This Studio Sacramento episode is supported by UC Davis Health, where doctors, nurses and researchers share a passion for advancing health.

Learn more about their latest medical innovations at health.ucdavis.edu.

♪♪ UC Davis's Aggie Square Project has been called Sacramento's biggest economic development project in a generation and aspires to transform the university and the capital region.

Chancellor Gary May joins us to talk about the project.

Chancellor, what led you and your team to make this initiative such a huge part of the university's investment plans for Sacramento?

Well, Scott, a number of things led to that.

First, we just thought Sacramento and the region was ripe for this kind of opportunity, and did dovetail quite nicely with the strategic plan of the university, uh, in the areas of entrepreneurship and innovation and strategic partnerships and raising the visibility of the organization.

And I think, lastly, any public university has a tripartite mission of education, research and public service, and Aggie Square really checks all three of those boxes.

In particular, the public service mission.

Uh, economic development is... is part and parcel of the- that part of the mission.

And Aggie Square will... will have a significant economic development impact on the city and the region.

And what exactly is the university's investment in the project, from a projected dollar size over, say, the next ten years?

Well, phase one of Aggie Square is about a $1.1 billion construction project.

Uh, now, that is not the... the precise answer to your question about the university's investment, but that's, uh, the... the amount of money that we are, uh, uh, participating in with our, uh, development partner, Wexford Science and Technology.

Uh, the model for these, uh, type of developments is, uh, you know, the university owns the land where Aggie Square is located.

And so, there's a ground lease, uh, that is, uh, paid by the developer to the university, to the UC.

And then, when the construction is complete, the university is one of several lessees that will rent space in the, uh, buildings that are constructed, um, with the university being able to rent at a premium rate- at a... at a... at a- I'm sorry, at a... a lower rate than the premium, which will be paid by our... our, uh, partners, uh, our industry partners, which will co-locate with us in the development.

When you're talking to potential partners, stakeholders, and... and just the public in general, how do you describe Aggie Square?

Well, Aggie square is going to be, uh, sort of a "live, learn, work, play" environment where our students, our researchers, um, uh, our industry partners, our community members will all be able to work side-by-side in a variety of ways.

Uh, certainly, learning is a big aspect of what we'll... we'll always be doing, doing, uh, cutting edge research in the life sciences, engineering and technology, uh, developing new companies, uh, in those areas.

So, there's, uh, uh, there's uh, space for, um, uh, uh, startups and there's an... an accelerator and an incubator space.

Um, we will have, uh, opportunities for, uh, training, uh, workforce development for the surrounding community.

Uh, and, um, naturally, what will develop and what will evolve in the space are... are, uh, small businesses, uh, uh, uh, and other, uh, enterprises that will just sort... sort of support what's happening in and around Aggie Square.

You know, anything from restaurants, uh, uh, to... to, uh, hotels and cleaners and things like that, that will naturally evolve as... as Aggie Square makes progress.

For decades, people have talked about a project of this magnitude coming to the campus in Sacramento, and there have been fits and starts, but nothing ever really got off the ground.

What made this the right moment?

You know, I think it was a unique combination of things.

One was, you know, I had some prior experience, uh, at my previous university, uh, developing a... a project called Technology Square in Atlanta.

So, I sort of knew how this was... this was done, uh, and how to get the right sort of engagement between the... the... the city, the government, uh, and industry, and the university- all three pieces are... are really important to... to be successful- uh, how to, uh, sort of pitch the project to the community, um- and, um, you know, just kind of had some- I think we had some credibility because I had that experience.

And I think the timing was right.

I think, you know, uh, Mayor Steinberg has been an incredible partner, and this is, uh... completely in line- aligns well with his... his own vision for what he wanted to do in the area of economic development in Sacramento.

So, he and I developed a rapport very quickly.

And, uh, that rapport remains very strong.

And we see the same things and want the same things for the project.

And then, when we add Wexford to the team, uh, that- the combination just got stronger because we all have sort of the same vision for we want- what we want to see Aggie Square be.

When... when you're doing a project like this and you're at the conception stage, you have to win hearts and minds.

What do you think was the most compelling argument that you and your colleagues had to make in order to get people to believe enough, to bring together this partnership that you've just described?

Well, I think it helped that this was something new that... that had not been done before.

I...

I think it also helped that... that there was a recognition that the city of Sacramento was overly dependent on the government sector for its... its... its, uh, economic prowess and... and... and clout, and that we needed something different, something in the tradable sector- uh, sectors, uh, that would, uh, enhance that and complement that.

Uh, the university was at a place where, you know, uh- You know, one of the things I sold to university when I came as chancellor was, you know, we're... we're kind of a sleeping giant, or had been a sleeping giant, where we had all these wonderful technologies and... and all this science that was being developed, but, um, not many people knew about it.

So, uh, I really stressed to the university community how we needed to enhance our visibility to... to establish some strategic partnerships, not with just, uh, the government, but also with, uh, the- uh, our industry, uh, partners, and... and just really raise the profile of UC Davis to where I believe its... its rightful place should be.

And finally, uh, to provide some of that service I mentioned before to not only the local residents that surround Aggie Square, but to... to the... the city, the state, the region, uh, et cetera.

So, all those things sort of came together and... and people really bought into what we were trying to accomplish.

And it's- I'm very excited about where we're going.

You know, one of the things you mentioned is in talking about your industry partners.

There was a... a... a conventional wisdom, uh, that's operated for years that said that industry would never locate within the city of Sacramento... at all.

They want to... they want to be in more of the outlying areas and that sort of thing.

And this is a big bet that that conventional wisdom is wrong.

What gives you confidence that industry is going to be willing to co-locate with, uh, uh, UC Davis at Aggie Square?

Well, I think one of the big selling points that makes, uh, this project attractive to industry is the presence of UC Davis.

Workforce is... is key, and especially in... in, uh, in high tech.

You got to have the... the brainpower, the technical skills, the workforce that will make your company successful.

Uh, it has to be easily accessible, in close proximity.

And having UC Davis now view itself as not just, uh, on the other side of the causeway in Davis, but also having a connection to Sacramento was key, there.

And I also think that another thing that attracts industry is, uh, being, uh, in close proximity to the capital of the fifth largest economy in the world here in... in Sacramento and, um, uh, having those- you know, uh, uh, the possibility of influencing policy or, at least, uh, knowing what's coming down the pike, policy-wise, uh, and all those sorts of things are... are also, I think, attractive factors for industry.

Mmhmm.

And when it comes down to it, you described a lot about the benefits to the region itself.

How is this project, and all that you all believe it will bring, going to advance the mission of UC Davis?

Well, it's going to do a number of things for UC Davis.

One, uh, it's going to provide a... a mechanism for our students to, uh, get training and get employment and to express their ideas, um, from an entrepreneurial standpoint.

Two, it's going to be- We're building the first new, uh, wet lab research facilities in... in... in more than 20 years, uh, in that part of, uh, uh, our university.

Uh, and three, uh, as I mentioned, it just enhances our visibility.

It really puts us on the map, in terms of a key player for, developing intellectual property and commercializing intellectual property, uh, initially now in the life sciences area, but growing into, uh, food and ag tech and things that we're sort of known for, uh, uh, locally, but maybe not as well, nationally or inter... or internationally.

Hmm.

For... for those of us who are just being introduced to this project, were there other models of universities making similar types of investments that if we... if we look to, or if you look to in the planning process where we can kind of see the direction- it may not be exactly the same- but the direction that Aggie Square's going to take us?

Sure.

I...

I...

I mentioned Technology Square in Atlanta with Georgia Tech, which is where I came from.

But there are other models, uh, around the country.

There's Baker's Square in Pittsburgh with Carnegie Mellon.

There's Research Triangle Park in North Carolina with, uh- North Carolina State in... in the University of North Carolina.

Uh, there's Kendall Square in... in... in Cambridge, in Boston with MIT and a host of other universities.

So... so, this is kind of a proven, uh, sort of model.

Uh, our... our development partner, Wexford, has experience with Washington University, and St. Louis, and several other places, uh, where they have, uh, seen success with this kind of model.

It just hadn't been done, uh, here in California, certainly not in... in Northern California.

So, um, I have a lot of confidence that this model is effective and will... will be successful.

Hmm.

When- One of the concerns that historically has accompanied these types of investments, particularly in Sacramento, is its effect on the surrounding area and the residents within the area.

There hasn't been historically- just to be blunt about it- a lot of trust between UC Davis and the residents of Oak Park.

In fact, there was litigation on this project, which maybe you can talk a little bit about, but, um- What's the reality in terms of how UC Davis and the community are going to move forward?

Yeah, I think that's a fair question.

I...

I became, uh, aware of the historical trust issues between the university, uh, and the surrounding community, uh, as the project developed.

And I became really, uh, committed to... to reversing that, uh, situation and... and building trust.

So, um, with the- you know, some of the, uh, concerns expressed around, uh, displacement and... and... and other issues, what we decided to do, uh, was to develop what we call a Community Benefits Partnership Agreement, uh, with the local, uh, neighborhoods.

And there are many aspects to that agreement that address those concerns that I think the most significant is the establishment of a $50 million affordable housing trust fund, uh, that will be funded, uh, in a number of ways- One, uh, through, uh, some internal resources at the city.

Two, through the... the... the tax revenue that the project will generate.

And three, through some, uh, private fundraising that we are helping with directly to provide some immediate, uh, assistance and relief for local residents with, uh, uh, you know, uh, displacement concerns.

Uh, we also have committed to hiring 20% of Aggie Square, uh, uh, employment, uh, uh, from the three zip codes that surround the project, uh, and I think that number rises to... to 25% at some point.

Um, now that's a lot of, uh, jobs.

The, uh, project is expected to have 5,000 construction jobs immediately and 25,000 ongoing jobs, uh, as we reach steady state, uh, with Aggie Square business.

Um, and then finally, we've done some neighborhood improvements to, you know, pedestrian walkways and... and things like that that I think will be, uh, appreciated and beneficial as well.

But I think the big pieces of that agreement are the... the... the housing- the affordable housing fund and... and the commitment to hiring locally.

And the status of that litigation that was involved with the project, where is that today?

Uh, both ca- There were- There was a case, uh, by the, uh, the local community residents and there was another case from labor.

Both of those cases have been, uh, resolved, uh, amicably.

Uh, we re... we reached a... a resolution, uh, that we- all sides are... are... are happy with, uh, to the best of my knowledge, uh, and there are no- there's no pending litigation at... at present.

Hmm.

Have... have, uh, you or some of the aspects of the university, like the Graduate School of Management and others, done any studies about what might be the long-term economic impact of Aggie Square, within not just its... its specific area, but within the... the metropolitan area of our region itself?

Yeah.

One of the things we... we did early on, Scott, was to, uh, commission a... a... a study, uh, an economic development study, uh, and- to get to the, uh, the... the bottom line.

Uh, that study indicates that Aggie Square will be generating $5 billion annually of economic development for the city of Sacramento and the region.

Uh, a lot of factors go into that, but, um, that's a... that's a significant, uh, number for, you know, any city or region.

So, uh, it's a very exciting, uh, uh, uh, prospect for us to be contributing to that.

Now, this is the topic that is front and center when people are talking about UC Davis right now, but... but it's a big university and a big nation state, in its own right, that you lead.

What other things are going on that maybe the rest of us haven't heard about yet that are pretty exciting to you?

Several things.

One, uh, we are in the midst of a fundraising campaign, uh, capital campaign, which we have titled "Expect Greater."

Uh, the goal of that campaign is to raise $2 billion for the university by 2024.

Uh, we're making really good progress.

We're about 82% of the way toward that goal, uh, with a little less than two years remaining.

Um, we will have a record fundraising year this year, uh, uh, uh, fiscal '22.

Uh, so, that's... that's a very positive- Tell us the good news.

What does that look like?

Uh, that number is potentially a $300 million, uh, uh, year for... for UC Davis.

Previous record was last year, was 269 million, I think, is the number.

- Wow!

- And we've had record years each of the last- four... four of the last five years, I think, is the... is the right, uh, metric.

So, uh, we're in- moving in the right direction in terms of private fundraising.

Um, another thing I'm very proud of is our research productivity.

Um, this fiscal year, we will also cross the $1 billion mark in new research awards, uh, for the first time in the history of UC Davis.

And that makes us one of only about a couple dozen universities in the country who can make that claim.

So, uh, a lot of positive things looking very, very, uh, uh, strong and robust at the university.

Those are... those are amazing achievements, especially in the face of all of us being in lockdown for the past couple of years.

Uh, how did you all manage to... to pull off that sort of upward progression at the same time that, frankly, all of us and you all, as well, were suffering from the dislocation related to COVID?

Well, I think UC Davis had one of the, uh, best COVID responses of any, uh, uh, institution of higher education in the country, uh, through our Healthy Davis Together program.

You know, we had a really robust surv... surveillance testing, uh, activity.

Uh, we had a vaccine mandate.

Uh, we've had, uh, uh, our students collaborating and... and cooperating, uh, with, uh, the protocols that were put in place.

Uh, we've had consistently lower COVID test positivity than the rest of the... the state, the region, uh, and the nation, uh, over the same periods of time.

Um, so, I think that enabled us, in some ways, to maintain our research productivity and... and other, uh, types of productivity in the face of the really challenging pandemic, uh, uh, circumstances.

You know, one of... one of the things that's been discussed before, um, rel... related to the research capability of the university is a number of patents or... or innovations that have come out of the university.

And I'm not just talking about the school of medicine.

I'm talking about the, you know, the School of Agriculture, engineering, all the others.

- Mmhmm.

- Uh, you know, from your standpoint as a leader, and... and factoring in Aggie Square to all of this, how is it that we, as a region, do a better job of capturing that innovation, not just in its... in its discovery, but in harvesting that, so that way it does create the industry and the jobs, uh, uh, and that sort of thing that really could benefit the region?

How... how do we do that better, from your vantage point?

Well, I...

I think that's, uh, uh, an integral aspect of the mission of Aggie Square.

I mean, we've... we've produced really, uh, in- valuable intellectual property every year in the forms of invention disclosures and patents and, uh, startups and other things.

Uh, the key is how do we keep those... keep those companies and keep that intellectual property local?

Uh, so, we must give- uh, uh, provide an outlet for people to... to, um, get their startup going and... and cross what we call the Valley of Death, where you go from idea to... to- from- to, uh, proof of concept to, uh, uh, scalable, uh, uh, uh, manufacturing, if... if that's the industry, uh, scalable industry.

So, uh, one of the missions of having an Aggie Square is to help facilitate some of that, uh, uh, interactions- some of those interactions that make that possible, uh, and make staying in Sacramento an attractive, uh, proposition for people with good ideas, uh, uh, for commercialization.

Mmhmm.

You know, when... when we go back and we think about, um, the... the creation of this initiative, and it... it's located, uh, at the campus for the medical center.

- Mmhmm.

- Years ago, there was a notion that Sacramento has a... a underleveraged resource, which is that we have billions of dollars of investment in health care between not just your system, but the other neighboring systems that are all- By and large, you have three large systems, all within, virtually, a mile of each other.

Is there any opportunity, or has there been any thought given to how it is that, while you all are competitors at one level, how it is that there might be a greater collaboration in order to really leverage not only all of the billions in physical plant and expertise that all of you collectively have right now, but then with you all- with UC Davis bringing all that it's bringing to the table right now, to even take that to a higher level?

You know, we... we love nothing more than to be a good collaborative partner, uh, for what I would call our... our "competi-mates."

I mean, we... we do compete with some of the other, uh, systems.

But, uh, there are areas where, uh, it makes sense for us to think about being cooperative.

Workforce development, for example.

We all need a strong, uh, uh, workforce to draw from, uh, and other infrastructure that, uh, will, uh, keep our... our, you know, friends and neighbors here, uh, uh, healthy and happy and having a high quality of life.

Those are the types of things that we should think about more, uh, collaboration on.

I don't have anything specific in mind that I can point to... - Sure.

- ...but we certainly are open, uh, to having some of those discussions with... with some of those competitors.

So, as we look forward towards the future, what milestones should we and the public be looking for in terms of how we're going to see advancement on the forward progress of Aggie Square?

You know, we should be counting a number of things.

We should be counting, uh, jobs created.

That's an easy metric, right?

- Mmhmm.

- Uh, we should be counting companies both created, uh, as well as companies that choose to bring their, uh, operations to the Sacramento area to... to collaborate, uh, with... with, uh, others.

Uh, we should be looking at, um, uh, the... the... the training of the workforce that we're trying to create, uh, both from our university as well as from our... our neighborhood partners, making sure that uh, uh, an Oak Park- a... a... a youth person in Oak... in Oak Park can envision a... a career, potentially, uh, as a, uh, a scientist, an engineer, a technician, uh, uh, at Aggie Square.

Uh, we should be counting all those things and I think those will all be indications of success.

Incidentally, on that point- Um, in your community plan, are there any linkages between, uh, the university and the State University, the community colleges, even the local, uh, Sacramento Unified School District, all of which, you know, are... are co-located, so to speak, within the... the general area with you, in order to make sure that that pipeline happens?

Absolutely, Scott.

We envision a... a robust, uh, collaboration with our higher-ed partners as well as the community colleges and... and K-through-12, uh, institutions.

We just hired a community engagement, uh, director to help us facilitate some of those, uh, connections.

But, you know, we've already had a workfor- uh, uh, youth training and workforce development activities, um, uh, uh, initiated already.

Um, uh, Wexford has, uh, provided, uh, I think the number is $150,000 a year for community engagement activities of that sort.

That includes things like job fairs as well as, uh, some youth training activities.

We'll... we'll supplement that and... and look for other, uh, uh, resources to... to... to augment that.

Um, but we feel it's an important part of our mission to connect with, uh, you know, with- uh, uh, with Sac State, with the other- uh, with the community colleges, with... with, uh, the... the, um, uh, schools that are in close proximity to not only, um, have Aggie Square viewed as a... as a potential destination for those students, but just to, uh, provide assistance and support, uh, in their own activities at the- at those institutions.

Um, so, uh, that's- we think that's an important, uh, responsibility, uh, uh, and part of our mission.

Mmhmm.

And... and finally, what- Ten years from now- In fact, let's... let's go out a little bit further.

20 years from now, how will this region be different because of the existence of Aggie Square?

If- What I dream of is a... a... a Sacramento that is, uh, no longer viewed as a government town.

A Sacramento that's viewed as a... a real bastion for, uh, uh, in- for, uh, uh, technology, industry, uh, uh, uh, engineering, science, uh, commercialization development, uh, and an improved quality of life for the residents of the region that... that is noticeable and fair and equitable, uh, across demographics.

And... and I'd...

I'd hope that people will view Aggie Square as sort of a watershed, uh, and... and transformational event for the city, that... that really, uh, helps the city of Sacramento make it to the next level.

Alright.

And I think we'll leave it right there.

- Great.

- So, that's our show.

Thanks to our guest and thanks to you for watching Studio Sacramento.

I'm Scott Syphax.

See you next time right here on KVIE.

♪♪ All episodes of Studio Sacramento, along with other KVIE programs, are available to watch online at KVIE.org/video.

This Studio Sacramento episode is supported by UC Davis Health, where doctors, nurses and researchers share a passion for advancing health.

Learn more about their latest medical innovations at health.ucdavis.edu.