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UCD and the City of Davis share a long history of mutual cooperation.
This mutually beneficial partnership is a statewide rarity among UC
campuses and their host cities. Unfortunately, some elements of the
current UCD non-academic development plans threaten to undermine that
relationship. We, expressing the majority sentiment of Davis City
Council, feel that it is not too late to reestablish Davis and UCD as a
model of town-gown cooperation.
The most immediate problem facing us is the university’s proposal to
build a hotel, conference center, restaurant and pub on university land
at the UCD I-80 interchange at Old Davis Road. Because this site is not
adjacent to the city, it could never be annexed by the city. Hence, the
city cannot collect tax revenue from this complex.
THE FINANCIAL PICTURE
The tax revenue from this hotel and restaurant complex would be
substantial. Were it built on land annexable to the City of Davis, as we
have requested, this complex could, once established, generate as much as
$650,000 a year for the city in hotel occupancy, sales and property taxes
at a build-out of 150 rooms. To put this figure in perspective, it
exceeds half the revenue generated by our existing parks tax.
Our small college town has built its economy around service to the
university. And, in fact, we really have few other realistic options for
economic development open to us. Due to the fact that the state is taking
back a much higher percentage of our local property tax than it did a
decade ago, the average research, industrial and business park is revenue
neutral, meaning that it costs as much for the city to service as brings
us in property taxes. Bringing additional appropriate retail to town will
help, but cannot, eliminate, our looming budget shortfall. The average
Davis household would have to spend about $2,500 more in Davis per year
to equal the revenue potential of this one hotel complex at
build-out.
Hotels bring a lot of money to the city. This is because cities only
retain 1% of the 7% sales tax they generate, while they retain the full
amount of the hotel occupancy tax. Davis currently collects 10% hotel
occupancy tax. In addition, we collect property taxes and any related
sales taxes. As a small university town, our natural economic niche
involves university services and the arts, entertainment and cultural
sectors. Further development of this sector is our most realistic hope
for ameloriating the city’s projected economic shortfall.
With these factors weighing heavily on our minds, we have asked the
university to move its planned hotel conference center back to an area
adjacent to and annexable by the City of Davis, while maintaining the
phasing of development requested by our local hotel owners.
We would now like to address a few myths that have been floated
concerning the feasibility of such a move.
Myth No. 1: The university has always planned to build its hotel conference
center at the I-80-UCD exit, outside the Davis city limits.
Fact: The only commercial development mentioned in the UCD 1989
Long-Range Development Plan is the Davis Commons shopping center at
Richards and First Street, which was to be annexed by the City of Davis.
The county didn’t object to the annexation. No hotel was mentioned. The
shopping center was annexed by the city.
Then, in 1995, the university did not object to the plan to build
hotel-conference center on the Nishi property, which was to be annexed to
the city. The county did not object either.
The first serious proposal for a hotel conference center outside the
Davis City limits came to the city council earlier this year, and the
city promptly expressed its concern with the economic impacts.
Myth No. 2: There is no realistic site for the hotel-conference center which
is adjacent to the city.
Fact: There ARE realistic alternative sites. A hotel is a relatively low
impact use. (One of us lives next-door to two of them). They are quiet
uses, and they do not produce significant peak-hour traffic. We feel that
one excellent site would be the huge area of land around Toomey field at
5th and A street, adjacent to our
downtown. Toomey field could be moved to the rec center area, is
currently planned by UCD, or to either edge of the large site. A hotel
complex on this site would add immeasurably to the vitality of our
downtown, and would be much more in keeping with good modern planning
principles.
Alternatively, the hotel conference center could be located on the Nishi
property, where it was planned to be built in the mid-nineties.
Myth No. 3: The county would never let us annex the hotel-conference center,
even if it were built adjacent to the City.
Fact: Yolo county has a strong policy, articulated in its General Plan,
that urban uses belong within city limits. We believe that if the two
county supervisors from Davis wanted the hotel to be annexed, sooner or
later it would be annexed, if not by the current board of supervisors,
then by a future board.
When the two county supervisors from Davis wanted the Davis commons
shopping center to be annexed to Davis, it was annexed to Davis. When the
hotel conference center was originally planned for the Nishi property in
1995 and the two Davis supervisors wanted it to be annexed to Davis, it
was understood that the county would allow it to be annexed. We trust
that our Davis supervisors have sufficient political skills to enable
them to engage the support of at least one other supervisor through the
political process of reciprocal cooperation.
Myth No. 4: A hotel-conference center located at the UCD freeway exit on
university land will ultimately benefit Davis.
Fact: After examining three separate
consultants’ reports, we believe that the proposed hotel complex will
harm our existing revenue potential. We fear it will result in the
closure of one or more of our existing hotels.
But even if we are wrong, the proposed location of the project
will block our ability to significantly expand our hotel sector at the
very time that we should be relying on the expansion of this sector to
ameliorate our projected budget shortfall and to compensate for the
impacts that the university expansion will have upon city, including the
large net revenue drain of new student housing.
Myth No. 5: The University has made major concessions to the
city.
Fact: The university has made only small concessions to the city. They
have offered to contribute 3% of the hotel occupancy tax to an ear-marked
fund. They have also planned to lower the number of rooms temporarily
from 150 to 75, althoughVice Chancellor Meyer told the County Board of
Supervisors that this was because the market is currently too soft to
procure a loan for the full 150 rooms.
SUMMARY
We recognize that the university will grow. Speaking for the City Council
majority, we are seeking to help meet the specific needs of this growth
in a manner that is mutually beneficial. This includes integrating UCD
revenue-producing development into the City of Davis, as has been
customary in the past.
It is important to remember that one of UCD’s major faculty recruitment
and retention assets is the quality of life in the City of Davis. If the
university undermines that quality of life by refusing to help us offset
the impacts of its growth with the revenue from that growth, both the
university and the city will ultimately suffer.
As the statewide UC system grows, all of the UC host cities will be
facing major impacts. The host cities will respond in a variety of ways.
We fervently hope that Davis and UCD can serve as a model of cooperation
and of mutually beneficial integrated planning.
Sue Greenwald
Davis City Council
Ken Wagstaff
Davis City Mayor
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