Measure R: New World, Same Tired Claims by Covell Developers

The fact that there is no real “no on Measure R” campaign other than the occasional missive launched by the younger Mr. Whitcombe, whether it be the occasional op-ed, ballot statement, or ill-fated court challenge, tells us really all we need to know about Measure R, which is that it is going to pass overwhelmingly and the naysayers of ten years ago have by-and-large faded into the background.

The Op-Ed continues, “But the university took matters into its own hands and created West Village, a residential and small commercial development west of Highway 113 that will welcome its first residents in the fall of 2011.”

So they argue now they can examine the measure on its merits and they find a good deal of merits.  “So with that issue already dealt with, we can examine Measure R on its merits. In every way, it [is] a Davis kind of safeguard that creates ironclad protection against the type of growth that has consumed communities like Elk Grove and Roseville.” 

It turns out that the things they feared became assets in a new world.  “Ask those cities how quickly public safety, education, property values and community ambiance can get away from the city fathers and mothers. Less concrete, more tomatoes? Not such a bad idea. Vote yes on Measure R.”

To understand how thorough the growth issue at least in this race has been off the table, all of the candidates are supporting R, none of the candidates at the CHA meeting were willing to support Covell Village II and be a champion for that development, even the most pro-growth candidate is suggesting we “take a deep breath.”  Now will the issue of growth return to Davis?  There is little doubt.  But I think for the next five maybe even ten years, growth is not going to be the dominant issue on the Davis landscape.

Everyone apparently has gotten that memo EXCEPT for CHA, the Covell Village Partners, and Joseph Whitcombe who turned his op-ed into a rehash of the same tired and defeated arguments of the 2005 Measure X campaign.

Mr. Whitcombe argued yesterday in the Davis Enterprise, “The 150-item-long list of benefits included $60 million for the schools, $25 million to the city, a new fire station with operations fully funded, vast parks and recreation areas, vast wildlife habitats, five undercrossings completing the greenbelt and bicycle system, tens of millions of dollars in traffic improvements, and 800 acres of agricultural preserve, including a 92-acre organic farm buffer on the north side of town.”

Subsequent analysis of the promises that the Covell Village developers made just do not pan out.  As most of us now know, developments are not money generators, at best they can break even with heavy mitigations for impacts and costs.  But generally the cost of additional services exceeds the revenue generated from property taxes.  This makes sense if you think about it, it is why the city needs sales tax revenue in addition to property tax revenue to provide existing city services city wide.  A city would not survive without some business.

However, we will focus on the two most egregious of these claims, one being the $60 million for the schools.  In an October 2005 Davis Enterprise op-ed much like the one Joseph Whitcombe is now writing, Julia Hunter-Blair, Lamar Heystek, Dick Livingston, Jim Provenza, Ken Wagstaff and Natalie Wormeli dispell the $60 million myth arguing that it “is clearly designed to give the impression the developers are making a gift to the schools. In truth, the money would come from taxes levied on Covell Village homes. Not one dime is for existing students, teachers or programs.”

Indeed, logic tells us that while 2000 additional homes will generate some more revenue for the schools, it is going to fall well short of $60 million.  $60 million is comparable to the district’s operating budget generated by the entire city.  How is a 2000 unit housing development going to generate that type of revenue and over how many years?

The second point we need to focus on is even worse, that there would be a new fire station with operations fully funded.  I think Mr. Whitcombe is writing for a different audience at a different time.  As the writers of the op-ed quoted above point out there was never anything in the development agreement that required them to either build or operate a new fire station.  Moreover, there is no way they could operate a fire station on an ongoing basis.

The recent CityGate report suggests that Davis is not going to need a fourth fire station any time in the near future.  So had that occurred, the city of Davis would be saddled with a fourth fire station it does not need, and the ongoing expenses of ten to twelve additional firefighters, which would mean somewhere between $1.5 and $2 million in additional costs to the city.

That is one great gift.  There is no way, again, that a housing development is going to generate $1.5 to $2 million to operate an additional fire station on an ongoing basis.

Perhaps the most amazing thing that Mr. Whitcombe fails to account for in his glorious recasting of the Measure X story is what would have happened to property values in Davis, Covell Village, etc. once the real estate market collapsed.  He is making the 2005 argument from the perspective of 2005.  This is a different world. 

In 2005, the city of Davis was gaining at least 10% annually in property taxes, so maybe you could argue that using those dollars we might have had a positive cash flow, though I tend to believe even then that projection was rosy.  But since the market has collapsed, so too has the property tax revenue stream.  It is highly unlikely that Covell Village  would be in the black now and as a result, our current fiscal problems, especially if we had a fourth fire station, would be far far worse than they are now.

The property tax revenue would have collapsed, the taxes that were supposed to go to the schools would have collapsed, had we built a second high school, we would be stuck with ongoing expenses without the need for additional space, there was not enough money for proper traffic mitigations, and so on.

The idea that using 2005 math that was questionable at the time, we would have all of these benefits in 2010 with the collapse of the real estate market, the economy, is sheer folly.  I did not even talk about water.  Right now the city is attempting to build a surface water project, but as it turns out, we are just about maxing out our water capacity as it stands now.  Covell Village would probably put us in a dire situation for water as well.

The problem is that Mr. Whitcombe is rehashing 2005 campaign rhetoric without doing any 2010 fiscal analysis.  He does not account for 2010 realities in terms of costs, in terms of reduced property tax revenues, in terms of personnel compensation when we are talking about the fire department or expanded city services.  Without that, his argument is less than useless, its flatly dishonest.  It probably was in 2005 from the analysis that I have seen, it certainly is in 2010.

But here we are in 2010, with the growth issue at least for now off the front pages of the campaigns and really off the table in Davis, still reading the same arguments in 2010 that we were in 2005.  Fortunately the voters are smart enough not to be fooled.  Covell Village will remain agricultural land for at least the next ten years, perhaps longer and Measure J in the form of Measure R will remain on the books at least as long.

—David M. Greenwald reporting