Developers reassess economic feasibility of project plans
Since its introduction in September 2014, the plan to build the Mace Ranch Innovation Center (MRIC) has jumped countless hurdles, endured long hours of careful research and planning and gathered large monetary investments. As of April 13, developers placed an indefinite hold on the 212-acre project proposal to review its economic feasibility and discuss future plans.
Located at Davis’ eastern edge, the MRIC must undergo several research reports and eventually a public vote to annex the sites into the city limits before its completion.
Like many other innovation centers, the MRIC planned to introduce a mixed-use innovation district to Davis, expanding the downtown experience and providing employment and research opportunities for businesses, residents and current or future students.
MRIC Project Manager Daniel Ramos first presented the planning application form to the city council in 2014. Ramos is currently the vice president of Ramco Enterprises Inc., and in the past has dealt with other innovation centers and developments. Ramco Enterprises, along with other partners, also took part in the original Mace Ranch Park Project in Davis.
“In West Sacramento, we developed the South Port Industrial Park […] and are involved in the bridge district in West Sacramento,” Ramos said. “So we have a lot experience [with large development projects] and we’ve been in Davis developing commercial and business park space over the last 25 years.”
Unlike other innovation centers, which estimate an internal rate of return of about 12 percent to 20 percent in profits, the MRIC project does not seem to show the same return. Economic & Planning Systems, Inc. (EPS) released a report that questioned the economic feasibility of the project, claiming that the center would produce a mere 5 percent return for the developers.
According to the April 13 press release by the MRIC, “[The] Finance & Budget Commission meeting concludes that the project might not be feasible given that only 128 acres or 60 percent of the site are considered developable and that infrastructure costs are high. The estimated infrastructure costs of more than $50 million are four times the industry standard for similar projects, according to the project sponsors.”
Despite the high costs for developers, an earlier EPS study showed that the MRIC would generate approximately $2.2 million annually for the city, create more than 10,600 jobs in Davis and Yolo County and produce $3 billion in total economic output in the long term.
The developers aimed to have the MRIC proposal on the November ballot for residents to vote on, but it is now unclear if it will make it on the ballot this year. Ramos emphasized that the developers truly wanted to have a community dialogue about the project and have the MRIC done right to create a high-quality innovation center.
While many innovation centers can take up to 25 years to build roots in the area, MRIC developers want to ensure that all of their investments will be worthwhile and provide Davis with countless opportunities to better the city.
Mayor Pro Tem Robb Davis joined the innovation park sub-committee task force, which looks at proposals for innovation centers in Davis. The sub-committee works with the staff and developers of the Davis Innovation Center, the Nishi Project and the MRIC.
“It’s a very long build out and a site of that size projected a 20 to 25 year build out,” Davis said. “My attitude on the project was […] to make this the best project [it could be]. Over time, it could definitely provide employment opportunities in medium to long term realities.”
Written By: BIANCA ANTUNEZ – email@example.com