Public Records Requests
Part of the research effort in this study was obtaining documents that were not disclosed to the public during the planning process. I analyzed these document to see if there was any information that might have influenced the distribution of shareable economic benefits between the project proponent and the community. Below are brief summaries of these documents (marked with an *) and what, if any, information was included in my paper, and any general comments about how the information was disseminated. Some of the comments address how the document was used to promote the project – which was not a focus of my paper. I’ve also included links to documents that are in the public domain (without the *) which relate to the documents secured with a public records request. Some of the documents include my highlighting.
Social Equity-based Planning Context and Recommendations
UCD’s Center for Regional Change prepared an excellent report which supports a social equity centered planning approach for Aggie Square. I found no evidence this recommendation was followed.
UCD’s Site Selection Report
In December 2017 City of Sacramento Mayor Darrell Steinberg and UCD Chancellor Gary May announced a partnership to pursue an innovation center. The pair also announced the formation of a site selection committee to evaluate potential sites. The published report reviewed several sites and included a number of caveats. The report indicated it was a “study scan” and was “not intended to be comprehensive.” No recommendations on a preferred site were offered by the committee. The medical campus in Oak Park was one of the sites scanned by the committee. Despite the tentative and broad nature of the findings in report, subsequent representations of the report indicated it was the basis for selecting the Oak Park location for the new project. Chancellor May indicated to the UC Board of Regents that the Oak Park site was chosen after a “rigorous site selection process.” While it seems exceedingly practical to use property you already own for this type of project, there is no evidence to suggest any other sites were under serious consideration. I suspect the Chancellor was trying to demonstrate thoroughness in the planning process for his governing board, and imply some measure of competitiveness to the City of Sacramento – perhaps setting the stage for a public subsidy request.
*Site Selection Report published in April 2018
Minutes from May 2019 UC Regents meeting (rigorous site selection)
UCD’s Market Studies
There were two market studies commissioned by UCD. The first was completed in March 2018 and suggested the multiple elements of the project were all feasible. The second study was completed in May 2019 and it determined the project was not feasible. The consultant recommended several strategies to reduce project costs, One of the cost reduction strategies was to request property tax exemptions for portions of buildings occupied by UCD. In a presentation to the UC Board of Regents in May 2019 Chancellor May and staff seemingly referred only to the first study, telling their governing board that the market study was positive and potential private parties were excited about project.
*Market Study March 2018 (project feasible)
*Market Study Update May 2019 (project not feasible)
Meeting Minutes from May 2019 presentation to Board of Regents (project feasible)
Economic Impact Assessment for Aggie Square
The Economic Assessment issued by UC Davis is not consistent with guidelines published by the Association of Public and Land-grant Universities (APLU). The inconsitancies are discussed in the paper. The guidelines were published in 2014 to curb “the misuse of traditional economic impact analyses” which “created a situation where any use of such models is suspect,” and help institutions regain credibility in the economic world through “careful attention to accuracy in any message that is disseminated.” The guidelines are part of a larger series of documents published by the association which comprises a comprehensive Economic Engagement Framework. The Economic Engagement Framework is effectively a marketing template to promote the value and relevance of universities o local governments, business partners and area residents. A public records request is pending for the backup data for the Aggie Square project.
Economic Impact Assessment for Aggie Square (attached to City Council Report)
Alice Waters Institute for Edible Education
This component of the project was a late entry into the building program. The genesis of this component seems to be UCD’s multi-billion dollar Big Ideas fundraising initiative which was underway when Chancellor May started in his role. After May arrived at UCD he expanded the list of projects covered by the Big Ideas campaign to include Aggie Square. The capital funding to construct a building to house the institute and an endowment to operate the institute could be as high as $160 million. The institute would build on the work of the Edible Schoolyard project – a nonprofit organized by Alice Waters. The advisory board to the Edible Schoolyard Project appears to be capable of raising a significant level of funding. The board includes A-list celebrities like Meryl Streep and Robert Redford and celebrity chefs like Jose Andres and Jamie Oliver. The institute entered the project initially with a facility cost of $4.8 million. The facility cost carried in the latest documents is $14.8 million and it is one of several items the City has permitted to be funded with tax increment subsidies. Based on the documents it appears that David Chai has a significant role in the project promotion. Chai was the Executive Director of the Edible Schoolyard nonprofit recently, and now is identified as a strategic advisor to the UCD School of Education to advance the institute.
Most recent available IRS filing (Form 990 for 2018-19) w/David Chai Executive Director.
*Letter of Interest Between UCD and Alice Waters
*Memorandum of Understanding between UCD and Alice Waters (executed by David Chai for Alice Waters)
David Chai profile on UCD School of Education webpage (strategic advisor for Alice Waters Institute)
The predevelopment agreement outlines how UCD and Wexford will proceed with the earliest phases of the project, prior to a final construction program. The agreement outlines general terms of the ground lease between Wexford (Lessee) and UCD (Lessor), the expected investment returns for Wexford, and the options to reduce the building program for Phase I of the project. The option to reduce the building program was not communicated in public documents following execution of this agreement. It makes sense to have an option to reduce the original building program since it was conceived prior to the pandemic and there likely will be a dramatic increase in vacancies (supply/competition) for office space. Shortly following execution of this agreement Wexford asked the City for a financial subsidy. There is no indication in the predevelopment agreements that UCD, for its part, lowered ground lease payments to make the project feasible.
*Predevelopment Agreement between UCD and Private Development Partner (Wexford) executed September 24, 2020
City Assessment of Public Subsidy
On June 13, 2021 I requested the feasibility study completed by the City to determine that UCD should receive 80% of the property tax increment from the Aggie Square and Kindred Rehabilitation Hospital projects. The study was cited in Report Item #8 from the City Council agenda of October 27, 2020 (File ID: 2020-01185). This Council report on Aggie Square includes a reference on page 5 to staff “reviewing the project’s need for public financial participation and terms of that financing to assist in making the project economically feasible.” I’m looking to see how the City treated the ground lease revenue being received by UCD, since that should have been reduced prior to the City granting a subsidy, and clues for why the Alice Waters Institute was included in the list of eligible projects for subsidy – since that project stands alone and is not market driven. I’m also interested in who is bearing the cost of the advanced construction of structured parking for Phase II of the project. This would appear to be an appropriate use of the ground lease revenue collected by UCD.
Update: I received the City’s assessment of the public subsidy on October 26. The subsidy request by the developer was reviewed at a working meeting on July 22, 2020. An analysis of the subsidy request was completed September 30, 2020 by the developer’s consultant (under contract to the City). The assessment was limited by a lack of transparency by the developer and the “”schedule and scope of analysis.”
The assessment does not address the ground lease revenue received by UCD nor does it explain why the Alice Waters Institute is appropriate for a public subsidy. There is no mention of the financial impact on the project for building excess parking (needed for Phase II). The developer’s consultant concludes the analysis with the following statement: “Additional feasibility analysis, further evaluations of potential revenues and costs of alternative project development scenarios and discussions with the applicant regarding proposed publicly-funded improvements would further inform appropriate levels of public funding.” Based on subsequent documents it does not appear these steps were taken nor does it appear, based on comments on construction costs, the consultant had access to the second market report prepared for UCD (above).
Finally, I note in the last paragraph of the master agreement between the City and Wexford, there is a reference to Wexford getting a similar incentive package to secure tenants as was offered to the Centene Corporation. This has the potential to increase the public subsidy by $9,000 per employee, for up to 1,500 employees, occupying the private office space at Aggie Square. The cap for Centene on this subsidy is $13.5 million.
*City working group agenda from July 2020 identifying subsidy request and ways to finance the request
*Developer’s consultant’s analysis of subsidy request prepared (September 2020)
City Council Report of October 27, 2020 indicating City will review subsidy request.
City Council Report identifying projects eligible for public subsidy (April 2021: page 20)
City Council Report of September 21, 2021 Approving Subsidy to UCD
City Council Report detailing economic incentives for the Centene Corporation (template for part of UCD Subsidy)
Community Benefit Partnership Agreement
Final CBPA April 2021