By Thomas J. Walsh
Should Philadelphia employ incentive or “bonus” systems for developers within the Zoning Code that is now being re-written?
That was on the minds of the Zoning Code Commissioners Wednesday morning at their monthly meeting, after a presentation by Michael Dyett, one of the consultants hired to complete the multi-year re-write effort. Dyett spoke about lessons from other cities for re-zoning Center City in particular.
“You care deeply about your downtown, and if you’re not careful, that deep caring turns into unbelievable complexity,” said Don Elliott, senior consultant for Clarion Associates, the Denver-based lead consultant, when introducing Dyett. “There are ways of making it simpler.”
Dyett addressed “what might Philadelphia be able to do to respond to the mandates that you’ve outlined in your code. You have, as you heard from the assessments, lots of different layers.”
Dyett was referring to the onerous context of Philadelphia’s current Center City zoning, with 28 different “special area controls,” or overlays, that dictate uses, height, signage and a host of other restrictions – some of them related to historic districts, some of them simply dealing with off-street parking, and so forth.
It was in some ways another presentation that reinforced the goal of simplification that the ZCC needs to accomplish. Careful mapping could convey the controls of these 28 areas much more succinctly, Dyett said.
“Zoning isn’t all ‘Thou shalt not,’” Dyett said. “I like to think of zoning as a really positive experience. … It can look at land use. It can express expectations for performance. … It can provide incentives for public benefit, where city dollars can be stretched to partner with the development community and get some specific investments that you want and need.”
The base FAR map – the “floor area ratio” – is something a city like Chicago has in place that Philadelphia might consider, he said. Variations on FAR use for zoning, including incentive-based bonus systems, are innumerable, and work better in some cities than in others.
These can involve “sending areas,” such as historic sites with undeveloped tower space above (like the current Ritz Carlton dome at Broad and Chestnut streets) and “receiving areas,” such as, say, underdeveloped transit hubs elsewhere in the city that could use that extra space to build density. Both sending and receiving areas would then be covered by deed restrictions.
These kinds of swaps have been used for 25 years for historic structures, Elliott added, where “all you’re selling is the box they didn’t use (above the site).” But San Francisco and other cities are now using it to address the increasing problem of affordable housing.
“It’s a spin on the idea,” Elliott said, to the point where the “imaginary boxes” are being put aside when it comes to negotiating the preservation of a historic site, in lieu of simply building (or maintaining) affordable housing in exchange for certain development rights.
It sounds complicated, and is, but Commissioner John Westrum, a developer, applauded Dyett for championing what he sees as a push toward the “transparent predictability” that Philadelphia’s new zoning code so desperately needs. Westrum also called for a means by which developers and city officials can quantify the financial effects of FAR bonuses and other tools to make sure they are worth pursuing before any transactions take place.
“Fifteen years ago I did the zoning for downtown Denver, and that’s exactly what we did,” Elliott said. “We had 21 bonuses (incentive scenarios), and we ran the numbers on the Denver economy on that, and 17 of them made no sense. Anybody who took five minutes with a pencil would say, ‘We should ignore this.’” Denver ended up with just four FAR bonus scenarios.
Commissioner Greg Pastore, a Bella Vista property owner, raised some red flags on the issue.
“We have a lot of rowhouses here – a half million of them and 60,000 are empty,” Pastore said. “I think we want to be very careful before we get anywhere near affordable housing bonuses.” Trading development rights to have affordable housing makes no sense in that context, he said.
“We want to also be careful of having any kind of bonus that changes what we think of as the planning structure,” Pastore continued. As a hypothetical, he wondered what the point would be of allowing an extra tall building in exchange for the developer doing what would be generally considered positive work elsewhere in the city. In that case, “you’ve waived your authority as planners to decide what’s right for that location” – the location of the tall building. “I feel we have to be very careful about that.”
Dyett agreed, and said that Portland demonstrated a way of addressing such concerns by limiting their bonus improvement incentives to just one area – the city’s former Skid Row. In Scottsdale, Ariz., a six-month “fire sale” on bonuses was staged for the improvement of two specific streets – meaning there were two limits: space and time.
“Start with the planning, and use the bonuses in places where there’s no public money but that supports the planning concepts,” Dyett said. “It has to be very place-based.”
What’s more, a proper FAR map creates order in the real estate market, he said, reducing risk and promoting development. Negotiated transfer rights and bonus systems, on the other hand, “are terrible.”
Wrapping up, Greenberger told Dyett and Elliott that the presentation “excites us and terrifies us all at the same time,” given the amount of work still needed.
First District City Councilman Frank DiCicco, scheduled to brief the commission on the legislation crafted from his office for the interim overlay district for the Central Delaware waterfront area, delayed his presentation.
Planning Commission Executive Director Alan Greenberger briefed the commission on the budget submitted for the Zoning Code Commission, which he said went through with only one question. But it’s only been entered into the record, he stressed – not accepted yet.
“I hope that everyone realizes that [re-writing the zoning code] is a process that must go on no matter what,” Greenberger said.
The proposed $500,000 budget for 2010 includes $150,000 in salaries (for ZCC Executive Director Eva Gladstein and one other fulltime ZCC staffer, yet to be hired); $335,000 for the next phase of consulting work; and $15,000 in general miscellaneous expenses.
The next Zoning Code Commission meeting is scheduled for June 10 at 8 a.m.