It is a small step forward, but it marks the first formal step, as the application for Aggie Research Campus begins to be processed by the city. On consent for Tuesday night will be a resolution that authorizes the city manager to enter into a contract with EPS (Economic & Planning Systems, Inc.) to provide: an updated study of the market demand assumptions, the economic impact analysis, the fiscal impact analysis, and the financial feasibility analysis and public financing evaluation for the Aggie Research Campus.
The cost is estimated at $89,730 to be paid for by the applicant.
The city will ask EPS to perform four tasks. First they will prepare an updated market demand analysis.
The staff report indicates: “Tasks include evaluation of market supply and demand factors, competitive position, prevailing lease rates and development costs…”
They will review and refine the static pro forma for key land uses and arrive at land and asset value assumptions.
Second they will be asked to prepare an economic impact analysis. This will examine the impact of the project on Davis and Yolo County to determine “industry impacts generated from the ongoing, long-term, direct industry impacts and mix of employment types associated with the two buildout assumptions for the three scenarios.” They will also assess the multiplier effect and total employment, employee compensation and output, specifically looking at tax impact and standard-number of jobs.
Third, EPS will once again prepare a fiscal impact analysis. Here they will build on previous work to analyze and evaluate impacts of the ARC on the city’s generation fund.
They will look at key housing assumptions to determine the impact of housing on the model. They also determine whether the project is estimated to produce a net fiscal deficit or surplus.
Finally they will be asked to determine the financial feasibility analysis. This will test a variety of development and market assumptions to determine how possible changes in market conditions will impact the overall ability of the project to achieve stated and required returns.
This marks a first critical step in a process about to speed up with public hearings scheduled in October (Finance and Budget Commission), November (Open Space and Planning Commission), and the council getting the project in late November and early December.
This marks a new phase of the project that was re-released under a new name this past June.
As project manager Dan Ramos explained back in June, “We’ve used the past three years to further investigate and confirm the best approach for ensuring long-term project success, delivering an innovation campus that meets the economic development objectives identified by the City and that is a great fit for Davis.
“We are confident that the path now proposed will deliver an innovation and technology center that respects and reflects Davis values, is environmentally responsible, benefits the local economy, and is consistent with the vision that the City has been discussing and analyzing for nearly a decade.
“We see it as a campus, that kind of environment,” Dan Ramos continued. “Live, work, innovative area.
“It will be high-density housing,” he said. “A retail component below where we have the coffee shop, the brew pub, or whatever it might be where people might hang out, interface and do their thing.
“We’re not talking about single-family homes,” he said importantly and plainly. In addition, Dan Ramos told the Vanguard that ARC will “consider” and is open to a “co-housing” model. They have begun exploring such innovative models as they consider a more specific proposal when it comes to council.
He noted that this addresses what the users want – housing to house their workers. He sees it as a draw for both new companies moving to town, as well as existing companies looking to upscale and trying to figure out where their employees would live.
“This is not a housing project,” he said again, firmly and bluntly. “If anything this is an accessory use to what we’re trying to do. It helps us enhance the innovation or the research park part of it. It helps us be successful.”
EPS will now analyze the project on a number of fronts and the process moves forward to the approval process.
A key question will now be – when will it be on the ballot? That issue has become more complicated, given the overlapping considerations. It does not seem likely they would choose March, which would be just a few months off from the December approval date. They could put it on for November, where it would run concurrent with the council election, or they could have a special June election.
—David M. Greenwald reporting
All costs are paid by applicants
the city hires the company and then gets reimbursed in order to avoid that very problem
In its zeal to add editorializing adverbs to statements made by the developer in June—“he said importantly and plainly…” and “he said again, firmly and bluntly…,” the Vanguard has completely buried the lede in this story: the project is being required to do a new EIR.
Huh? EPS doesn’t do EIRs and how do you do a new EIR and have the project to council by December 3???
Basis Rik? Certainly not in the article… meant as a ‘leading’ question…
Being required to do a new EIR would certainly call the timetable discussed in the article into question.
And, I question the need for a new EIR… however, the timetable is questionable… as you posit, if the Dec “decision” by CC is project approval…
David may have it wrong as to what “decision” is to be made… the timeline looks right to make a decision as to what other CEQA docs/actions may be required… the economic study is a logical first step, though…
There certainly will need to be CEQA docs/actions… to make the project as ‘bullet-proof’ as possible. Not seeing that by early Dec.
I say this, as being favorably inclined towards the project.
Correction… couldn’t beat the “shot clock”… David posits “project approval”, not Ron…
[proof reading/correcting, once posting is a b-word]
Another commenter noted the age of the traffic study for the EIR.
Not sure exactly when the study was done (several years ago, I believe), but I think it preceded the problems associated with the “Mace Mess”, as well as most of the impacts from cell-phone applications, redirecting traffic into the area.
In my opinion, the applicant is actually making things more difficult for themselves, to gain voter approval for the proposal. (Not that I’m “unhappy” about that.)
Sidebar… had 2 full minutes left on the “shot-clock”, and got the “you can no longer comment” message, David…
“David may have it wrong as to what “decision” is to be made… the timeline looks right to make a decision as to what other CEQA docs/actions may be required… the economic study is a logical first step, though…”
I’ve simply reported what the city has disclosed. If that timeline changes, it changes.
I can confirm that the city has stated that this is a contract for fiscal analysis, not CEQA and there are no plans at this point to revisit the EIR so I’m not sure where that is coming from
[author name redacted ] stated “I can confirm that the city has stated that this is a contract for fiscal analysis, not CEQA and there are no plans at this point to revisit the EIR so I’m not sure where that is coming from.”
Try page 2 of the staff report PDF: “WHEREAS, the Department of Community Development and Sustainability has determined that a update to the certified EIR is warranted prior to the project moving forward for entitlements.”
http://documents.cityofdavis.org/Media/Default/Documents/PDF/CityCouncil/CouncilMeetings/Agendas/20191008/05A-EPS-Contract-ARC.pdf?fbclid=IwAR2bRVK7Vgh-3ihjb9dydoSG-rbfP0iEBKeh09d7D4l9chOu2zZcKlnSabQ
Connect the dots… someone lies… or, charitably, is clueless…
One problematic thing from the previous analysis is that it doesn’t discuss—as the EIR does— the cannibalization of existing uses by the MRIC/ARC project. In other words, some existing businesses are projected to move there and leave their existing sites vacant for long stretches because of low absorption rates for those kinds of uses.
It also assumed land valuations at MRIC/ARC way higher than regional rates for office/industrial/flex space. This substantially adds to the projected fiscal benefit, but is totally unrealistic in terms of actually filling that space.
Another issue: it included residential development induced by the project only in the positive side of the ledger of fiscal impacts—just the increased revenue. It did not look at fiscal hits to the budget which is a huge blind spot—residential development typically is a fiscal net negative for jurisdictions.
If the new study merely tweaks/updates some numbers without addressing these substantial flaws, it will be inadequate for really looking at the fiscal impact of the project.
So what? The City will continue to receive property taxes on the newly vacant building in addition to the new revenues from the business moving into the new facilities that didn’t exist before. The community benefits by keeping the jobs of the existing growing company in town rather than seeing them move to a new location. The only party that ‘loses’ in your scenario is the existing landlord who now has to find new tenants, which is just business as usual.
If those existing properties remain vacant (or are eventually converted to housing), then there is no net fiscal gain. (Assuming there’s one to be had in the first place.)
This is similar to the situation in which there can be an over-abundance of hotels, in regard to the amount of market demand. In that case, transient occupancy tax is simply “taken” from one source, and transferred to another source.
The “loser” is open space/prime farmland, those stuck in newly-created traffic, etc.
Perhaps at some point (e.g., after losing at the ballot box), the owner of the MRIC/ARC site might consider using the land as an “agricultural mitigation” bank, for other developments. In that way, he might still extract some financial gain, from the land.
It’s way-past time that the city start looking at preserving prime farmland that’s actually under threat of ill-advised developments.
All development (particularly comm/ind, but including res) is either zero sum game, or always definite loss, right?
Not trying to put words in your mouth… seeking clarity… stasis is the only viable option…
“If those existing properties remain vacant (or are eventually converted to housing), then there is no net fiscal gaiN…”
There are several problems with this statement. The first is that it ignores the reasons for the move is likely an upsizing which would have a fiscal gain. Also, it is highly speculative that someone would move and then not be replaced.
David… methinks you fully miss the ‘point’ being made… and feed into those “points”… I might be wrong in that…
I may have – but posting cryptic comments doesn’t make it easier.
The bottom line is that there is no shortage of commercial space, especially from a regional perspective.
For that matter, there are cities which are prevented from expanding (or choose not to), but are nevertheless among the wealthiest places on this planet.
There’s no way that this development competes on price. Companies looking for an abundance of cheap, large spaces have plenty of options, nearby. And, they will continue to have that option even if this development is somehow approved.
Profit from housing on prime farmland outside of the city’s boundary appears to be the primary motivation for this proposal. We call this “sprawl”.
I agree with Ron, if you’re concern is growth in Davis only and you don’t care about economic development, jobs, and fiscal revenue locally, then there is plenty of commercial space in the region that Davis can be bypassed without doing harm regionally.
Sure there is, in this case, we would be going from a situation with one occupied building in the City and undeveloped land in the County to one larger occupied (and newly developed) building and the existing, now vacant building, both located in the City. How much revenue do you think the City gets now from that undeveloped land located in the County?
The property taxes continue to come in regardless of how long the old building stays vacant, and the City stands to gain from new tenant improvements, and the potential for a change of ownership and reassessment of the property when a new business takes over the vacant building.
How much does it “cost” the city, to maintain the land as is? (Without having to provide services for the new housing within the development?)
How much more will it cost residents (in both time and money), who would then be stuck in newly-created traffic? How much more will it cost the city to serve other peripheral and infill housing developments which would likely result, from this development?
How much would it cost the environment, regarding additional greenhouse gasses?
Sure, you can put a price tag on anything you’re willing to sell, or allow to be sold. However, the motivation behind this development is *NOT* to create a “fiscal profit” for the city.
It is not speculative: The EIR “importantly,” “plainly” “firmly,” and “bluntly” states that MRIC/ARC will cannibalize existing properties and that there will be a significant amount of long-term vacancies in currently occupied industrial/commercial/office properties.
And because the City’s revenues from these properties will dramatically decline (property tax + business/use/sales taxes), this needs to be accounted for in looking at the net impact of MRIC/ARC.
I’d also like to see an analysis (regarding the net fiscal impact) of all of the sites within the city that have already been converted (or are in the process of being converted) from commercial/industrial, to residential or semi-residential uses.
Supposedly, because there was “no commercial demand” for these sites, based upon some questionable claims.
How would you do such an analysis – particularly if there was not commercial demand for the site?
If there’s no commercial demand for the various sites around the city (several of which have already been converted to housing), then that indicates a lack of overall market demand for commercial sites.
The “reasons” put forth on here regarding the lack of demand for given sites (some of which are several acres in size) defy basic logic.
At one point, however, David published a table which showed that Sterling (for example) reached a point at which it created an ever-increasing deficit for the city. (That site was previously zoned industrial, as I recall.)
If the building is vacant because a business moved to a new location within the City there will be no net loss of revenues for the City since all of the business activity continues at a new location. The only ‘loss’ is for the landlord. If said business moves into a newly constructed building then it will be a net positive for the City due to the added site on the tax rolls. Where the City loses ‘big time’ is when a business moves out of the City because there is no space available to build its new location, which is what is happening now, repeatedly. Any business that leaves is a net fiscal loss for the City.
Mark West: you clearly haven’t read the EIR that states that a significant number of properties would remain vacant for a significant amount of time because of the low projected demand/absorption rate for these types of uses locally.
[edited]
It doesn’t matter how long they remain vacant Rik Keller, the City will continue to collect the property tax in perpetuity. If the landowner gets tired of holding on to a vacant building they can always redevelop or sell, then the City gets the benefit of a reassessment as well. This situation is not a problem for the City.
Mark West: you still haven’t read the EIR. And I stated initially before your uninformed comments, if the fiscal impact analysis doesn’t take into account the loss of use/sales taxes on those properties, it will be incomplete and deficient.
Rik Keller – I’m not discussing the EIR, I am addressing the false argument that you continue to repeat here. If a business moves locations but stays in town, there is no loss to the City as all of the business activity and resulting taxes remain. If businesses move from existing locations out to a new business park and leave behind vacant buildings available for new tenants, that is a net positive for the City. It really doesn’t matter how long those old buildings remain vacant, the City still receives revenues from them. The likely outcome is the rents on the older buildings will be lowered to entice new tenants, resulting in new revenues for the City. What creates a loss for the City is when businesses leave town, which is the current situation due to our lack of appropriate developable land.
Mark West: you are misrepresenting that I am saying. And if you actually had read the EIR, you might have an understanding of the issue. One key thing: it is clear that a significant portion of the projected tenants of the project would be existing local businesses that would abandon their old quarters, but given the low demand for these uses, those sites would remain vacant. To a large extent, MRIC/ARC would be simply be cannibalizing existing development and creating no new value.
If you actually want to address what I said, here it is again (warning addressing this with something other than facile strawman constructions will actually require reading the relevant documents):
”One problematic thing from the previous analysis is that it doesn’t discuss—as the EIR does— the cannibalization of existing uses by the MRIC/ARC project. In other words, some existing businesses are projected to move there and leave their existing sites vacant for long stretches because of low absorption rates for those kinds of uses.
It also assumed land valuations at MRIC/ARC way higher than regional rates for office/industrial/flex space. This substantially adds to the projected fiscal benefit, but is totally unrealistic in terms of actually filling that space.
Another issue: it included residential development induced by the project only in the positive side of the ledger of fiscal impacts—just the increased revenue. It did not look at fiscal hits to the budget which is a huge blind spot—residential development typically is a fiscal net negative for jurisdictions.
If the new study merely tweaks/updates some numbers without addressing these substantial flaws, it will be inadequate for really looking at the fiscal impact of the project.
The “other” losers are those who mistakenly think that this development would not encourage development of other, peripheral properties (such as Shriner’s, Covell Village, etc.).
Also note that one of the considerations that SACOG uses (when determining RHNA requirements) is the number of local jobs, income levels, etc. I recall that the existing EIR notes that the development would not even provide sufficient housing for the demand it creates.
UC Davis is already THE primary job source, and is the reason for the net inflow of commuters through Davis.
Covell Village (aka ‘Crossroads’) is surrounded on 3 sides by development… “peripheral”? I think not…
Same for the land under the Mace Curve?!? Two sides developed… the third ‘side’ is an arterial street…
Whatever…
You can own your opinions as to what is “peripheral”… I do not share your apparent definition… thanks to Measure J, the apparent ‘gaps’ in logical planning got missed (but the actual project [Covell Village] was a “dog” – but the property should be #1 priority for growth area)…
Whatever…
Covell Village is outside of city limits (the very definition of “peripheral”), and is prime farmland. That’s why it (along with MRIC/ARC) is subject a Measure R vote.
Your personal definition of “peripheral development” is irrelevant.
I believe that the inside of Mace Curve is also outside of city limits, but is (as you noted) within the Mace curve. Presumably, it would also be subject to a Measure R vote.
If I’m not mistaken, you once noted that the property inside of the Mace Curve actually extends to the other side of Mace. Perhaps a reason that it hasn’t already been developed.
Shriner’s is neither inside the curve, nor within city limits.
But yeah – whatever you prefer to personally call these other peripheral properties, MRIC/ARC would likely increase pressure to develop them.
Again, Davis already has an “excess amount” of jobs, due to UC Davis. That’s why there’s already a net inflow of commuters, through town.
Add even more jobs, and the clamor for even more sprawl will expand. (As if that wasn’t already occurring on this blog, on a daily basis.)
And then, there’s the upcoming site in Woodland, which will also cause an increase in traffic along Highway 80, Mace, Covell, and Road 102.
In all honesty, I don’t know why anyone (other than developers and their allies) keep pushing for more. In fact, I suspect that few do, other than those folks.
The problem is that you are conflating peripheral with inside versus outside of the town. You could have a peripheral development that it in the city and an infill project that is not. I would argue Cannery was peripheral development, Nishi was infill. Carry on.
The Cannery was within city limits (and has previously been developed), Nishi was not within city limits.
That’s why the council was able to approve the former on its own, but not the latter.
Interestingly enough, some supported the Cannery as an “alternative” to Covell Village.
That is not the point in dispute
I don’t see anything in dispute.
If you’re claiming that Nishi “seemed” more like infill development than the Cannery, I would not necessarily disagree.
Regardless, MRIC/ARC is clearly peripheral development proposal, subject to a Measure R vote.
Then fair enough
Oh, g 🙁 😐 d, EPS. The same people who did the so-called economic report on the so-called Yolo Rail Relcation project. If you want a consultant to paint a unicorn in the sky and make it fart rainbows on Fridays, you have found your company.
[edited]
If anything, I would argue that EPS is fairly conservative in their assumptions.
[edited]
The Yolo Rail Relocation report assumed the removed track would be used for apartments in Davis, and used that as an economic benefit. This is an insane assumption.
And don’t get me started on the Yolo Rail Relocation Scam itself. I said don’t get me started. I said don’t get me started. I might start appearing in front of the Council again on a weekly basis with my Yolo Rail Relocation Scam t-shirts. Don’t get me started . . .
I don’t actually care about the rail relocation project. Your characterization of EPS is not only false but if they cared could get you sued for libel. I have seen their work on a number of matters and it’s solid at worst.
I don’t care that you don’t care.
They wrote that report to paint a rosy economic picture just like they thought their client would like, using completely unrealistic assumptions. Why are you such a defender of EPS?
If I cared, I could sue you for libel for some of the things you’ve said about me on this blog. Except none of those exist, because DS has removed them all because they go clearly against Vanguard comment policy are are devoid of content except for personally insulting me instead of actually using a substantive argument.
You are the greatest defender of the Vanguard and EPS on Earth. What prompts you to defend such organizations? I could understand being neutral, like you are about Yolo Rail Relocation, but why be so defensive about a blog and a consulting firm ?
Alan… some folks’ ‘purpose’, is, as Jefferson could be paraphrased, “self-evident”…
I agree 105% on the relocation project scam… they might have well have called on the phone, and said (pick your accent), “We’re from Microsoft, your Windows system is compromised… please let us access your computer to remedy that…” Yeah, right… [an example of where two positives can equal a ‘negative’…]
WM, you can take that to h(e)art.