Tuesday, April 22, 2014
YOLO COUNTY NEWS
99 CENTS

Davis, don’t beat yourself up over losing Bayer CropScience

By Jim Gray

Bayer CropScience’s recent decision to buy a building in West Sacramento, including plans to relocate about 140 employees from Davis to this facility, should be taken in context. This was a complicated decision that a large global corporation made after much deliberation.

Bayer and the Sacramento region have a reason to celebrate. Davis residents have no reason to find fault and should focus on landing (or growing) the next job creating opportunity!

Large employers like Bayer are the quality of firm that Davis should try to attract and keep. Proximity to world-class UC Davis; a highly educated work force; commitment to sustainability, greenbelts and bike paths; a vibrant downtown; and a great community in which to live, work and raise our kids are some of the attributes that Davis has in spades.

But let’s face facts: What Davis didn’t have (and West Sacramento did) was a large, vacant, bargain-basement facility that could be acquired at a fire-sale price. It wouldn’t be wise economic or public policy to have an oversupply of distressed empty buildings sitting vacant, hoping that a user would come along.

I offer my perspective on why Bayer chose the West Sacramento site and would like to offer some personal and professional insights as a commercial real estate broker serving the Davis market and Sacramento region.

Consider the opportunistic capital investment that Bayer was able to make on a relatively new, high-tech building with expansion space that was sitting vacant only 15 minutes from its current Davis operations. Bayer acquired a building for approximately $11 million, approximately $67 per square foot, in which the former occupant reportedly had invested more than $60 million, or $365 per square foot.

The building was vacant and available because a global company, Affymetrix, moved its operations to Singapore. In other words, Bayer got the existing building for 18 cents on the dollar. No way could a new building be built this cheaply!

Let’s not beat ourselves up and let’s not misdiagnose the reason that Bayer chose West Sacramento. Bayer’s decision does not reflect poorly on the community of Davis and its desirability to technology or agricultural firms. Before rushing to cause and effect such as “not enough big buildings,” “not enough zoned land,” the old and untrue stereotype that the city of Davis “planning and zoning requirements are too tough,” that there is a “lack of competiveness” or some other speculation, I would encourage Davis residents and civic leaders to acknowledge that Bayer made a screaming deal for pennies on the dollar.

I know first-hand that there were at least three very competitive teams with proven track records who tried to structure a transaction for Bayer in Davis or on campus. We also know that the leadership of the university, the Davis Chamber of Commerce and the city collaborated to assist the efforts that were being made.

Bayer CropScience is a huge global company. In 2009, my partner Nahz Anvary and I served as brokers for its vegetable seeds division Nunhems and relocated its scientists and business staff in a lease of approximately 8,500 square feet near UCD. We were fortunate to find them “vacant lab space” in an existing building that they then renovated to meet their needs.

From those very early meetings, it was apparent that Bayer CropScience wanted to keep its options open on how and where to grow near UCD. The scientists and employees of Nunhems and AgraQuest liked their facilities in Davis. Many of them were hoping that they could stay in Davis while at the same time realizing that they were bursting at the seams.

Consider that Bayer is a very large and diversified firm and in the first quarter of 2013, Bayer had revenue of 10,266 billion euros, or $13.613 billion. Bayer is a conglomerate with large business units in health care, crop science and material sciences. Bayer employs 111,600 people worldwide and the Bayer CropScience group employs 21,200 people.

Just last summer, we were negotiating with Bayer/Nunhems to grow and expand its operations in Davis. Proposals were worked on, budgets were developed, draft leases were prepared and then, surprisingly, all that work was put on hold just before the Fourth of July in 2012 because Bayer announced the acquisition of AgraQuest.

That AgraQuest acquisition precipitated new decisions and added further complexity to the process. Decisions related to work force as well as to integration, collaboration, expansion and growth were now added to the mix. Bayer’s plans and those driving its decision-making and review changed as well.

Local business unit leaders, real estate and facility professionals, management teams and executives from all over the world came in waves to Davis and the region to establish revised criteria and plans. As it turns out, there were both strategic as well as opportunistic considerations.

We should all be thankful that Bayer is investing and staying in the region. Furthermore, we should be thankful that we have strong and collaborative leadership within the city of Davis (including the mayor and members of the City Council, city management and community development staff), the Chamber of Commerce and at the university who are working hard to attract and retain high-quality firms.

There are clearly unintended consequences of the growth control measures that were designed to slow the community’s residential growth. We do need additional state-of-the-art buildings with competitive business infrastructure so we can compete effectively on the global stage. We need to continue to work collaboratively and competitively to attract and win our fair share of great jobs and world-class companies. Our planning policies can continually be enhanced so that we can react nimbly and positively to compete when good companies come along.

Those are matters for the community to work on and will make us even more competitive. But with regards to the Bayer decision, Bayer made a great buy and the region is a winner as a result.

We have to remember that Babe Ruth struck out 1,330 times but he also hit 714 home runs. Don’t worry about the occasional loss. Worry about the chances that you miss when you don’t even swing. Davis has much to be proud of and needs to continue evolving and pursuing great companies and jobs!

We can’t win them all. Let’s declare victory for the region and work together to get the next one in Davis.

— Jim Gray is a longtime Davis resident, a partner of Cassidy Turley Commercial Real Estate Services and a commercial real estate broker and developer for nearly 30 years.

Special to The Enterprise

LEAVE A COMMENT

Discussion | 1 comment

The Davis Enterprise does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

News

City could work to lower water bills

By Dave Ryan | From Page: A1

 
UCD dairy department awaits new facilities

By Jason McAlister | From Page: A1 | Gallery

 
UCD cheese: a lost legacy

By Jason McAlister | From Page: A1

 
Up in flames

By Lauren Keene | From Page: A2

 
High court upholds Michigan affirmative action ban

By The Associated Press | From Page: A2

Woman struck by train near Davis

By Lauren Keene | From Page: A2, 1 Comment

 
Author discusses memories of Appalachia at The Avid Reader

By Special to The Enterprise | From Page: A3

Pets of the week

By Enterprise staff | From Page: A3 | Gallery

 
Fund drive aims to help Chilean fire victims

By Enterprise staff | From Page: A3

Walk Saturday to benefit Patwin

By Enterprise staff | From Page: A3

 
Beronio lawn signs available, campaign events planned

By Enterprise staff | From Page: A3

Salon hosts cutathon to benefit Lake Tahoe

By Enterprise staff | From Page: A3

 
Rotary Barbecue tickets available now

By Enterprise staff | From Page: A3

‘Call of the Wolf’ is an Earth Day celebration

By Lynne Nittler | From Page: A4

 
 
Peterson is a Woman of the Year

By Enterprise staff | From Page: A6, 4 Comments

Q&A set with local Emmy-nominated screenwriter

By Adrian Glass-Moore | From Page: A6

 
Election programming available through Davis Media Access

By Enterprise staff | From Page: A7

 
.

Forum

Is it a bet?

By Special to The Enterprise | From Page: B5

 
Watching this marriage go

By Special to The Enterprise | From Page: B5

Prop. 8 was ‘pure bigotry’

By Letters to the Editor | From Page: A8, 7 Comments

 
Elect Beronio as Yolo judge

By Letters to the Editor | From Page: A8, 4 Comments

Right person at right time

By Letters to the Editor | From Page: A8, 1 Comment

 
Don’t let crisis nursery close

By Letters to the Editor | From Page: A8

 
Thanks for kindness of strangers

By Letters to the Editor | From Page: A8, 1 Comment

Vote no on Measure O

By Letters to the Editor | From Page: A8, 5 Comments

 
Cutting the heart out of America

By Letters to the Editor | From Page: A8, 1 Comment

Pat Oliphant cartoon

By Debbie Davis | From Page: A8

 
.

Sports

Devils looking forward after softball loss at Elk Grove

By Enterprise staff | From Page: B1

 
New formation propels DHS to easy win

By Evan Ream | From Page: B1 | Gallery

Davis runners presence felt at Boston Marathon

By Bruce Gallaudet | From Page: B1

 
Aggies win tournament title and Hansen takes first at El Macero

By Enterprise staff | From Page: B1 | Gallery

 
Baseball roundup: Cats fall in rain-shortened contest

By Staff and wire reports | From Page: B2

Little League roundup: Karagosian’s double wins it for Dodgers

By Enterprise staff | From Page: B8 | Gallery

 
.

Features

Even with no flowers, Anza-Borrego’s desert inspires

By San Francisco Chronicle | From Page: C1 | Gallery

 
Keep children safe when traveling

By Special to The Enterprise | From Page: C2

10 recreation lakes that can survive a drought

By San Francisco Chronicle | From Page: C3

 
Willett running club invites community to ‘run with the owls’

By Anne Ternus-Bellamy | From Page: A10 | Gallery

 
What’s happening for youths

By Enterprise staff | From Page: A10

.

Arts

Tony Fields tribute has new sound, same great style

By Krystal Lau | From Page: A11 | Gallery

 
Wine, Art and Music Festival returns to Winters

By Enterprise staff | From Page: A11

‘Sactown Tonight!’ on stage at B Street

By Enterprise staff | From Page: A11

 
DMTC to hold auditions for ‘Les Miserables’

By Enterprise staff | From Page: A11

Notorious Shank Brothers take over the Picnic

By Enterprise staff | From Page: A11 | Gallery

 
.

Business

.

Obituaries

.

Comics

Comics: Tuesday, April 22, 2014 (set 1)

By Creator | From Page: B5

 
Comics: Tuesday, April 22, 2014 (set 2)

By Creator | From Page: B7