By Benjamin Wynd
Davis, CA – One of the biggest challenges facing Davis and its quest for economic development is the lack of commercial space suitable for high tech and lab space.
The Vanguard spoke this week with Tim Keller, an experienced entrepreneur who has been starting companies for a large portion of his adult life. When starting a company in 2008, he found Davis lacked any feasible space to house his business. Keller was in turn pushed to commute to another location where his company was then based, a story too common for this town. He started Inventopia, a non-profit, in order to help startup companies find space in Davis and remain here. His professional experience and observation of a myriad of startups leaving Davis has given him personal reason to provide strong support for DiSC.
What types of jobs and talent would you like to see DiSC provide or maintain?
DiSC will not “provide” any talent of course. But it will allow the jobs that utilize UC Davis—generated talent—to be located here, and will allow the city to reap the economic benefits of those jobs being located here.
As to what kind—you just need to look at the kinds of companies that have set up operations here: Life science companies, plant and crop science, robotics and automation, food tech and pharma. These are the strong points of UC Davis academically and it is why the companies that you see setting up shop here in Davis choose to do so.
Keller adds that Davis shouldn’t be compared to Silicon Valley. He emphasizes the amount of Life Science talent in Davis should be uplifted, while Silicon Valley largely focuses more on talent in technology. 
Would you say space in Davis is being utilized well? Where in Davis is there room for improvement, and where is a good example of used space?
No, Davis should be far denser. It is ironic that in the process for considering new developments in Davis that so much emphasis is always placed on preserving “open space.” Density of development is what makes cities “green,” it makes it possible to support transit, and density also makes it possible to set up small retail outlets throughout the city so that basic grocery, dining and cafe’s are within walking distance of people’s homes and offices. We need to stop talking about “open space” and start focusing on higher-density mixed-use space throughout the city.
How will DiSC help the city of Davis function/change how the city operates?
Davis has been “leaking” extremely valuable companies for decades now. Because we have a lack of commercial space, a lot of companies set up shop in Woodland, west sac, or elsewhere. These are companies founded by Davis residents—and those residents are forced to commute out of Davis to work. (By the way, I lived this story myself personally with my last company.) If we can keep those companies here, it means less vehicle miles for Davis residents, it keeps those people here going to our restaurants, etc., and the sales taxes that those companies eventually pay will ALSO make their way into local coffers.
Keller also told additional stories of other companies that were lost to West Sacramento and Sacramento itself. Origin Materials, he said, is a classic example of this “leaking.” He explained that they went public, had a billion dollar evaluation, and went to West Sacramento because there was a lack of commercial space in Davis.
Is there anything the managers of DiSC can do to incentivize startups and companies to take their work there and ensure success?
Startups companies WANT to set up in Davis because of our talent base. That is not the problem.
The only potential problem that I can foresee is the mix of space types and sizes that get built there. Buzz Oates tends to build really big buildings and tends to cater mostly to really well-established companies with good credit. That is not what we need in an “innovation park.” We need to ensure that the actual build-out comprises mostly flexible buildings that are easy to subdivide into suites that are in the 1,000-2,000 square foot range. That is what startup companies need—so we need to ensure that is what gets built at DiSC.
It is also important that DiSC incorporates a really high density “downtown” section as a social center for the development—around which the majority of the non-industrial office space gets built. Good innovation centers built elsewhere all incorporate the human/social need to have gathering spots. There are a lot of “bad” commercial parks in the area which are food & culture deserts. They don’t even have sidewalks. DiSC needs to have its own “scene” where business deals get made, and which allows people to walk to grab a coffee or have a meeting over lunch without having to get in a car. This doesn’t need to be a huge component of DiSC, and it doesn’t need to compete with downtown—just enough of a localized set of resources to serve the on-site demand.
What do you think the University and/or City Council can do to incentivize businesses to keep or move their business into DiSC? (Or any available space in town as a whole?)
See above. The hard truth is that catering to startups is NOT the most natural route to take for most landlords, so the city does need to weigh in, and help shape DiSC after passage to ensure that the right mix of startup friendly buildings and business models are present to allow us to retain our locally-generated startups.
What components of transportation are the most important or most needed to support businesses within DiSC?
The shuttle that goes directly downtown or to campus is really a must. Three stops at the most. Startup companies in Davis have HEAVY overlaps with campus-based talent. Interns, post-doc researchers and faculty all do a lot of work BOTH on campus and outside at startup companies, so providing a no-car / no-parking shuttle that runs with high frequency is really going to be valuable.
How does the existence of retail and restaurants support or hinder companies trying to start up in DiSC?
It’s necessary for the reasons stated above. DiSC needs its own “scene” and it should not be built in the same way that a lot of commercial parks have been built for a long time: spread-out food deserts where you need to get in a car for lunch, coffee, etc. DiSC should look and feel like “Davis’ business district.” A lot of the people who work there will of course make their way downtown for lunch because of the wider array of options in downtown. But if it doesn’t have its own retail and restaurants, then there will be a lot of unnecessary car trips out of DiSC and parking impacts downtown, etc. On-site amenities are an absolute must.
How do you think your own experience working with and assisting startups puts in context the necessity of DiSC’s success?
I have seen SO many companies leave Davis because we don’t have available space for them. Well-funded, successful companies. This is bad for the companies because their talent mostly all lives here in town—and it is bad for the city because we are leaking the economic activity that those companies generate. Being able to retain startup companies in Davis is good for us socially, economically, and environmentally.
Justice – inclusive of transparency – could instead have this as:
“Benjamin Wynd is the Housing Caucus Chair/Founder of Davis College Democrats, which will be honoring Dan Carson with its Grapevine Award for Local Leadership at their Indigo Awards ceremony on April 11, 2022. This is Wynd’s first article for the ‘Vanguard.”
ha ha ha ha ha. Good diggin’s, TE.
Buuuuuurn:
https://www.youtube.com/watch?v=baJ_cOzOOfI
And their stock tanked, after that. They’re dealing with an experimental technology.
Has anyone considered that companies go to places such as West Sacramento because it’s cheaper, there? Which is especially-important for newer, and/or expanding companies?
And for that matter, housing (for their employees) is also cheaper, there.
This is what you call a “win-win” for newer/expanding companies, in particular.
I heard that Dan Carson recently attempted to “forgive” $60,000 of the city loan that was previously provided to Inventopia, but couldn’t get the rest of the council to go along with that.
And for companies that want “brand-new” construction on prime farmland, not sure if they’ve heard that Woodland is also trying to “save the world” – after they declined to do so in Davis.
Ron, you constantly fail to understand the purpose of this.
The city DOESNT CARE if a company like Origin is dealing with an experimental technology. The point of having a business park in davis is to keep the economic activity IN DAVIS.
Startups are a tough road. Most fail, a precious few succeed. But keeping these companies IN DAVIS means that that investment dollars these companies attract are spent IN DAVIS.
High value companies providing good paying jobs in town, spending money inside the city limits, having their employees engage in local shopping… all of that is the entire point of DiSC and it has been since the concept first arose back in 2008.
They will care, if an experimental company goes out of business – especially after the city has already spent the money that they would be hoping to extract from them.
In fact, the city is already spending money it doesn’t have (e.g., on ladder trucks).
You and David frequently tout the companies that do exist in Davis. (You also claim that their employees primarily live in Davis, but you offer no proof of that.)
My question is, why aren’t the existing companies “enough” for Davis? And, how much is “enough”, when you consider that the residential (money-losing) portion of Davis would (also) need to expand proportionately to the amount of commercial development? (In order to house those new employees.)
In other words, why do cities consistently find themselves short on funds (not just Davis), and why haven’t the companies which already exist already “saved the cities” from this result? With this failure providing an opportunity for people like you to claim that they will save the city – when your own company is relying upon city funds to stay afloat in the first place?
Incorrect. Thats not how this works. How is the city “spending” money on these companies? It doesnt.
All the city cares about is that the economic activity these companies generate. They bring investment money into town, that money is spent in town… If the company fails, then the space they were inhabiting will get taken by someone else who will do the same thing.
We obviously don’t want the companies to fail, because we will make more money when those companies are profitable and paying their sales taxes locally. But the city certainly doesn’t lose money in this proposition.
It will be “enough” when we have a reasonable small-unit R&D space vacancy rate. Not before. Right now, that vacancy rate is effectively negative.
There seems to be a lot of confusion here. First of all, the city isn’t as Tim points out spending any money. The city is approving the right to build facilities. The facilities will be built by builders, owned by the developer, and rented to tenants.
And yet, that’s the entire argument that the development activists put forth.
Then why “fret” about companies that leave, as you and David do?
Then why “fret” about companies that leave, as you and David do?
This makes no sense, in terms of tying it to city finances. Vacancy rates have nothing to do with that, nor do they have anything to do with the question I asked.
(For the moment, we’ll leave aside your claim that “small-unit R&D space” is even a “thing” in the first place.)
In fact, lower commercial vacancy rates would be “good” for any city. (Got cut-off, trying to add that.)
A problem exists, if commercial vacancy rates are high, not low.
If a development actually creates a “fiscal profit”, the city will indeed spend that money. Much of it to accommodate the newly-created needs of the development, itself.
And in the case of Davis, they’re spending money before they even approve more developments.
And since existing developments haven’t been paying for themselves (proven by actual evidence), why is it that the development activists consistently try to sell the idea that new developments will do so?
The solution that’s put forth is the very thing that created the problem in the first place.
Ron, I’m not buying it.
I don’t think you are actually that ignorant on basic economics. I think this is all for show because you don’t want to scede the point – in which case, this entire exchange is “just for show” for the people who might also read this comment thread.
In which case I will just tell the viewers at home this:
Every community needs to have an economic basis – a source of “jobs” that brings money INTO the economy. We have the university of course as our town’s entire reason for being.. but since “our university” is the #5 best funded public research institution in the world, we also have an incredible opportunity to create a secondary economy based on the technology spin-offs that are created by that research.
Do we HAVE to cash in on that opportunity? No, not technically.
Does someone who has a winning lotto ticket HAVE to claim their prize? No, not technically – But they would be stupid not to.
It is in the city’s best interests to provide space for the companies that want to be here. That is hard economic fact.
Not sure if the “5-comment” rule is (also) being relaxed in this article (except for you as the author), but I’ll give it a try:
Thanks?
Again, why isn’t the existing amount of development sufficient to support the city? And, why is that (also) the case for most cities throughout California?
That’s actually an opinion. For example, in your case – your company has been a financial drain on the city (in terms of providing a loan, etc.). I understand that Dan Carson proposed eliminating $60K of the debt that the city provided to your company, but that the other council members declined to do so. Not sure if your company actually pays any taxes, as I understand it’s a non-profit.
But more importantly, how do you figure that the city’s finances will improve, simply by becoming larger (both commercial and residential development)? Are larger cities always better-off (fiscally) than smaller cities? (I don’t think so.)
Ron, again, you know the answers here. Im not going to dignify your insult-by-way-of-question with a response.
There’s no insult in my comment.
I have nothing against you or your company. In fact, I’d like to see it do better, and help Davis fill and maintain its existing commercial spaces.
But I do find it questionable when the city starts supporting businesses which advocate sprawl. In the same way I find it questionable for a sitting council member to launch a lawsuit against opponents (whom he is also supposed to be representing, as part of his job).
I don’t support sprawl, particularly beyond the Mace Curve area.
I also like Ikeda’s as is, and don’t want to see that plot of land incorporated into the city. (Apparently, that potential incorporation is part of the DiSC proposal, as well.)
Yes there was Ron. And it was Deliberate.
In fact, you out of you way EVERY time we have an exchange on these forums to try to state that inventopia is reliant on the city or somehow a drain.
Your comment today was exactly that (again) and it WAS insulting ( again ):
This is BOTH a lie AND an insult.
The facts: The city borrowed money at the low rate that they have access to as a government. They loaned my non-profit that money, which we pay back WITH INTEREST – at a rate HIGHER than what the city pays.
What does that make the city loan to inventopia? A financial ASSET.
Like many non-profits we require financing when we build something new that is going to pay off over time. The money from the city was the best deal avalible.
We are not a DRAIN, on the city, and you saying so is an INSULT to every hour of work that I have put in to helping my community (almost entirely without pay).
THAT SAID: I also reject the notion that you are so naive as to not understand the fact that a city might proactively INVEST in economic development. Many cities do, and Davis really should.. though it hasn’t yet. I hope the city WILL someday soon make an “actual” investment in inventopa beyond passing through a loan.
Do I need to explain the concept of an investment to you? I dont think so, because again, I don’t think you are stupid. You are a troll, and I have already taken the bait for long enough.
I look forward to you willfully mis-understanding, distorting and insulting my future volunteer efforts to help our community.
Why that’s strange, TK didn’t address your allegation that Carson tried to push through a $60k loan forgive from the city to his company. I know nothing of this one way or the other, but when I saw that TK was responding, I know if someone alleged that and it wasn’t true, I’d sure correct the record.
It was told to me (more than once), by someone I trust.
I haven’t had enough interest in it to watch the council meeting, in which they were allocating federal funds.
I did recall seeing a staff report which included a request for a lot more than that.
https://documents.cityofdavis.org/Media/Default/Documents/PDF/CityCouncil/CouncilMeetings/Agendas/2022/2022-03-01/05-ARPA-Funding-Recommendations.pdf
(I was told that the $60K listed above for improvements is “different” than the $60K loan forgiveness proposed by Dan Carson.) In any case, note that the first item listed above requests $100K in loan forgiveness.
Alan,
We applied for funding from the recovery act funding that the city had to distribute. “free money” from the federal government as it were, so we applied for some of it.
The council decided to fund other things that were definitely harder to fund by “normal” processes, And Dan tried to put some of that funding back on the table during the meeting. One other councilmember had a number of questions about us – like were we paying the loan as-is ( we are ) – and so didnt want to award money without getting some answers first.
That is all Alan. I didnt think it rose to the level of needing to comment on it.
Ron,
Something like 9 out of 10 (I’d say more) start ups fail. Even the ones that get past the idea on a napkin stage and even start to sell stuff. The bigger business plan with start ups is that you have to have a lot of them. In tech start ups it’s like today’s Major League Hitters; everything is swinging for the fences. He’ll hit .200; lead the league in strike outs (213) but have 38 home runs. If that player were an industry of startups he’d hit something like .075; lead the league in strike outs by an enormous margin (300) but hit 80 home runs.
Keith… yep.. thats exactly how this works.
Good news… There is a new company that arises out of UC Davis technology almost every week. So yeah.. we have “a lot” of them. 🙂
Yeah…it was seed stage venture capital work that got me into real estate development. In tech, they look for that “hockey stick” graph line of explosive growth. I suspect that in the bio/med/ag space you’re going to see less explosive growth; more doubles and triples so to speak than home runs because investor exit strategy in bio/med/ag is probably more likely from acquisition than from IPO.
It seems to me that the best solution for the city and all of the startups would be for the city to back a significant….next stage; post incubator type of office building in Davis (likely infill). Maybe on some underutilized city property. They could do a JV with a developer. The city could make it’s money by taking out warrants and/or convertible debt on the start up companies. So the primary revenue stream for the city isn’t some little tax money from these fleeting start ups; it’s the return on investment from when one of them actually grows and becomes successful.
The developer in me says that the project should be mixed use. You’d have to add some residential to the project to pay for some of the initial costs (sales of condo units) and provide some stable revenue from rentals.
I dunno…I’m just spit balling ideas again.
As for the DISC? I’d imagine Buzz Oats would create a product that targets multiple markets. So yeah, they’re going to go after the bigger more established companies….in retail terms…”anchor tenants” but I imagine that some of the space will be small enough to fit some growing start ups too. So yeah…DISC probably won’t be primarily for growing start ups but there’s probably a place for them there.
Which is how it should be, really. The small startups that make it will grow into large established companies which we want to retain.
Schilling Robotics was a small startup in town decades ago – and now it is a significant contributor to the tax base of the city who we almost lost out of town a couple years because we couldnt accomodate their growth.
We also have big established companies that like to come set up shop here to do some davis-related commercialization ( Wrigley and BASF etc ) no problems with accomodating that.
So long as we have a mix of use sizes that includes small divisible flex space, we will be fine.
Keith E
I will confirm that the research finds that only about 10% of R&D efforts, and correspondingly, commercial start ups, yield positive economics results. And the returns on those efforts are enormous. People who demand guarantees on innovative investments fail to understand that to get large benefits, risks must be taken.
It is assumed that every job at DISC will be for a UCD grad, I would be interested in finding out how many jobs will be blue collar versus college degrees from UCD. Those individuals will most likely not be able to afford housing here in Davis and will be commuting.
How do you know they won’t be able to afford the affordable housing onsite? In the end, they have a formula for how many people will be living onsite, in town and out of town and that goes into the traffic calculations.
Do low-income employees have priority for the Affordable housing component?
The calculations in the EIR literally show that the proposal would create a demand for 1,729 housing units, with 460 onsite. (And that’s already including assumptions regarding how many employees would live at the site.)
The surrounding city and community is expected to accommodate the remaining demand (1,269 housing units). There is no plan to do so.
The median Home Price for mostly existing homes is: $863,306. New homes cost more. So unless those workers are getting subsidized; it’s likely that the majority of them won’t be able to afford a home in a new development. A bio medical engineer for example makes about $85K a year. Say the family is dual income at $150K per year. That’s still a stretch to afford a $850K+ home.
David, I believe it would be useful to the community discussion if that formula were shared publicly. Can the Vanguard get a copy of the formula and publish it?
John, not every job of course. But the opposition to this always tries to make it seem like the increase in jobs is equal to the number of extra people that will need to come IN to Davis to work there… which is definitely not the case.
The proof is all around us. We have two kinds of high-tech companies that are here in town:
Companies that come here to hire Davis talent. ( easy to see examples are wrigley, BASF, DMG Mori)
Companies that are started by Davis talent. (Marrone, Schilling, Advanced Farm, Evolve Bio )
Either way, NO companies will set up shop in DiSC that aren’t here primarily because of Davis talent. It isn’t going to be as cheap as woodland or west sac. But high-value talent is scarce, and people will pay the premium to offer their employees quality of life, being able to live and work in the same town etc.
From the city’s fiscal stand point; that’s a good thing. It means they don’t have to provide services to support new housing.
Woah, “open space” is in quotes? DISC is preserving open space by destroying it? Anyway, how in the heck is the rest of this – e.g. “support transit” and “walking distance” – an endorsement for DISC, when it will be peripheral and thus private motor vehicle-focused?
Oh, sure… Carson and the developers are desperate to spin in that way…. but a
to campus? Campus is spread out with departments most relevant to DISC all over the place. This means multiple stops on campus to provide any kind of walking-assisted connectivity, or of course a 5 to 10 minute bike ride in any one of at least a half-dozen stops that could serve DISC adequately. Any half-competent TDM manager will laugh at how many people this will get out of their cars, when one can drive from one of way more than a half-dozen parking lots on campus to DISC at most times of day in ten minutes.
I am not going to agree or disagree with the need for innovation space – no, not in quotes: respect! – but Keller seems clear that it has to connect with other places as well as itself. DISC does not and cannot fulfill this except for with lots of trips by private motor vehicle. The Campus Travel Survey shows clearly that few cycle so far east of campus. Even worse, what about someone who lives in Davis but far from both campus and DISC and who needs to visit both places on the same day, or needs the freedom to do so spontaneously? Who from anywhere in central or west Davis is going to cycle to or take public transport to DISC more than once a day, or who would normally be within a 15 min bike ride from Downtown or central campus from their home? DISC will simply generate a lot of internal trips by private motor vehicle compared to distributed innovation center businesses located in the area between roughly Pole Line – so also in South Davis – and campus, many of which are already connected for cycling and transit, or even walking.
The most ripe and innovative opportunity zone for off-campus but connected mixed-use is on top of 113 roughly between Richardson and Cowell, and the one needing more political cultivation is the PG&E yard – adjacent to the also fertile east 5th St corridor. There are also multiple large parking lots at shopping centers way closer to DISC where mixed-use developments could be planted (and watered with existing irrigation.)
Todd, that was a really excellent analysis on the transit and clearly written. I was going to make some of those points but now don’t have to.
I much agree on infill spots and would probably agree with both TE & TK on certain spots. PG&E yes but PG&E not interested plus clean-up so that is many decades hence. But downtown (not adjacent, but IN), and shopping centers and a few underutilized spaces, yes. The problem is, do any of these make economic sense? (Thanks Prop. 13, you mf’er of a law). So, what tends to get actually “infilled” all over California are existing housing spaces that lower-income people already live in. So where we’ll see pressure is mobile home parks, neighborhood adjacent to downtown, Davis Manor, etc. And that’s what I’ve got an issue with. Gent Riff Ick Kay Shun, by any other name.
Comment number three: It’s oh so curious how an attempted pro-DISC article appears the same day as the No on H statement which clearly states the overall victor in Carson’s invasion against decency. It’s curious – as I mention above – how it’s essentially an editorial by the Davis College Democrats, planning to give Carson a hug at their ceremony if he feels bad for losing his court case while abusing the status of “citizen” as he wields the gravitas of Councilmember weapons – it’s sadly curious that Tim Keller’s portmanteau of a company invents nothing in sustainable land use and proposes utopia in the form of built-up prime farmland.
TE, this could be your best day ever! Great comments 1,2 & 3. I couldn’t agree more.
And at least 80 bonus points for the contextual use of the word ‘portmanteau’.
Five comment rule is in effect. Tim Keller is exempt. Please monitor your own comment count.
Alan Miller: Politically-speaking I think that any creative government authority that’s a bit of a bully with huge companies – instead of citizen volunteers – is in a good position in regards to getting PG&E to do stuff, as I assume that their approval rating etc is still quite low. It’s clear that changing the PG&E yard needs to happen, and I’ve been proposing it for years and I know that it’s been on the mind of many for much longer.
My concern is that this might not happen in the best way if it’s not a clear and robust part of the “plate” of the new General Plan discussion — and then also I still think it could work much better situated immediately next to multiple I-80 egress points, e.g. in part of the proposed space for DISC, though I realize that that would sacrifice farmland. Do we have a study to see alternative siting for it? Can we at the very least plant some symbolic sunflowers at the southeast corner of 5th and L? We’d need to tear down some fences – the added value being that it would daylight the stupid blind corner on the multi-user path!
PG&E actually applied for a variance to replace the existing fence with and extra tall (8′ I believe) black steel fence around the perimeter. This is very expensive and shows they have no plans for leaving in the next few decades. And environmental testing/cleanup will very likely be an issue and may take decades as well (I don’t know the particulars at this site, but when I was an environmental consultant by profession decades ago we had several PG&E sites in the Bay Area that were highly contaminated).
Apparently the Planning Commission rejected the fence variance, so PG&E is trying to get around this by rezoning the property as a planned development. Huh?
Thanks for details BUT WE NEED TO START MOVING THEM, at least in our minds.
Pro-density sentiments have salivated over the PG&E yard since before the Vanguard existed. Since before Measure J. At least back to the 90’s.
Still no movement on it from PG&E a company that has gone through two bankruptcies over that same time frame. You would think that if they had any interest in doing something else with the that land there would be some indication that they would be open to the idea of remediation or redevelopment there.
Pick your timeframe. Its not going to happen in anybody’s lifetime.
Todd
Give up on PG&E please–no more fantasies. It won’t give up that yard until the natural gas lines are retired in the Sacramento region. (It serves Sacramento County, which is served electrically by SMUD.) That is likely at least two decades away. We have to work with what we have.
I don’t see why building at 113 and Covell is preferable to Mace and I-80–they are both somewhat isolated from the rest of the city’s transportation grid.
Finally, we need to recognize the sanctity of private property ownership in this country. We may have fantasies about where we would prefer to have certain types of development created, but unless we collectively have enough money to directly purchase or incentivize use of that property, it’s the private owners who decide how its used. Please don’t waste our time with speculation and imagination about things that will never happen unless there’s money to back it. This is how the U.S. economy works, and likely will continue to work for a very long time.