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Property owners question value of transferring development rights

Thursday, May 27, 2010 by Kimberly Reeves

A proposal to use development rights to preserve the buildings in downtown’s warehouse district got significant push back from property owners Tuesday night.

 

The Planning Commission intended to discuss the preservation of the warehouse district as part of a larger discussion of downtown density bonuses. But a quartet of property owners, including Tim Finley, talked about the limitations that a preservation effort would put on warehouse district property.

 

Finley pulled out a 1988 plan for downtown, noting that the warehouse district then fell within a proposed triangle for high-intensity, mixed-use development. That made more sense for the properties in the warehouse district than the current plan to preserve and limit the height of the buildings, Finley said.

 

“With this 45-foot height limit, we would not be able to develop our property,” Finley said. “We cannot economically do it and include parking.”

 

Diana Zuniga, who is co-owner of the building in which the Qua nightclub is located on West Fourth Street, said the area designated for the warehouse district was only one block wide and located within a wide swath of equally historic buildings in the area. It’s spot zoning, she said.

 

Under the tentative proposal, which is part of the downtown plan, property owners willing to limit their property to 45 feet within the warehouse district would be allowed to transfer, or sell, their development rights. Other developers would be able to buy the difference in allowable height on warehouse district blocks.

 

“I think the value of TDRs (transfer development rights) is speculative if the city can change the rules at any time,” Zuniga said. “Our CBD zoning was considered very valuable when we made the investment in the property.”

 

Commissioner Mandy Dealey, who chaired the density bonus discussion, said the warehouse district and transfer development rights proposal was much more of an “if, then” proposition than an endorsement of the concept. If the Council were to move forward with the warehouse district preservation, then the Planning Commission would have recommendations for working toward that solution.

 

Dealey’s colleagues echoed her lack of commitment on the TDR issue. Both David Anderson and Chair Dave Sullivan said the real support for the warehouse district and TDRs would come with a review of the full plan and not the forwarding of suggestions for the downtown density bonus.

 

The most difficult work for the commission, Dealey admitted, was hammering out an agreement on affordable housing for the density bonus. Some of the more salient points under the Planning Commission’s provision included:

 

— Fees in lieu should be spent as quickly as possible, with at least half the money spent downtown. Funds spent outside downtown should be concentrated in a tight radius along core transit corridors with transit service.

 

— Funds spent outside of downtown should be spent in cooperation with a local community housing development corporation, if one exists in the neighborhood.

 

— The distribution of affordable housing downtown should attempt to align more with the income distribution of those working downtown. Some rental units downtown are affordable for two-income families. The trend, however, is toward more expensive rental units. The downtown plan should propose no net loss of affordable housing units.

 

Commissioner Kathy Tovo proposed adjusting language in the proposal to support family-friendly housing. That would not mean incentives for market-rate housing that includes additional bedrooms. Instead, it would mean incentives for units, constrained by space limitations, that would provide affordable housing.

 

According to current statistics, 1,789 rental units are located downtown. The average rent is $1,881. The average floor space is 1,054 square feet. That means the average unit is priced at $1.78 per square foot.

 

For the final vote, the Planning Commission also pulled its recommendation for CURE zoning. Sullivan noted it was the second time the commission had put off a decision on how to resolve the CURE zoning issue.

 

The final vote on the proposal, which will go to the Council Comprehensive Plan and Transportation subcommittee, was 8-0, with Commissioner Saundra Kirk absent.

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