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Friday, September 26, 2008

What Should Happen with the Lewis-Cannery Property?

The Cannery Park property and how it should be developed is one of the biggest looming questions before the city in the next few years. Some have suggested it needs to remain zone light industrial in order to attract new cutting edge high tech business. Others have pointed out that this is not a viable use for the land and have favored either a residential development or a mixed-use that combines a business park with residential workforce housing.

The city commissioned a viability study that was discussed earlier this week at a joint BEDC-City Council Meeting.

According to the study:
"The Cannery Park site includes 66 acres of the remaining 138.9 acre vacant land supply currently designated for business and industrial park development in the City of Davis 2010 General Plan, or about half the total supply. It also represents the largest infill parcel considered by the 2013 General Plan Housing Element Update Steering Committee and Davis Planning Commission for housing possibilities."
In terms of feasibility the reported offered the following:
"Although the Cannery Park site is a viable and competitive location for business and park development, feasibility of development at the site will be driven in large part by the specific definition of entitlements for this property. This definition is policy driven and requires consideration of the types of uses, intensity of development, and development controls that the City of Davis will permit at the Cannery Park site."

"Currently, the Cannery Park site is partially entitled and it is unclear to what extent the site’s current “Planned Development #01-00 (Industrial)” zoning classification adopted in 2000 can accommodate the business park market opportunities identified in this report."

"Entitlements with highly restrictive, discretionary, and unclear regulatory controls will limit the site’s capture/absorption of business park market opportunities and will negatively impact project feasibility."
This is a key point that the report makes, because apparently the zoning for this site is unclear and incomplete and that may be contributing to some of the problems that they have had finding businesses to come in.

Thus the report suggests:
"Business park development at Cannery Park can be best facilitated by clear rules of development that accommodate business and tenant needs while providing economic incentives for the development to occur."
The study looks at five different scenarios of which we will look at three.
"Scenario 1 -Basic Business Park/No Residential. This scenario assumes that Cannery Park is developed as an 862,000 square foot basic business park that is similar in form, character, and tenanting to the overall Davis business park market. This scenario assumes that the site is entitled to compete for 100 percent of the demand for Davis business park space by permitting occupancy by all types of firms currently in office and flex space in Davis. It would have a 16 year projected buildout and assumes a 55,000 square foot annual absorption rate inclusive of ancillary support uses."

"Scenario 4 -High Tech Business Park/No Residential. This scenario assumes that Cannery Park is entirely developed as an 862,000 square foot high tech business park. This scenario assumes that the site is entitled to compete for about 40 percent of the market demand for Davis business park space by permitting occupancy by high tech uses while not allowing most other uses. This scenario is considered infeasible given its projected 39 year build out period and a 22,000 square foot annual absorption rate (inclusive of ancillary support uses)."

"Proposed Lewis Planned Communities Plan. This scenario summarizes the proposed Lewis plan for Cannery Park as provided by Lewis Planned Communities to ESG. This Plan assumes 225,000 square feet of business park space and 610 residential units. It is unknown to what extent the business park space includes (or does not include) ancillary support uses. This scenario assumes that the site is entitled to compete for 100 percent of market demand. Lewis estimates that this scenario would have 5 to 8 year buildout based on a 28,000 to 49,000 square feet annual absorption rate."
The report goes on to suggest the following impacts of those scenarios.
"Scenario 1 would generate the most jobs (2,586) and business activity with 862,000 square feet of building area and no residential. Annual business revenues are estimated at $301,700,000."

"In contrast, the proposed Lewis Planned Communities plan with 225,000 square feet of building area and 610 residential units would generate the least jobs and business activity of these scenarios. Its annual business revenues are estimated at $78,750,000."

"Scenario 4, the high tech business park with no residential, is excluded from this discussion because it is considered infeasible."

"Scenario 1 would generate fiscal surpluses because fiscal costs to service business park development are typically a fraction of fiscal revenues since employees generally utilize a smaller percentage of governmental services than residents."

"The fiscal impacts of Scenario 3, which would generate 1,034 jobs and business activity in combination with 500 residential units, and the proposed Lewis Planned Communities plan, which would generate 600 to 850 jobs and business activity in combination with 610 residential units, cannot be evaluated at this point because they both would include significant residential development."
Discussion and Commentary

The meeting on Monday generated no action, but there was a clear consensus from the BEDC Commission that the mixed-use model was the most appropriate model to move forward with. Indeed there is much to lend itself to Lewis' plan for the property. The goal is to provide workforce housing in the affordable range. This would be accomplished through a mix of smaller units, larger amounts of open space and shared space, and then about 20 percent of the property being used for a business park.

The breakdown of 80-20 is interesting because they suggest they would generate on the low end about 600 jobs in combination with about 610 residential units, roughly a one-to-one ratio. While there would likely not be overlap between the jobs and the residents, in theory it would make it feasible for less commute and therefore make the project more environmentally sustainable.

The other finding of interest here is that they found that the high tech business park with no residential to be infeasible. The study projects that it would require a roughly 40 year build out period that does not fit in with the goals of the community. Large users, in addition, according to staff want distance from residential and community uses.

The question now as the council decided to bring back the item before the council on a future Tuesday night is what the council will want to do and how quickly they want to go forward with this project.

The community still needs to assess whether they think a plan with 610 residential units and a corresponding number of jobs in the business park is the optimal use for the property.

The other key factor is the 800 pound gorilla in the room, the adjacent Covell Village. There are some on the council that believe that the two sites need to be planned concurrently. However, the people at Lewis do not necessarily concur with that assessment. They believe that there are separate issues on each site that make them very different planning challenges. Lewis is within the city limits, it is paved over and thus the issue of agricultural land and the issue of flood abatement are not there. There is no Measure J requirement for Lewis.

That said, obstacles remain. A plan that would include 600 new residences and 600 jobs will have a huge impact on traffic on Covell Blvd that must be dealt with. From their standpoint, the two sites can be dealt with separately, their plan calls for a community open space park to border the Lewis property on the East. Should a future development go there, the park could be expanded and adapted to accommodate increased needs, but it would not necessitate such a development. The goal seems to be to neither preclude nor require future development.

Nevertheless the future of Lewis seems very uncertain at this moment. The process has not moved forward very rapidly. The council called for a future discussion, but that future discussion may be in the distant rather than near future. In the meantime there has been no EIR planned and the project remains somewhat in flux.

We will see in the coming months what the future holds for the largest undeveloped parcel within the city limits.

---Doug Paul Davis reporting