ConAgra Foods Inc., the corporation proposing The Cannery project, has promised to pay a local private nonprofit business $2 million if its residential development is approved by the City Council next month, The Enterprise has learned.
George Phillips, ConAgra representative, confirmed Tuesday that the company has pledged $2 million to Capitol Corridor Ventures, the nonprofit organization that pushed to swap land with the city earlier this year in order to develop 391 acres of farmland east of Davis, called Leland Ranch, into a business park.
But the money, Phillips said, would materialize only if the funding was specifically dedicated to supporting local tech-business startup companies in Davis and, of course, only if the City Council ultimately approves The Cannery.
The application for The Cannery project, a 547-unit residential development proposed for 100 acres of vacant industrial land in North Davis, will be considered by the City Council over two meetings on Nov. 12 and Nov. 19.
David Morris, a former UC Davis School of Medicine faculty member and the founder of Capitol Corridor Ventures, says helping tech-business startups is exactly what the money is for.
In 2010, after spinning out a successful biomedical tech company from UCD, among other endeavors, Morris began shopping around his vision to kick-start the Davis economy to local city and business leaders. That plan was predicated on providing seed-stage venture capital dollars to dozens of tech-startup companies.
With $20 million, Morris calculated he could fund the entire effort, which he believes would help position Davis to become the agricultural-tech giant in the industry that it should be, given its proximity to the university.
Eventually in 2010, Morris secured a commitment from ConAgra to help fund that plan.
“(The) $2 million is for the sole purpose of seeding this nonprofit venture capital fund,” Morris said Tuesday. “It’s a charitable contribution for the sole purpose of supporting the CCV effort.
“If these guys want to give a charitable contribution to venture funds, then great,” Morris added. “It’s a win-win for everybody.”
Morris explained that unlike traditional venture capital efforts, which are beholden to limited partners and investors who expect a profitable return on investment, all revenue generated by a nonprofit entity is filtered back into the organization to seed further startup companies.
Phillips says ConAgra’s motivation for the deal stemmed from the fact that, if approved, the residential development will replace 100 acres of industrial land, which once housed the Hunt-Wesson tomato canning plant until ConAgra decided to close it in 1999.
ConAgra saw a financial contribution to the local economy through Morris’ plan as a way to help backfill the loss of the industrial acreage.
But Davis Mayor Joe Krovoza has concerns about this agreement.
With the City Council fighting over the past few years to ensure that the project as a whole benefits Davis in the long run, Krovoza worries that this deal, which was not reviewed or approved by the city, could undermine those efforts.
“News of this support for Mr. Morris’ project likely will increase the difficulty of the council getting to its final approval of The Cannery development,” Krovoza said in a statement. “The city had made significant concessions to ConAgra in order to facilitate The Cannery project — most notably a weakening of our affordable housing requirements.
“Conversely, our council has identified traffic mitigation measures and community needs related to the project that we believe ConAgra should support prior to approval. I can only hope that ConAgra designating $2 million for a project not prioritized by the council does not complicate the city’s ability to come to terms with the developer,” he continued.
“If ConAgra wishes to support the development of new businesses for Davis, then there are a series of existing city and university programs being advanced by our Chief Innovation Officer Rob White — the most notable being our Davis Roots project with UC Davis.”
— Reach Tom Sakash at firstname.lastname@example.org or 530-747-8057. Follow him on Twitter at @TomSakash