City Manager Dirk Brazil announced at last night’s council meeting that the city had already posted the staff report for both hotel proposals, which were put on the agenda for next week’s November 1 Davis City Council meeting.
The city has put both proposals on the agenda to be considered on the same day, but as separate items. Staff is recommending approval of both projects.
This is despite acknowledging that the Planning Commission voted 4-3 “that it could not support recommending approval of the applications. The Commission also made comments on project consistency with City Council criteria for evaluation of hotel proposals.”
Meanwhile, the Planning Commission was unanimous in its approval of the Residence Inn application in late September.
Hyatt House
The Hyatt House is proposing “the construction of an extended stay hotel, parking, and customary accessory uses and facilities at 2750 Cowell Boulevard. The 2.031-acre parcel is currently vacant.”
The project proposal includes the following components:
- 120 guest rooms, including studios, one-bedroom units, and suites;
- Ground-floor guest amenities including guest kitchen, fitness room, lobby with bar, meeting room, and outdoor pool and courtyard;
- A four-story structure with a maximum height of 47’10” to parapet, with a tower at 55’ at the building entry;
- Surface parking lot with approximately 112 vehicle spaces (including EV charging spaces, consistent with the City’s draft EV readiness plan);
- Sustainability features including bicycle infrastructure, photovoltaic panels over a portion of the roof and parking lot generating an estimated 290 kilowatts of electricity, a commitment to achieving a LEED Gold certification from the US Green Building Council, and purchasing any remaining electricity from offsite renewable sources through the proposed City of Davis Community Choice Energy JPA;
- Vehicular and bicycle access from Cowell Boulevard, and bicycle/pedestrian access from the greenbelt along the south edge of the site; and
- Off-site improvements including a storm drain connection to Albany Avenue and pedestrian/bicycle improvements on Cowell Boulevard.
Residence Inn
The Residence Inn is proposing “the construction of an extended stay hotel and customary accessory uses and facilities at 4647 Fermi Place, near the intersection of Mace Boulevard and Second Street. The 2.69-acre parcel is currently vacant.”
The project proposal includes the following components:
- 120 guest rooms, including studio and one-bedroom units;
- Ground-floor guest amenities including fitness room, lobby (with a potential lounge amenity), meeting room, guest laundry, and outdoor pool and exercise court;
- A four-story structure with a maximum height of 49’4” to parapet;
- Surface parking lot with approximately 120 vehicle spaces (including EV charging spaces);
- Sustainability features including carport photovoltaic panels generating an estimated 75 kilowatts of electricity, a commitment to achieving a LEED equivalency certification through a mutually agreeable third party, and purchasing any remaining electricity from offsite renewable sources through the proposed City of Davis Community Choice Energy JPA; and
- Vehicular access from Fermi Place and bicycle/pedestrian access from Fermi Place and Second Street.
Fiscal Analysis
The current city budget assumes the city will collect $1.27 million in TOT (transient occupancy tax) from the city’s 11 current hotels. A review by the Finance and Budget Commission “concluded that each would likely result in a net fiscal benefit to the City of Davis.”
Staff writes that “the Commission concluded that the estimated net fiscal benefit of either of these hotels is likely to be in the hundreds of thousands of dollars annually with a one-time fiscal benefit of $1.8-1.9 million in development and impact fees and construction tax revenue. Financial benefits to Davis Joint Unified School District, the local tourism district and the County of Yolo would be significant.
“The rationale for the fiscal benefits is largely the same for each hotel based on the distinct similarity of the projects. If both hotel projects are approved, the fiscal benefits cannot be simply combined because, depending on the timing of the opening of each hotel, demand may be split until new customer demand is created and absorption is achieved. Eventually, the City can expect each hotel to produce the fiscal impact as estimated if market assumptions are realized.”
Staff notes that the commission “did not provide a specific figure for either hotel because estimates of tax revenues are sensitive to assumptions about the occupancy and room rates.”
Hotel Supply
Staff notes that the Davis hotel supply is “not increasing as quickly as anticipated.” The main reason for that is that, while the HVS study on hotel valuations and appraisals assumed that Embassy Suites Hotel and Conference Center would be in construction and online, “no application for building permits has been submitted at this time.”
Staff summarizes, “City Council approved entitlements for the hotel conference facility at 1111 Richards Boulevard in summer 2015. The approved project involves replacement of the existing University Park Inn and Suites and Caffé Italia restaurant with a six-story 132-room Embassy Suites hotel and 13,772 square feet of conference space. Litigation was filed against the project, which is still pending. Although the litigation would not prevent issuance of building permits for the project as approved, an application has not been submitted. The timing on the project is unknown and nothing is likely to happen prior to the resolution of the litigation.”
Demand Generators
Staff argues that “unmet need for supply exists and will increase over time.” They note that “there are people attending UC Davis events but not staying in Davis hotels.”
When the city conducted an informal poll of event planners at UC Davis, the city received some information:
- Hotel Loyalty Programs – guests want to use loyalty programs and are not provided with all the choices in Davis. There are presently no Hyatt or Hilton hotels in the City of Davis, for example. Both brands have strong customer loyalty and associated programs.
- Amenities and services – guests want better appointed facilities (no details provided).
- Depending on the time of year, supply cannot accommodate all guests.
- 50% of event planners that responded (unknown number of respondents), replied that more hotel rooms are needed.
- 50% of respondents think there is enough demand for two new hotels (this is not explained any further).
Staff notes, “The HVS study addresses the segment of the market that prefers an extend-stay room format and determines that demand for this segment is estimated to be 3,797 rooms in 2016 and the forecast calls for modest increases. All of the demand is currently unmet in our city.”
Transient Occupancy Taxes (TOT)
- Davis voters approved Measure B in June 2016 which increased the TOT from 10%-12%. The increase will go into effect on December 1, 2016. This was estimated to generate an additional $240,000 per year in tax revenue which goes in to the City’s general fund. The increase in TOT means that each hotel room now contributes more in tax revenue and this makes additional hotel rooms of increased benefit, particularly with a net positive room absorption over time and higher rate rooms
- Hotel stays of longer than 30 days are not subject to TOT collection. Staff has included conditions of approval in the Conditional Use Permits of the two proposals to limit hotels stays to no longer than 30 days to avoid the provision that allows for the collection of TOT to be discontinued after a stay of 30 days.
Council Options
Both proposals require City legislative actions, which means the council “has full discretion to consider the proposals without regard to the typical time limitations under the Permit Streamlining Act.”
However, if approved, “a project will have an 18-month timeline for Conditional Use Permit, Final Planned Development and Design Review entitlements. Substantial construction must occur before the deadline, but an extension of up to an additional 18 months can be granted by the City and is not uncommon for larger projects.”
Staff notes “the uncertainties of development” as well as their analysis that the “timing of the hotel projects may be the key determining factor in their successful entry in to the Davis market and the ability for the market to achieve absorption without substantial negative impacts to current hotels.”
Staff writes, “Such project applications are not made lightly by the proponents and not without substantial investment in land acquisition/option costs, plan development, and entitlement processing. Such investments are also not made without confidence on the applicant’s part that there is sufficient market demand to absorb the project.”
The range of options for City Council action includes the following:
- Approve application(s) with findings and conditions as set forth in the staff report(s), including any modifications that the Council may deem appropriate.
- Deny application(s) with findings for denial (these findings would need to be crafted at the dais or a request made of staff to return to Council at a future meeting with draft denial findings). Davis Municipal Code states that if a proposal for rezoning or conditional use permit is denied a substantially similar proposal may not be proposed for a minimum of one year.
- Request that an applicant(s) explore project changes as may be suggested by the Council, thereby continuing the hearing and returning at a later date for consideration. The City Council may establish timeframe parameters (minimum and maximum) for consideration of changes prior to the matter returning to the Council for action. Depending upon the scope of the changes staff would determine whether new public hearing notices would be required and whether Planning Commission review of the changes would be necessary. Unless the matter is continued to a date certain, new public hearings notices would be required.
- Continue the application hearing(s) to a future date pending further information (examples include: Embassy Suites litigation/project status, additional data or market analysis, etc…).
The Vanguard will have individual analysis of the projects and much more in the coming days.
—David M. Greenwald reporting
Good idea. If the hotels don’t make it we then have more housing.
Davis wrote:
> both hotel proposals which were put on the agenda for
> next week’s November 1 Davis City Council meeting.
If the City Council votes to OK the hotels on the 1st is that the last step before they can get a building permit, break ground and start building?
huh? how did this happen? I thought the planning commission got rid of the Hyatt idea? what has changed that it is coming forward again?
or are the developer supported and family of developers taking this on over the recommendation of the planning commission?
many would support the one only, not the one on Cowell
is this the last ploy to lump them together and put them up together?
the only result will be neither will be approved, or if approved, will never be built…
Marina… you truly have no clue… the PC is an advisory body, not a legislative body [hint: they are not elected]… they have some ‘final acts’, but even those may be appealed to the CC. By either the “evil developers”, or the “saintly public”. And, the CC can call-up any PC action (another form of “appeal”).
And the vote was 4-3… one changed vote for the project changes the PC recommendation.
A secondary or tertiary point, at best … vote counts do not matter in the real world… a 3-4 vote, 5-2 [or 2-5] vote, 6-1 [or 1-6], 7-0 [0-7] would all have the same procedural ‘remedies’…
Yet, it typically would be a question stated in the positive… here, it appears to have been posed in the negative. Interesting…
I anticipated this issue so I asked Ashley Feeney for an explanation: “staff provides their independent professional recommendation to both hearing bodies. Prior actions of the City Commissions, inclusive of the Planning Commission are explained in the staff report for City Council to consider.”
I would also be interested in who voted how and also someone could keep a running statistical summary for use to review the next time there is an election…
though I may be less and less interested once I am living in a better place….ie: not Davis.. 🙂
From article:
Hotel stays that are PLANNED to be longer than 30 days are not subject to TOT starting on the FIRST day of occupancy, if the traveler has made such arrangements with the hotel. (There was an extensive discussion and analysis in the Vanguard comments section, regarding this.)
However, if the conditional use permits do not allow stays longer than 30 days, it seems that this should not be an issue.
Of course, neighborhood concerns remain, at least regarding the Hyatt proposal.
My post above can be confirmed by examining Davis city code.
Federal employees are also exempt from TOT. (For example, I believe that Residence Inn was/is popular with Federal auditors, because the rates matched the maximum reimbursement rate for employees, and they often seek accommodations for extended periods.) This could include those visiting the Sacramento area (not just Davis). Just something to be aware of. (This exemption would apply to the Hyatt, as well.)
http://cityofdavis.org/business/business-resources/frequently-asked-questions/transient-occupancy-tax-fact-sheet-2016
“Neighborhood concerns” can well be double-speak for “we get right of approval/denial” by the neighborhood…
of course, anyone with half a brain may want to say they plan to stay for over 30 days….what provision is there to grab back the TOT after the person leaves early?
and why are extended stay exempt anyway? are they going to be paying taxes or supporting the infrastructure they will be using (and perhaps abusing since they don’t have the connections as those who live here…
Why would someone pay to stay more than 30 days if they’re not going to stay more than 30 days?
Why 30 days? I suppose it’s the cutoff between transient occupancy and regular occupancy.
I don’t know the details and have not really the time to research,so those who have spent more time on this topic, please weigh in..
Is one locked in to 30 days, ie: do they pay up front and lose the money?
Or, can they leave early and get the money back?
Marina:
This is from Davis’ city code:
I don’t see anything regarding payment. In any case, it seems to me that this particular issue may be addressed in the development agreement(s) – as discussed in the article. (As long as the agreement(s) are in force, at least.)
Of course, federal employees (teams conducting audits of state agencies in Sacramento for example), are still exempt from TOT. (The Residence Inn location may be particularly appealing for such teams.) Perhaps not a large percentage of overall visitors, but I don’t really know.
Correction – the Vanguard article above describes “conditional use permits”, not “development agreements”. (Not sure if they’re the same thing.)
Great job city staff. Now let’s see what the CC is made of.
+1
+2
probably a mix of “sugar, spice and everything nice”, and “snips, snails and puppy dog tails”. A misogynist nursery rhyme…
they will cave like a house of cards on hyatt
Interesting analogy… Dad and I competed to build houses of cards, both for height (we one time got up to 4 stories), and resilience to destruction…
This “house of cards” is most likely to be destroyed by bombastic, self-oriented interests (the Cowell ‘neighbors’)… we shall see, shortly… if the Cowell project fails, suggest (depending on the recreational use vote), that we use the site for MJ, half-way housing, and ‘adult entertainment’ uses…
hpierce:
Lately, it seems that you’ve lost all pretense at objectivity, sensitivity, or concern for your fellow citizens. Sorry to see it.
ron – because you’re the bastion of objectivity?
DP – And you? (By the way, I find your online name to be quite “ironic”.)
I probably should retract the word “pretense”, regarding hpierce. That is misleading, as he doesn’t seem to try to “pretend” anything (even if he sometimes dismisses valid concerns).
never claimed objectivity. you’re definition of progressive is quite limited. is there a single issue that you care about other than land use?
DP – I’ll acknowledge that “progressive” is open to interpretation, and that no one is entirely “objective”.
Just found some of the comments on this blog to be insensitive, at best. I’m not sure that many really listen to others’ point of view, with an open mind. It seems that we quickly resort to defending ourselves, and attacking others. Perhaps its just the nature of online blogs that brings out the worst, in everyone.
Yes – there are other issues that I care about. But, land use decisions have a significant impact on the city, and are within local control. (I already find it taking up more time and energy than I’d like). I don’t have a lot of interest in arguing about things beyond Davis’ control.
Question Ron, how progressive is it if the city doesn’t generate revenue and has to tax people more to pay its bills? How progressive is it if people of modest means are priced out of the city? How progressive is our lack of affordable or Affordable housing?
Chamber Fan:
I’m not going to get dragged into another endless, open-ended argument, today. The issues you’re bringing up have been discussed in-depth, many times. You already know that there’s a lot of disagreement (including the issues that should be considered, and the financial and non-financial impacts).
But, I’d encourage you (or anyone) to simply look at the insensitive comments made today regarding the concerns of fellow citizens (e.g., neighbors of the Hyatt proposal, who might be wise to avoid arguing on this site – given the hostility expressed here). In fact, they’ve largely stayed off the Vanguard, it seems.
What does being “progressive” have to do with support of hotel development unless those opposing the hotel projects admit that they are demonstrating conservatism.
Ron: Maybe you should have thought of that before you took a shot at hpierce and then questioned DP’s manhood.
Chamber Fan:
The response to hpierce is based on his statement, above. (As well as some other recent statements.) For what it’s worth, I used to value his input more than I do, now.
DP’s “manhood”? What the heck are you talking about? (Actually, I don’t even know his/her gender – do you?)
Given DP’s pro-development stance (not just here), I do question the appropriateness of his/her online name. But, I’ve already acknowledged that “progressive” is open to interpretation.
Lots of insensitive comments, today. (Not just from those mentioned.)
Joking Ron, trying to lighten things up
Chamber Fan:
I don’t get it. The “joke” had no connection to anything. (Usually a requirement for humor.)
You said: “I find your online name to be quite “ironic””
In a sense, you were challenging his manhood.
Chamber Fan:
If you’re going to make a statement like that, perhaps you could explain your reasoning. I’m not seeing anything to do with gender, in the name “Davis Progressive”. And again, I had no idea what his/her gender actually is.
Are you just trying to entice me to participate in a nonsense argument?
Ron…
I can see your point… guess I should respect the views of ‘my fellow citizens’, particularly when they say a hotel project in their neighborhood will result in increased crime, abduction and/or sexual abuse of their children, reduction in property values (with no substantiation), open drug use, etc. All perfectly “valid” points, in their view…
I guess I need to respect that
tripeobviously heartfelt view. Or, perhaps I’m just not wired that way… call it a “handicap”/disability, if you will…I suspect I (and spouse) have served this community in many ways over the years… ALL the citizens, not just a neighborhood. And your “creds”?
Nice. I guess because you “do more” for various causes that most others, you feel there’s nothing wrong with this. (Or, going after people like me for having a different opinion than you about development in general, for that matter.)
Does your community involvement give you some special privilege to make negative judgements about others? Does your opinion carry more weight, as a result?
Most people who are truly “giving” have genuine compassion for others, as well. (Even if they don’t agree with them, or think that some of their arguments are invalid.)
Yet, Ron, you apparently fully support the outrageous rhetoric of the “neighbors” of the Cowell project (well documented on this blog and public records), as you call me “insensitive”, and cannot show one case where you have done anything towards community service, except your posts here? [you never have addressed my main points, just the ephemera]. Yet you accuse me of taking “privilege” in my use of first amendment rights? Tu ne comprends pas…
Whatever… thinking folk will see you and I for what we are, and the positions we take. That’s fine by me…
Ron…
Back at you… and have tired of your “game”…
BTW… I considered the neighbors complaints, objectively, and except for some process issues, found many of them (arguments) irrational and/or illogical (and somewhat bigoted).
hpierce:
I did not say that I (fully) agreed with neighbors’ concerns, in this case. (Actually, I didn’t express my opinion, other than to state that some were being insensitive. In any case, I recall some concerns that were widely acknowledged to be significant.)
I don’t see the connection between your (admirable) community service, and using that as some kind of justification to criticize others’ opinions. Yes, you’ve apparently contributed to the community, but that doesn’t make your opinion on issues more valid that someone else’s opinion. If it did, I suspect that you’d “win” all arguments with almost every other commenter on this blog.
Seems like another way of saying that “Your opinion is less valid than mine, because I’ve performed more community service than you.”
On a separate note, the quote (“Are you just trying to entice me to participate in a nonsense argument?”) was not directed at you. Look at who I was responding to.
It seems like the key question is how many hotels do we need?
Enough to meet demand, without undue ‘cannibalization’… the private sector will inform that decision… the private sector won’t go thru the costs of being processed by the ‘civic’ “spanking machine” for entitlements, acquisition of land, plans and construction costs of building, maintenance, etc., unless they believe they will get a good ROR…
They aren’t stupid.
gee hp,,….I do know the pc aka planning commission have little voice, and yes, that much has not changed.
but there was a time when sometime the council would refuse to hear it if the pc didn’t bless it…
if the developer actually is willing to compromise and isn’t sure they have the majority vote on the council, then they will work further with the neighbors who are not happy etc.
at least, that is how things used to work before the same ole developers learned how to push their agenda through..
now they barrel along -not a good sign- as that means the council is not willing to push back at their “friends and supporters” and/or family…
Guess in the good ole days [by your account], corruption (by not considering appeals of PC or other commissions’ recommendations) is a public policy we should return to? We should have individual neighborhoods push their ‘agendas’ thru?
Did you offer to negotiate with neighbors when your house was built?
hpierce:
I would hope that the developers of Marina’s house, my house, and your house would adhere to city processes, if such developments required zoning changes to accommodate them. And, those processes generally/hopefully include listening to current residents’ concerns.
And, if that resulted in any (or all) of us being “prevented” from living in Davis (a questionable assumption), well – at least we wouldn’t be arguing right now. (And, I doubt that any one of us would be homeless, or even saddened about not living in so-called “paradise”.) However, a lot of Davis’ appeal is related to its (relative) rejection of endlessly-expanding development, especially when compared to every other community in the valley.
Listening is one thing… caving to ‘demands’ is a different matter… funny how some folk don’t really care about how their neighbors felt about their development, yet go to the mattresses if the developers propose something in “their space” even if that space is not owned by the ones who get righteous about the use of adjoining properties.
Guess you don’t believe in the Fifth Amendment. ‘Nuff said…
BTW, am not “pro-development” [nor am I anti-development if reasonable, and if process is followed], but strongly believe in the law and process.
hpierce:
If you look at what I wrote, I didn’t stick up for “my” development.
Fifth amendment? Are you sure that’s what you meant? (Just looked it up, to see.)
In any case, I don’t really want to pick a fight with you. I’ll let it go, now.
And really, I’ve only heard the concerns indirectly. (Neighbors of the Hyatt proposal don’t seem to comment on the Vanguard, so perhaps they’re “wiser” than us.) In any case, it seems like a less desirable location for a hotel for several reasons (including neighbors’ concerns), compared to the Residence Inn site at least.
Correct… Fifth Amendment… “nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”
Courts have ruled that negative zoning and restrictions on land use imposed inappropriately, are “takings” under the Fifth Amendment.
hpierce:
Since this article is (partly) about a request to rezone a property to accommodate a hotel, are you suggesting that it is a “taking” to deny that request?
Perhaps that argument can be made, if one views the reasons for denying a request as totally “frivolous”.
Not sure if such an interpretation would put cities and counties on a constant “defensive position”, without clear guidance regarding what constitutes a “frivolous denial”.
answer….NONE right now
Why is that? The city needs revenue and the staff report indicates demand drivers.
I’ve heard that far better south american countries have hotels
yes…and one just needs to head across the border to MX…it’s not SA but still south of this place,, way better, way cheaper, better service, the government isn’t trying to kill of the citizens nor the visitors> why wast so much time around here any more 🙂
PS> According to a US Feds report of Nov 2015, as of the last full review in 2013, there are more mexican nationals returning to MX across the border than the ones (including illegals) who came into the US….that year. Why, better jobs, more opportunities, more time for family and friends, better and cheaper housing and even better education….though some cannot afford the school supplies to attend.
That is where wealthy gringos (Def: ANY gringo is wealthy compared to MX )….come in, we pay for the school necessities for children who could otherwise not attend…and those poor children who get up very early to work in the fields, or walk long distances to school and back….those poor children cream the average US child….at least the ones born and raised in this country…
The underlying question staff always answer ‘yes’ to is: “are you willing to have a pay increase?” They should be fired.
really, JL, actually the staff back in the good ole days were really good….is it that the working conditions and pay at the city staff offices no longer keep up with inflation…so the better educated are no longer there pushing paper around? when they can earn tons more in many other counties and also not be subjected to such really obstinate and highly educated folks who can run circles around them 24/7?
[edited, off topic]
One other thing, regarding TOT.
I understand that visitors of the hotel that’s on campus pay less TOT, compared to visitors to hotels in the city. (I didn’t review the regulations that govern campus TOT or the exemptions that apply, but I believe it’s administered and collected by the county – based on prior discussions on the Vanguard.)
On a related note, I wonder if the University might, at some point, allow more hotels to be built on campus (which would compete with hotels located in the city). (Actually, I’m not sure why they’re not already doing this, other than the single hotel that’s already on campus. Also wondering if the University receives funds from the existing campus hotel, and whether or not any of the analyses considered the current or potential impact of hotels on campus.)
Ron…
City TOT does not apply in the County. Only County TOT. City taxes are reported to the county, who then add the rates to the tax bills… simple concept…
Actually, thinking more, I may be incorrect… the TOT might just be paid directly to the City, just like business license fees… County may not be involved, which makes more sense, as there is a several month lag in County assessment bills…
No ‘pretense’ here, Ron, despite other comments you’ve made… if I err on factual matters, I will admit that… if I’m unsure, will say that… unlike some…
Normally, yes.
I noticed you didn’t comment further regarding “imminent” housing developments, in another recent article (after you challenged me, and I responded with some links). But, probably not worth discussing further.
Ron… did not see your response with cites… otherwise would have responded… if you can give a subject, day and time, I will… you can leave that info for me @ hortensepierce@yahoo.com…
hpierce:
I’ll just provide info here, again. These may be slightly different links, compared to the ones I provided in response to your comment, earlier this week. (If needed, you can probably find that article and related comments on your own. I’m somewhat “burnt out”, from responding to Matt repeatedly, today. And, I’m having some problems with my Internet connection.)
https://www.ucdavis.edu/news/uc-davis-build-first-50-new-homes-faculty-and-staff-west-village-2018
http://www.davisenterprise.com/local-news/new-home-construction-is-on-the-upswing-in-davis/
the campus was not allowed to build a hotel on campus due to agreements with the city…after mondavi and later the convention center were built, the tide changed and that one was allowed.
I am sure the city would not be happy, and will not agree to campus building more and more hotels as they will compete with the ones in town, both for clients, and for the tax dollars….
Not allowed? Under what authority were they not allowed, Marina?
meetings in the board room …agreements between UCD leaders and city managers, like John Meyer
gentlemen’s agreements….to have a nice cooperative and pleasant town and gown relations…
back in the good ole days, one could count on a handshake…
too many city of Davis hotels complain(ed) of the unfair advantage
Marina:
Sounds like “different times”, compared to now. (It also sounds unenforceable.)
yes in different, and mostly better, times….it didn’t matter so much if something was unenforceable.
Thanks Marina for that clarification. I wasn’t aware of any legal prohibition, and your response confirmed that. Those times were different in many ways.
Ron said . . . “I understand that . . .”
To be able to give you any help in answering your question Ron, the source of your understanding would be helpful (or possibly even your best source for the answers you seek).
Matt:
Regarding TOT from hotels on campus, I was recalling what we communicated about previously, on the Vanguard. (Unlike TOT for hotels in the city, I did not conduct separate research on that.) I’m not seeing where my original comment disputes anything that you stated, so I’m not sure why you did so.
Your question to Marina is important. Also, does the University receive funds from the hotel on campus, in some manner? If so, why aren’t they doing more to “compete” with hotels in the city? (As noted, they would “out-compete” based on TOT, at least.)
(Actually, I wonder why the University (apparently?) doesn’t view housing as a “money-maker”, as well – but that’s another topic.
Also, is hpierce correct?
Ron, if you were citing our past discussions, isn’t the word “understanding” a bridge too far? I do not ever recall you and I discussing differences in TOT rates. We did discuss the fact that the City does not get TOT from the Hyatt Place, but any disparity in rates was not discussed.
With that said, based on a telephone call I had yesterday with a Deputy County Supervisor, the TOT rate for the County currently is 8%. I have not confirmed that number with another source as yet, so take it with a grain of salt.
So there is a rate difference of 4% in the respective TOTs. Do you think hotel shoppers (1) know that that TOT difference exists, (2) consider that TOT difference meaningful, (3) include questions about TOT rate in their hotel reservation dialogue with the travel website they use.
My personal experience with Travelocity and Expedia is that they only quote hotel rates without the tax, so for the typical user like you and me, there is no way to know that there is a TOT difference.
Bottom-line I think you are making a mountain out of a mole hill.
Matt:
I recall discussing this previously with you, and that you arrived at basically the same conclusions. (Thanks for checking it out, again.)
I see/understand your points, but my (larger) point is that there doesn’t seem to be anything preventing the University from “competing” with the city, regarding hotel construction. (TOT would perhaps only be one example, where they’d have a competitive advantage. Other advantages might include location, since we’re talking about hotels that are actually located on campus.)
Still not sure if the University receives funds (in some manner) from the current hotel operation, or if it will at some point in the future, if/when the current contract expires. (Also not sure if the TOT is simply retained by the county, or if it also benefits the University in some manner.)
On a related note, I incorrectly attributed a comment from hpierce to you, in crafting one of my statements above. You probably wouldn’t notice it, but my apologies nonetheless.
Matt:
To clarify a little further, perhaps the questions that I’m asking (and related comments/responses) are more important for city officials to understand, rather than me personally. (That’s why I’m putting forth these questions/comments, on the Vanguard.)
Ron, as Marina has accurately illuminated, there has never been anything preventing the University from “competing” with city businesses. In fact, UCD and Amazon just recently announced Amazon@UCDavis, which is located in Room 182 of the Memorial Union. “Free Same-Day pickup. Shop millions of items. Order by noon, pick up today at our secure Davis Memorial Union location.” You will note that they don’t say UC Davis Memorial Union, but rather Davis Memorial Union. This is a clear effort by Amazon to cannibalize Davis shopping dollars from existing Davis businesses, as well as non-Davis businesses like Costco in Woodland.
Thanks, Matt.
Perhaps (in general) this will become more of a trend – especially if the University gains some type of benefit from such arrangements. Yet another challenge for the city, as it attempts to change its own plans (often in response to what the University does – in isolation and with different sets of rules/laws).
Not a problem Ron. It really isn’t any different than the relationship between the Yocha Dehe Wintun Nation and Yolo County. Both the Tribe and the University have a level of sovereignty that makes them immune to a substantial portion (but not all) of the rules that apply to the rest of us.
With that said, there is a pattern to your questions that I’d like to note. You pay a lot of attention to situations that have miniscule comparative weight. Your repeated concern about the impact of over-30-day stays on aggregate TOT revenue is one of those situations. Both the Hyatt House and Residence Inn are proposing 120 rooms with an average occupancy of approximately 75% when fully operational. 120 times 0.75 times 365 yields 32,850 occupied days for a year. Each 30-day stay that qualifies for the TOT exemption represents less than 0.1% of the total TOT revenue. If that same person stayed a full year, the lost TOT would only be 1.1%. The City would receive 98.9% of the TOT. At 75% occupancy the 98.9% of TOT Revenue received by the City would be in excess of $585,000 and the 1.1% of TOT Lost Revenue not received by the City would be approximately $6,500. $6,500 is a trivial amount when compared to $585,000. I am 100% sure that the city officials understand that math.
Even if the number of long-stay residents became 10, then the City’s Revenue would be in excess of $525,000 and the “lost” revenue would be $65,000. The “lost” $65,000 is not a small amount, but again it is trivial when compared to the added $525,000. Here to, I am 100% sure that the city officials understand this impact.
So, I repeat my earlier statement that you are making a mountain out of a molehill.
Well said Matt.
Again, I stated more than once (above), this (particular) concern appears to be addressed by the conditional use permit(s). But, since you’re stating that this is a “pattern” for me, perhaps you’d like to clarify the following assumptions? In other words, where are you getting these numbers from?
“Each 30-day stay that qualifies for the TOT exemption represents less than 0.1% of the total TOT revenue.” (Assuming one long-term guest per year, staying once over 30 days)
“Even if the number of long-stay residents became 10, . . .” (Each staying once over 30 days.)
You have no basis to make assumptions like that. Just pulling them out of thin air. The Residence Inn (in particular) specializes in long-term stays. That facility can essentially function as a flexible-stay, furnished apartment complex. (Much more flexible than a comparable, furnished apartment or house.)
If the long-term stays (over 30 days) wasn’t a concern, why is staff now proposing that stays be limited to 30 days, or less (as noted in the article, above). Perhaps our earlier communications helped shed light on that concern?
And again, Federal employees (e.g., audit teams conducting business in Sacramento) are (still) exempt from TOT. And, you probably have no idea how many times this would occur.
We’ve also discussed potential competition from hotels located on the University.
In any case, I’m not arguing that these issues override the potential benefit to the city.
If there’s a “pattern” to my comments, it’s that there are sometimes factors that haven’t been fully considered.
Matt:
Since you’re challenging me regarding “patterns”, I’d also suggest that you review our prior communications regarding this same issue, in which I repeatedly tried to explain that hotel guests would be exempt from paying TOT, starting on the FIRST day of occupancy, if they made such arrangements with the hotel. (Again, now seemingly resolved in the proposed conditional use permit.)
Our communications literally went on for hours, with you refusing to acknowledge an oversight (until someone else finally pointed it out, to you). (And yet, you and I were reading the very same, very short city code.)
I recall a similar communication with you, over another issue that had much less importance.
You’re good at calculations, but calculations are only as good as the underlying assumptions.
And again, I’m not arguing that some level of additional hotel construction wouldn’t benefit the city.
Ron, the calculation is right there in my post . . .
“Both the Hyatt House and Residence Inn are proposing 120 rooms with an average occupancy of approximately 75% when fully operational. 120 times 0.75 times 365 yields 32,850 occupied days for a year.”
Divide 30 days by 32,850 days and what do you get?
It’s not an assumption. Its a calculation.
Ron said . . . “If there’s a “pattern” to my comments, it’s that there are sometimes factors that haven’t been fully considered.”
You believe they haven’t been considered, but you have no evidence to prove that belief to be true. I believe (actually I know) that the factors that you have brought up over and over and over again have been very directly considered and found to be of miniscule impact.
Regarding your hypothetical “Federal audit team employees conducting business in Sacramento” I have a simple question for you. Why would a Federal employee conducting an audit in Sacramento choose to stay remotely in Davis rather than stay in Sacramento in close proximity to the location of their audit assignment? Do you really think those Federal employees will voluntarily choose to drive to their daily audit assignment from a Davis hotel in the morning and evening I-80 traffic jams rather than walk to their daily audit assignment from a Sacramento hotel?
Matt:
I wasn’t questioning your calculations. I was questioning the assumptions behind those calculations. You have no basis (evidence) to make such assumptions.
And, regarding federal employees traveling to Sacramento from the proposed Residence Inn – absolutely. It’s a convenient location to do so. (I have knowledge, regarding what federal employees look for when choosing a hotel. And again, Residence Inn is one of the chains that adjust (reduce) their rates, to match the maximum per-diem (reimbursement rate) for federal employees.
Your assumption that federal employees can consistently find an appealing hotel (that doesn’t exceed the per-diem rate) within walking distance of a work site is frankly, absurd. (Again, I have personal knowledge regarding this.) (Once again, you’re engaging in assumptions that you have no basis for.)
Ron – Of course he has a basis to make those assumptions. You may disagree on that basis, but he has one.
Actually, I suspect that the proposed Residence Inn would appeal to a broad range of visitors who have business/pleasure of some type in Sacramento. It’s a straight shot, over the causeway (an uninterrupted roadway). Staying in (and traveling from) Davis is more pleasant, convenient and safe than staying in many parts of Sacramento.
And again, I’m not saying that this a reason to not support it. But, it will encourage driving (including to/from Sacramento, in and around Davis).
Ron, how many travelers along I-80 who exit at Mace Blvd to get gas at ARCO or coffee at the El Macero Starbucks would have even the slightest notion of how/why anyone would say, “Staying in (and traveling from) Davis is more pleasant, convenient and safe than staying in many parts of Sacramento.”
Further, will the typical traveler coming to Sacramento who gets on Travelocity or Expedia or Trivago to make their hotel reservations even see a Davis hotel option on the list of hotels that Travelocity or Expedia or Trivago displays?
You are applying your Davis-knowledgeable and Davis-centric perspectives and biases to an audience that is focused on their impending Sacramento activities.
I suspect you are also grasping at straws.
Ron said . . . “I wasn’t questioning your calculations. I was questioning the assumptions behind those calculations. You have no basis (evidence) to make such assumptions.”
Again, what assumptions did I make (1) that the hotels will each be 120 rooms? There absolutely is evidence for that. (2) that there are 365 days in a year? There absolutely is evidence for that. (3) that the full operations occupancy is projected to exceed 75%? There absolutely is evidence for that. (4) that 30 days is the threshold for TOT tax exemption? There absolutely is evidence for that. I cited all four of those in my calculation. What assumption is included in that calculation?
Ron said . . . “And, regarding federal employees traveling to Sacramento from the proposed Residence Inn – absolutely. It’s a convenient location to do so. (I have knowledge, regarding what federal employees look for when choosing a hotel. And again, Residence Inn is one of the chains that adjust (reduce) their rates, to match the maximum per-diem (reimbursement rate) for federal employees.”
Residence Inn Sacramento Downtown at Capitol Park
Residence Inn Sacramento Airport Natomas
Residence Inn Sacramento Cal Expo
Ron said . . . “Your assumption that federal employees can consistently find an appealing hotel (that doesn’t exceed the per-diem rate) within walking distance of a work site is frankly, absurd. (Again, I have personal knowledge regarding this.) (Once again, you’re engaging in assumptions that you have no basis for.)
You yourself have provided one such hotel Ron. Residence Inn Sacramento Downtown at Capitol Park
You assumed that you knew how many visitors might plan to stay beyond 30 days (if the conditional use ordinance hadn’t addressed this – at least for now). All calculations beyond that don’t have a great deal of meaning, other than to provide some idea regarding the impact of each individual visit.
Regarding other Residence Inn locations, I believe that government rates are not always available, nor are rooms always available, in general. I believe it depends on the individual location and demand, as well. (I haven’t verified this, lately.) It should also be noted that state agencies (and their contractors, which are also audited) are located throughout the Sacramento region – not just in and near the Capitol. From what I’ve observed, audit teams usually drive to their work sites (often carrying laptops, paperwork).
Again, the proposed site of the Davis Residence Inn is quite convenient and appealing to federal employees (and others who have business/pleasure in and around Sacramento). Due to its proximity to I-80, it is a location that faclitates driving.
Matt:
I should clarify that you didn’t actually make any numerical assumptions, regarding the number of visitors who might have planned to stay beyond 30 days, or the number of federal employees, etc. But, you downplayed the possibilities (seemingly based on your own thoughts).
I believe I’ve previously suggested that other cities which host Residence Inns (or, the company itself) might have provided such information, if requested. (Not sure.)
And again, it appears that the conditional use permit addresses prohibits stays beyond 30 days (at least for now). It seems that whoever made that suggestion believed that it was at least somewhat of a concern. Perhaps our prior communications helped.
Ron, how did I “downplay the possibilities”?
Matt:
Suggest that you review all of your comments in this (once-again) ridiculously-long thread. You don’t have to go back very far to see.
A “general” pattern that I’ve noticed about you – you don’t seem to easily acknowledge points that differ with your views. And sometimes, you attempt to “back up” your views with calculations that don’t necessarily prove much. (Often, it seems to starts off with you challenging a statement I’ve made – as in this case, I believe.) That’s how these threads become so long. (And, I guess I’m stubborn enough to keep responding, for awhile at least.) I suspect that we’ve lost a lot of “readers”, by this point. And, I’m losing interest, as well.
Ron, you are unilaterally assigning “views” to me in situations like this where not enough data is on the table to support a fully informed “view.”
In order to reach a point where an informed view can be reached, I try and emulate the Pew Research Center and share data in a spirit of non-advocacy.
May I make a suggestion that you ignore my name when you read one of my posts and focus only on the data that is being provided and not the person providing the data.
Matt:
I was responding to your challenges (including the calculations you presented).
This is an example of a “view” that you presented, above:
In other words, you’ve asked a very specific question (as a challenge to me), without considering the “universe” of potential customers who might prefer to stay at the proposed Residence Inn (while conducting business or pleasure in the Sacramento area). When you frame a question in that manner, you are expressing a view. (Nothing wrong with expressing a view, per se. But, you often seem reluctant to acknowledge it.)
The bottom line seems to be that neither you nor I know how often this will occur, or how many visitors will be federal employees, for example.
One last point (that I hadn’t thought of, before):
Federal auditors also conduct audits at Universities. Therefore, it seems that either of the proposed hotels may host federal auditors (who may actually conduct audits at UC Davis). I don’t know a lot about this particular area of auditing:
http://afs.ucdavis.edu/our_services/contracts-e-grants/policies/agency-audits.html
Ron, the calculations were/are objective facts. It appears from your comments above that you feel challenged by calculations and facts? You shouldn’t be. It also appears that you feel challenged by the Socratic Method. You shouldn’t be.
Calculations and facts and rigorous questioning are engaging. I put those facts and calculations and questions out to engage you … to draw you into actively participating in the due diligence that your questions frequently deserve … to hold up a mirror to you when you lay out intriguing ideas that are worth digging into and understanding better.
Many of your questions present exciting intellectual engagement opportunities. They are invitations to go on a journey of the mind.
Rest assured that in the future when your questions and statements expose the Vanguard and its readers to opportunities to learn more about our community, I will work hard to (1) provide you with a ticket for that voyage of discovery, and (2) encourage you to be an active participant in and contributor to the voyage.
I’m sorry if you find that due diligence invitation challenging.
Ron said . . . “Federal auditors also conduct audits at Universities. Therefore, it seems that either of the proposed hotels may host federal auditors (who may actually conduct audits at UC Davis). I don’t know a lot about this particular area of auditing:”
Okay, following the model I described above, are you willing to do the legwork/homework to get a clearer understanding of where those auditors currently stay when they conduct any audits at UC Davis? Are you willing to do the legwork needed to get a facts-based sense of whether those auditors do most of their audit work on-site (an audit at UC Davis) or remotely (an audit of UC Davis)? Are you willing to do the legwork to determine the distribution of federal office locations that those federal auditors come from? Are you willing to do the homework to determine if a federal auditor whose office is in Sacramento or the Bay Area completes the audit activities as a daily commuter?
Are there other questions I haven’t asked above that you will need to ask if you are going to transform your federal employees eroding TOT collections hypothesis into due diligence?
Hey – you’re still there! 🙂
They were facts, in that the numbers you presented seemed to add up, and seemed to provide some insight regarding the potential impact of single stays beyond 30 days (if the conditional use permit(s) hadn’t addressed it). It is useful information, if one knows how often that particular issue might have occurred. But, there was no presentation from you (or me, for that matter) regarding how often that would have occurred. (Really, just an intellectual exercise, since that particular issue will hopefully be addressed in the conditional use permit(s), at least for now.) I’d like to think that our prior communications may have had something to do with addressing that issue in the conditional use permit, thereby saving the city some money. (Of course, I’m not privy to the process that caused it to be addressed.)
Me? No. I was just bringing the point up that it occurs (especially with some particular hotel chains, from what I personally observed). Just pointing it out, in case it wasn’t thought of when performing analyses regarding TOT (and daily destination points, for visitors in general).
Hope that you have a good (remainder of the) evening.
Hi Ron and Matt,
I read a few of your comments and cringe. The misuse of the word “fact” here is a little unnerving to me. A fact in general is an underlying piece of data. Matt’s calculations are not facts, they are more aptly described as models based on underlying data and assumptions. They are reasonable models as far as they go, but they are not themselves objective facts. The assumptions change, the market changes, the calculations will have to change.
Matt asked . . . “Are you willing to do the legwork to determine the distribution of federal office locations that those federal auditors come from?”
Ron replied . . . “Me? No. I was just bringing the point up that it occurs (especially with some particular hotel chains, from what I personally observed). Just pointing it out, in case it wasn’t thought of when performing analyses regarding TOT (and daily destination points, for visitors in general).”
So your own points are not important enough to you to expend any effort to determine if they have any validity. How do you expect anyone to take you seriously when you don’t take yourself seriously?
Nonetheless you feel you and your ideas are targeted/challenged by other posters. You are an intriguing package Ron.
Good observation David. However, I will quibble with one of your points. The calculations don’t change. Annual Occupied Days is always going to have the same calculation, specifically (1) Hotel Capacity times (2) Occupancy Percentage times (3) 365 days in a year. The inputs to the calculation can (and do) change, but the calculation itself does not change.
Similarly, the calculation of what proportion a 30-day Stay is of the Annual Occupied Days will always be the same, 30 divided by the Annual Occupied Days. The inputs to the calculation can (and do) change, but the calculation itself does not change.
With that said, there has been a lesson I have learned from this latest discussion with seemingly endless Ron. Specifically, in the future when he throws out one of his hypothetical “what if” or “what about” scenarios, I will respond to him as follows, “Ron, are you willing to do the legwork/homework to determine the level of relevance/validity your concern has?” If he replies that he isn’t willing to make that effort, then it will be easy to wonder how he can expect anyone to take his concern seriously when he himself won’t take it seriously.
geez, Ron….the UC is a non-profit >>.and not allowed to make money…
thus you, Ron, who I find so much smarter than the average DVer actually finds things interesting and can pull strings, do listen and observe and ask good follow up questions
you see, since UCD already owns the land, UC does have an unfair advantage….
land cost in Davis is very high…they save on that…also the do not have to pay the TOT and UC, being a part of the state, also saves on sales taxes etc.
Much of what is now being discussed is also why city/town relations are also very important at the highest levels.
Once John left the city and joined the UCD as Vice Chancellor, some things shifted.
And, John was good for the UCD and the town/gown relations….Perhaps not so good for the city as he left a huge hole…
Marina:
The “boundaries” regarding what the University can/cannot do to “make money” are not entirely clear to me, at least. (However, I assume that there are laws regarding this.) It seems that the “lines” are becoming blurred, as state funding is reduced, and the University pursues grants and higher tuition from non-resident students. Although the University itself may not make a profit, funds presumably support those working there (which can conceivably result in a conflict of interest, under some circumstances). (Also, I’m not sure what is done with funds received from the Mondavi Center, as another example.)
One other thing that I wonder about is what happens when a contract (between the University and a contractor) expires or is terminated. From the article below, it seems that this is already occurring at West Village, with the first 50 (of 475 possible) single-family homes due to go on sale in 2018. (Estimated to be 20% less-expensive, than comparable market rate homes.) So, perhaps this proves your point.
To some degree, operations at the University are a “black box”, even though what they do has significant impacts on the city and its decisions.
https://www.ucdavis.edu/news/uc-davis-build-first-50-new-homes-faculty-and-staff-west-village-2018
Marina, is UC a non-profit or a not-for-profit?
I suspect it doesn’t exactly fall into either of those categories and actually could better be considered as part of the state government.
Here is what appears to be a valid cite to answer your question… http://www.ucop.edu/general-counsel/guidance/legal-status-and-role.html
Thank you hpierce. For those who do not want to click on the link, here is what it says:
501(c)(3) corporations are not-for-profit. They are allowed to make profits, but are restricted in how they can distribute those profits. The following is the IRS’ description of what a 501(c)(3) is:
The following is a comparison of nonprofit vs. not-for-profit:
UCD would never qualify as a “non-business entity.”
Most ideas on the Vanguard are challenged by other posters. It’s to be expected. Most commenters are biased toward one side or another, when making statements and asking questions. And, they usually don’t try to hide this.
The difference with you is that you essentially state that your comments, calculations, and inquiries do not display such biases, and that you’re only presenting objective facts. However, the substance of your comments, calculations, and inquiries show that you do have such biases (as most commenters do).
Me too. 🙂 And, I’ll have to take responsibility for my part in that. (Fortunately for your readers, I suspect that most readers of them have moved beyond this thread.)
There is the inherent problem where some folk posit opinion as fact.
And yes, this is becoming a “dead thread”… (opinion, not fact)
You are right hpierce, and I will take responsibility for my part as well. As I said in my response to David above, I will be implementing a permanent solution to that problem going forward.
I have pretty much absented myself from the Vanguard over the past month because the conversations had gotten very redundant (or were about topics that are outside the scope of my active interest), but Ron does know how to push my buttons with his “What about” comments. It never occurred to me until last night that he really does not want to do the legwork/homework needed to determine the relative weight of his concern. That was my bad. I was blind, but now I see.
Ron, what bias exists in calculating the percentage of the Annual Occupied Days that a 30-day stay represents? I see absolutely no bias there. The numbers are in the public record and the calculation is straight mathematics.
My opinion is that the bias is in the eyes of the beholder.
My laugh of the day, probably the weekend! Best tautology have seen ever! X two!
Bravo!
But that is just in my perception of my biased opinion…
Glad to give you a laugh.