Onward & Outward

February 04 2019

Surrounding cities capitalize off of UC Davis’ growth — and the City of Davis’ slow-growth mindset

Comstocks Jan 29, 2019 By Laurie Lauletta-Boshart

After graduating from UC Davis last June, Carson Wittler, a 23-year-old computer engineering major from Oregon, scoured the Capital Region for a job in his desired field of software development. He had a few mediocre offers from companies in Sacramento and Folsom, but they couldn’t compete with the money he could make at a tech company in the Bay Area. After interviewing with several, he took a job as a software engineer at Apple’s Cupertino facility in September.

“Davis was home for me during college, but I couldn’t find anything that was compelling enough jobwise for me to stay in the area,” Wittler says.

As host to a world-class university in UC Davis, the opportunity for the region to preserve important research and technology coming from campus is considered vital. Broadening the footprint of the university in these sectors could help retain talent (32 percent of UC Davis’ California alumni call the greater Sacramento area home; 38 percent live in the Bay Area) and drive economic development in areas that need it. The Davis campus has one of the highest undergraduate STEM enrollments in the University of California system at 54 percent. Last year, the university landed at No. 24 on U.S. News & World Report’s Best Colleges Rankings for the most innovative schools, yet, the university’s emphasis on technology and innovation is not translating to approval of major development projects in Davis. In the last five years, three different technology centers proposed here — the Davis Innovation Center, Nishi Gateway and the Mace Ranch Innovation Center — were either shot down by voters, moved to more developer-friendly cities or stalled.

City representatives say focusing on right-sized opportunities that are appropriate for Davis is the key to future development. Meanwhile, with projects such as Aggie Square in Sacramento and Davis Innovation Center now moving to Woodland, Davis’ aversion to development could be a potential gain for surrounding cities.

Barriers to Building

To pay for the many amenities that Davis residents enjoy — parks, trails, top-rated schools and youth programs — the city sought additional tax revenue in 2014. It invited proposals for projects focused on innovation and technology-facility development and received several options based on its close proximity to the university. According to David Greenwald, editor of the Davis Vanguard, a community-watchdog publication, the City saw the idea of innovation centers as tech transfer — taking university research and transferring it to the private sector — as the best way to stay true to Davis’ identity as a community, while allowing it to economically develop.

But one of the biggest obstacles in getting projects approved in Davis is Measure R, a referendum that requires Davis voters to approve any plans to rezone agricultural land for other uses. The measure has been a major sticking point; however, support for the legislation (which passed as Measure J in 2000 and was renewed as Measure R in 2010) is high and in keeping with the town’s slow-growth mindset. (The measure is scheduled to sunset in 2020.)

“I voted for [Nishi Gateway] and urged others to do the same. We definitely needed extra housing, but we needed research and development space even more.” Carson Wittler, computer engineering alum, UC Davis

“The train is moving on without Davis on board because Davis has very stringent land use policies that other neighboring cities don’t have,” Greenwald says. “I believe we could have built a lot of things that wouldn’t have really changed this community, but would have helped with our businesses and creating jobs — and given university people the chance to stay in Davis and create private ventures, get jobs at startups or even create their own companies. I think it’s been an opportunity lost.”

Nishi Gateway received a green light — but only after significant transformation. It was originally proposed in 2014 and approved by the Davis City Council in February 2016 as a mixed-use project with 325,000 square feet of research and development space and 1,500 homes on a parcel sandwiched between Putah Creek, I-80 and the Union Pacific Railroad. Voters ultimately rejected the project in June 2016. When it came back as Nishi 2.0 in 2018, it was approved — with student housing for 2,200 and no R&D space.

Wittler says that many of his fellow students opposed the original proposal due to its lack of affordable housing, but he thinks those peers missed the bigger picture. “I voted for the project and urged others to do the same,” he says. “We definitely needed extra housing, but we needed research and development space even more.”

Another proposed project, the Mace Ranch Innovation Center, called for a combination of research, manufacturing, hotel, retail and restaurant space. But after an unfavorable economic analysis estimated the project would generate less than half the expected revenue of similar innovation centers, the 2-million-square-foot, 212-acre project north of I-80 and east of Mace Boulevard is currently on hold. According to project manager Dan Ramos, vice president of Ramco Enterprises, open-space requirements was a factor. In addition, a request to add workforce housing to the proposal for faster build-out and immediate revenue was shot down by the city council, and the required infrastructure would cost an estimated $50 million, about four times the industry standard. Currently, there is no timetable on when the project will proceed.

The Davis Innovation Center, an innovation and research campus proposed by Hines and SKK Developments, was a 208-acre site at Highway 113 and Covell Boulevard near the university campus. As soon as the project was proposed in fall 2014, it faced pushback from residents — many from the Binning Tract neighborhood in North Davis, outside the city — who worried that the large development would abut against their homes. Citing concerns about getting the project approved by voters, Hines pulled out in May 2015 while still in the preplanning stages, and the project was left without a backer.

Finding the Right Fit

Tom Stallard, then the mayor of Woodland, saw the Hines-Davis’ loss as Woodland’s potential gain. The Woodland Research and Technology Group, consisting of industry professionals, was formed and along with the landowners, proposed a 350-acre research and technology park that was approved as part of the City of Woodland’s General Plan in 2017. The group hopes to break ground in 2020.

The site will combine live-work housing and retail space with technology and innovation options aimed at capitalizing on the agricultural technology and other research coming out of UC Davis. The team anticipates having 2.1 million square feet of commercial space at build-out that includes a combination of office space, wet and dry labs, research and potential incubator space, and high-tech and light manufacturing. Several thousand jobs are expected to be created over the same 20-year period.

“It’s moving forward with no opposition and great support from local government officials and the local community,” says the team’s economist Lon Hatamiya. The group is also developing a relationship with UC Davis and has met with Vice Chancellor for Research Prasant Mohapatra, the university’s project liaison.

Further west, Robert Burris, CEO of Solano Economic Development Corporation, has his eye on innovation prospects as well. Burris’ office is in discussions with national and international companies in the agriculture biotech space and medical device fields that value being near UC Davis. Currently in Solano County, over 1,600 acres are zoned for ag and food tech research and manufacturing, and nearly 500 acres within view of the UC Davis water tower, which Burris indicated as an important landmark for many companies considering the area.

Dixon and the northeast part of the county already have the appropriate zoning for innovation and technology activities, and Burris envisions a variety of facilities, greenhouses and experimental cropland that might go there. Vacaville is also generating interest for its established presence in biotech. In addition, Solano Community College has a biotechnology center and is one of the few community colleges offering a bachelor’s degree in the same field, creating an educated and available workforce for biotech companies that locate there.

In the next six months, Burris will be courting companies to set up their facilities or become anchor tenants in Solano County, selling the county’s proximity to the university, available space and affordability. “These kinds of facilities can be very expensive to create and come with a lot of regulatory hurdles, and what we are looking to do is keep those obstacles to a minimum,” he says. Based on preliminary development design guidelines, zoning regulations, typical facility costs and other factors, Burris estimates that within the next decade, Solano County could see roughly 4.3 million square feet of development and $1.1 billion in investment with approximately 11,000 jobs.

UC Davis Looks Outward

With private developers and jurisdictions capitalizing on the opportunity to align with UC Davis, the university began to pursue opportunities of its own.

Chancellor Gary May has been the catalyst for much of the forward motion in getting technology from the university out to the marketplace. In his former position as the College of Engineering dean at Georgia Tech, May was instrumental in creating an innovation campus known as Technology Square in Atlanta. He helped broker a partnership between the City of Atlanta and private investors to leverage and advance Georgia Tech programs for the purpose of economic development.

“The ideas that are coming out of the university are really first class. I do think it’s unfortunate that we haven’t done a great job of retaining the transfer in our own community, but I also feel that we have to pull the community along.” Gloria Partida, UC Davis lab manager and Mayor Pro Tem, City of Davis

Before taking office in Davis, the chancellor began discussions with Sacramento Mayor Darrell Steinberg for a similar UC Davis project called Aggie Square, envisioning it as an extension of the university campus that links research, faculty and students with local businesses. The UC Davis Medical Center in Sacramento was identified as the ideal place to start their shared initiative. The UC Davis Institute for Regenerative Cures was running out of space for its advanced stem cell activities and companies were increasingly interested in leasing adjacent space in the building — as a result, some master planning for its expansion was already underway. The chancellor recognized an opportunity to create a larger UC Davis Sacramento campus that could leverage innovation from across the university and propel economic development.

“It’s really about building on an existing strength that the UC Davis School of Medicine has already started,” says Robert Segar, Aggie Square’s planning director and UC Davis’ associate vice chancellor for campus planning and environmental stewardship. “But this is just a starting point. We want to bring the full depth and breadth of UC Davis teaching and research and engagement and patient-care programs to this Aggie Square idea.”

The university and City are looking at public-private partnerships and input from business leaders on the composition of Aggie Square, which is being considered for a host of projects such as incubator and accelerator space, collaborative space for research, academic programs, housing, retail, art and music venues. The 25-acre proposed research park will be broken into phases, with phase one encompassing up to 500,000 square feet for technologies that could include cellular therapies, medical devices, digital health, smart cities and new mobility. In August 2018, city leaders announced that the UC Davis Rehabilitation Hospital would be Aggie Square’s first project. The university is partnering with Kentucky-based Kindred Healthcare on the 48,000-square-foot hospital, which is expected to bring an infusion of $60 million to the area, with high-wage jobs, research opportunities and student internships. Business and neighborhood representatives from Oak Park, Tahoe Park and Elmhurst (who make up Aggie Square’s Community Engagement Advisory Committee) will also provide input on the project. “There’s an explicit goal for the project — to the greatest degree possible — to contribute to the resiliency of the surrounding neighborhoods,” Segar says.

Approximately 200,000 square feet is anticipated for co-locating university programs, information technology companies and workforce development programs, and studies are also underway for a housing project (in the range of 200 units) and public spaces that connect the UC Davis Medical Center with the community along Stockton Boulevard. Total build-out is expected to take 10 years.

The Davis Path Forward

Despite some of the setbacks with approving technology space in Davis, Mayor Pro Tem and UC Davis lab manager Gloria Partida points to some positive movement, including how voters recently approved two housing developments: Nishi Gateway 2.0 and the West Davis Active Adult Community. Partida indicated that the city council is also working on identifying an inventory of space for future development as facilities for research or startups. “The ideas that are coming out of the university are really first class. I do think it’s unfortunate that we haven’t done a great job of retaining the transfer in our own community, but I also feel that we have to pull the community along, and the projects must be reflective of the community’s values and what they want.”

Diane Parro, director of business and community engagement for the City of Davis, agrees and is working with the city council to identify opportunities that suit Davis. “If a big giant leap isn’t the first thing that can be accommodated in Davis, we want to make sure we are taking advantage of every other right-sized opportunity,” she says. Parro points to some new growth in the technology sector, including the addition of the 7,500-square-foot Archer Daniels Midland enzyme lab in 2018 and the 36,000-square-foot Area 52 industrial startup space owned by clean-tech company Sierra Energy. She also notes developer Mark Friedman’s purchase of University Research Park in South Davis, whose plans include developing 165,000 square feet of housing and office space. The city is also in talks with a prominent global food and ag company that is involved with some co-research at UC Davis and is looking for office space.

“These operations aren’t huge but are the kinds of projects that represent a way that we can continue to be successful in a niche that works for us, even if it’s modest,” says Parro. “We have to work with what we have now, and I can say with full confidence that we have a city council in Davis that is going to be cautious and thoughtful and intentional, but their minds are open to what fiscal benefits that the city frankly needs to be exploring.”