On Tuesday, the city of Davis will see the first major roll out of a new economic development plan since the hiring of Katie Yancey.
It was interesting to read the comment of my friend Tim Keller, who has been working on the ground in Davis with start ups for over a decade.
He had an interesting take that is worth highlighting here.
Tim Keller believes that the correct playbook for economic development in Davis is “is to focus on companies that are FOUNDED here, or who come here when they are VERY young looking for university-affiliated talent.”
He writes, “That is the right playbook because it is the best fit for our strategic strengths and opportunities vis-a-vis the university. This is proven by the solid stream of startups that have started here over the last few decades.”
At the same time, he acknowledged “we have not been able to retain many… which is what we need to work on.”
In the staff report this week, city staff cites the Greater Sacramento Economic Council’s (GSEC) “2024 Capital Regional Industry Analysis and Recommendations” report, prepared last year, which recommends focusing on the advanced manufacturing and agriculture, water, and environmental technologies sectors.
These recommendations are supported by the findings in their 2024 Capital Regional Industry Analysis and Recommendations report.
GSEC highlights the importance of these sectors due to their potential for growth and their alignment with the region’s strengths and existing businesses.
Drilling down into that report, we see, underlying it, the same problems that we have noted.
Davis looks like the ideal location for economic development because of its proximity to UC Davis, but also its strategic location and proximity to major transportation corridors like the I-80 and access to heavy rail, which are beneficial for sectors like Advanced Transportation & Logistics.
Davis also has existing marque businesses that GSEC believes could serve as anchors for industry clusters, providing a foundation for growth and development such as FMC Schilling and DMG Mori, among others.
But there are three main challenges and none of these are either new or surprising.
First, the lack of zoned land.
A recurring challenge across multiple sectors is the lack of commercial, industrial-zoned land, or having land zoned for specific developments (e.g., campus, hospital), which limits expansion possibilities.
Tim Keller talked about the challenge that Davis has had retaining home-grown startups—and this is nothing new—but there has not been next level available space for growing companies. That has forced some to move and forced others to limit their growth potential.
That’s a problem because it limits the benefits of overall economic development. A start up is going to have limited numbers of employees and generate limit amounts of tax revenue for the city. It is as these startups grow and develop that they hire more employees, creating jobs and generating property and sales tax for the city.
The current report recognizes this shortfall and calls for implementing strategies for business retention and attraction ensures a supportive environment for existing businesses while drawing new investments, contributing to a dynamic and robust local economy.
But obviously part of doing that means to have not only space for startups but also next level space to accommodate growth potential.
Another related problem—some sectors, such as Retail, Hospitality, and Tourism, face challenges with a lack of conference/event space and active tourism marketing campaigns.
Finally, another recurring problem is that UC Davis chose to invest heavily in Sacramento, and that limits the ability of Davis to incubate the health sector.
As GSEC notes, the Health sector faces challenges due to the concentration of the UC Davis Medical Center’s efforts in Sacramento, particularly at Aggie Square.
I raise these points because where the previous efforts at economic development fell was in getting land and space for commercial development.
The city’s previous efforts focused heavily on a dispersed innovation strategy which focused first on existing spaces, second on close space such as Nishi, and third on peripheral spaces.
However, over the course of the last decade-plus, we have seen the voters vote down economic development at Nishi and on the periphery twice.
Can the city hope to succeed this time, even with a different approach that is perhaps better suited for utilizing the strengths of the locale? That’s a big question because, at the end of the day, the city retains most of the strengths it appeared to have in 2010, but the challenges haven’t changed much either.
I’d like to say I’m optimistic about the chances for success. A lot of people believe that the current director, Katie Yancey, is the right person for this job. But when we drill down into these reports, we see the same challenges that ended up crippling efforts in the past, and it makes one wonder if we can get past them.
From article: “First, the lack of zoned land.”
And yet, NONE of them have ended up at the new technology park in Woodland – the one that “escaped” from Davis (where Bretton Woods is now being built).
And in Woodland, I understand that they had to rezone the site (from commercial) to include 1,600 housing units. Again, that site is still farmland, at this point.
So it doesn’t seem like there’s a problem with “lack of land”.