefits (including full medical coverage, which for some reason keeps rising exponentially). For retirees who keep living longer (and perhaps comment on blogs for decades afterward).
Taxpayers are no longer paying (directly) for government services.
But, I was surprised that they were still willing to raise teacher salaries (and ultimately – resulting retirement benefits).
At this point I think I’m the only one who posts regularly here who directly collects sales tax in Davis. I’ve often felt that professional services should be taxed.
Another thing that might have to “give” (in my opinion) is government-subsidized housing, and related subsidies.
Since much of this is tax-exempt (and actually adds to fiscal costs), there is likely a limit to how much a given city can support.
Unless we start “taxing the rich” (whoever they are).
David wrote:
Beg to differ, but Davis is actually quite different than most “top notch cities” – in that the majority would have long ago recognized the relationship between ongoing sources of operating revenues and their relationship to maintenance of a balanced budget – and had actively taken strategic steps to foster increasing revenues without resort to simply raising taxes on the local populace.
Meanwhile, Davis actively chooses to disregard the relationship and balance between locally generated commerce and municipal revenue generation – as if the discussion is somehow not relevant to its future fiscal condition.
Hence the absence of anything resembling a Business & Economic Development Commission.
As a professional consultant who would have to collect those sales taxes, I AGREE with Doby and Don that the current system is CRAZY! Yes, sales tax on all of those services (and in fact, maybe we drop sales taxes for physical goods!) Would be much more progressive taxation.
We’re happy to talk about it. We’ve talked about it many times over the years. Where would you like the new retail businesses to be located?
And too much of those retail sales are from cars, which are on the precipice and dealership sales are likely to fall with increased EVs because EVs require much less servicing (where dealers make their real money.)
Not wishing harm to any of the auto dealers, but if they were to fail that would open up some retail opportunities for the city. They occupy some prime real estate for various retail categories.
Note that that list of 6 items is for the built environment (although the parking requirements would impact transportation). There’s a separate list for TDM issues that the Staff completely dismissed as unneeded until tenants start proposing individual projects.
Maybe because staff had not received notification? Should the City have spread “rumors”?
Until recently, it was between PG&E and the regional board… neither had any obligation to notify the City. Now that the process has progressed, notification begins. With comment period(s). The City is free to comment, and/or ask questions/preferences as to scope of work, concerns, etc. As do the notified property owners, and any member of the public.
A ‘work in process’… (no typo)
Oh… and thank you, Todd, for adding the ‘summary’ cite/site…
The explanation is simple: inertia. Requiring businesses that have never had to collect sales taxes to begin doing so adds complexity and thus cost to their business models, as well as suppressing marginal demand. So it’s understandable that businesses would resist the change.
And the reality of imposing a sales tax on services is also complicated by the nature of the political process that would be necessary to implement the change. As soon as one potent lobbying group (e.g. attorneys) convinces the legislature to exempt their profession, all other service businesses cry foul and start clamoring for their own exemption. Pretty soon the idea of treating all service businesses equally flies out the door.
I’ve lost track of the legislative efforts to accomplish a service tax. I know it’s been proposed recently, but did it ever get implemented in some form? I certainly haven’t been collecting any taxes on my services, and I suspect that the state wouldn’t let me go very long before reminding me of my obligation to do so if I had one.
I think the last attempt, which would have had businesses pay a tax on services purchased, died in committee in 2018.
Haha! Jim, I’m sure your right on that last point.
This year, in particular, has me asking the question because the “traditional, old retail sales based model for encouraging new magnet retail as a strategy to enhance local municipal revenues” seems it may have largely run its course – unless we’re talking about new Amazon fulfillment centers – where that model is still on fire.
So what’s next? Between the rancherias, with their gaming tables, and more recently with fruit of the low hanging cannabis bush – we’ve significantly expanded the sin tax categories as new sources of tax revenue. Transient occupancy taxes depend upon the arrival of more visitors and hopefully that category will soon recover.
People keep talking about new “experiential venues” as the next big thing. But how does a municipality monetize such activities (particularly if they are replacing a former bricks and mortar retailer or restaurant)?
Looking down the road this year and next, our states, cities and schools, will all be in desperate search for new sources of revenue. Higher localized sales taxes are not the answer – for they burden primarily the local populace and place even greater pressure on struggling bricks and mortar retail. The same is largely true for the split role proposals – as those costs pass on directly to those same occupants. Taxing the rich – while satisfying to some – is resulting in a measurable exodus of the wealthy to other states.
Neither increased local sales, nor increased property tax rates will encourage increased new local investment. Rather, they serve only as disincentives.
It’s why I suggest maybe it’s time to discuss implementation of a modest “state level” services tax with the associated revenues flowing directly to the local municipality in which those businesses are located. Similar to the local component of our existing “state level sales tax”. Particularly in recognition of the “per transaction” size of many service contracts – this could be as little as 1% to 2% of gross transaction value. Or perhaps a sliding scale where very large transaction values might only be taxed at 0.5%.
Yes, it could result in large, national professional services firms transferring accounts out of state – but its’ hard to imagine the state’s largest law and accounting firms closing up their local offices to avoid such cost. Perhaps leadership on this discussion is needed at the national level for a new, baseline national Covid 19 “State level surtax” to get things rolling – but keep federal and state hands “out of the administration” – merely acting as conduits to local jurisdictions based on the value of local transactions conducted.
From a development standpoint, such a move could make it fiscally attractive to local City Planners who succeed in landing new = often well-paying – “services” based employers, affording local competition (between communities) for such developments and providing a new tools of the trade for local community planners.