Ann Arbor Downtown Premium Prioritization What? The Ann Arbor Planning Commission is asking the public to share ideas in April 2015 on how downtown premiums, incentives of additional building area, might be changed to better align with today s needs and goals for downtown Ann Arbor, such as affordable housing, energy efficiency and quality design. The process is a continuation of 2013 Downtown Zoning Evaluation, requested by City Council to address whether the D1 (Downtown Base zoning district) residential Floor Area Ratio (FAR) premiums effectively encourage a diverse downtown population. The Planning Commission s Ordinance Revisions Committee (ORC) is overseeing the process. ENP & Associates, a planning consulting firm based in Ann Arbor, was hired to facilitate again with assistance from Planning and Development Services. Your comments will be shared with the public at http://www.a2gov.org/premiums and reported to the Ordinance Revisions Committee (ORC), the Planning Commission and City Council to inform their policy choices about the Downtown Premiums. Let s Talk! We are hosting a series of events at different times and places around the downtown April 6-23 to talk about changes to the Downtown Premiums. The schedule is: Monday, April 6, 4-5 p.m. Community Coffee Hour. Amer s, 611 Church Street. Wednesday, April 8, 8-9 a.m. Community Coffee Hour. Starbucks, 222 South State Street. Monday, April 13, 8-9 a.m. Community Coffee Hour. Sweetwaters, 123 West Washington Street. Friday, April 17, 5-6 p.m. Happy Hour. Bill s Beer Garden, 218 South Ashley Street. Sunday, April 19, 3-4 p.m. Community Coffee Hour. Zingerman s Deli, 422 Detroit Street Thursday, April 23, 7-8:30 p.m. Public Meeting. Workantile, 118 South Main Street Take the Survey! We have posted a survey on Downtown Premiums, which will be available April 6 through April 20. Go to: www.a2gov.org/services/pages/ a2opencityhall.aspx Contact us! Please feel e-mail or call us with input, suggestions, ideas or questions: Megan Masson-Minock, ENP & Associates 734-646-3163 megan@enp-associates.com Page 1
What is a Downtown Premium? Parcels where Premiums are Allowed Downtown Zoning Premiums is an incentive program that allows additional floor area when certain uses or features are provided as part of the development. The uses or features (such as residential uses, affordable housing, pedestrian amenities, green building, historic preservation, and public parking) are generally things that the market is not providing but the community wants. Ann Arbor s Downtown Zoning Premiums are available to any building in the downtown zoning districts that is not in a historic district or a floodplain (see map to the right). Each premium option offers a specific formula depending on how much the community values the use or building feature. When valued uses are provided (i.e. residential uses, affordable housing), additional square footage is allowed. When valued features are included, an increased floor area ratio (FAR) maximum is allowed. As an incentive program, a developer chooses whether or not take advantage of the Downtown Zoning Premiums offered. The premiums are awarded to every development that meets the conditions of the program. Page 2
Premiums by Zoning District & FAR Floor to Area Ratio (FAR) Building area is controlled by floor to area ratio (FAR), the proportion between the area of a piece of property and area of all the floors in a building. For example, a 10,000 square foot lot with a maximum FAR of could have up to 40,000 square feet of floor area. FAR allows a variety of building configurations. All of the buildings on the right side of the page are modeled on a lot with 9,375 square feet, a FAR of built to the maximum square footage of floor area of 37,500 square feet. The colored stacked bars show the base and premium FAR by zoning district. D1: Downtown Core District Affordable Housing FAR 900 Premium FAR 700 D2: Downtown Interface District Premium FAR Base FAR Base FAR 200 Images by Winter & Company + RACESTUDIO Page 3
How Downtown Premiums Work The Downtown Premiums offer additional floor area measure in FAR for certain features or uses. When the downtown zoning districts were consolidated into two districts through a process known as A2D2 (Ann Arbor Discovering Downtown) in 2009, a menu of premiums were introduced. Prior to 2009, only residential premiums were offered in downtown Ann Arbor. The table below shows what the premium is for, the size of the incentive and whether they have been used: Premium Type Size of incentive Was it used? Residential Units (Larger FAR Premium) 0.75 square foot premium for every 1 square foot residential use Yes, for all buildings opting for premiums Affordable Housing (Larger FAR Premium) Green Building (Qualification & Larger FAR Premium) 3,000 square feet for each affordable housing unit with increased cap of up to 900 FAR Energy efficiency steps to qualify (2 points under LEED Energy & Atmosphere credit) Increase of 50% for LEED Silver, 150% for LEED Gold, 250% for LEED Platinum No Yes, all building opting for premiums met the energy efficiency credit 1 building used LEED Silver Historic Preservation (Smaller FAR Premium) 50% increase for historic preservation No Pedestrian Amenity (Smaller FAR Premium) 10 square feet of building space for 1 square foot of pedestrian amenity No Public Parking (Smaller FAR Premium) 1 square foot of building for 1 square foot of parking, up to 200% of lot area No Information from Ann Arbor Planning & Development Services Page 4
Brief History of Downtown Buildings & Premiums 413 E. Huron State Street Lofts Liberty Lofts Zaragon Place Zaragon West Page 5
3 Buildings & Premiums Zaragon West 401 Thompson Street The Foundry 413 E. Huron 618 S. Main 618 S. Main Zoning District: D1 Overlay District: First Street Premiums Used: Residential Zoning District: D1 Overlay District: E Huron 1 Premiums Used: Residential Zoning District: D2 Overlay District: First Street Premiums Used: Residential Maximum FAR allowed: 700.0 Total FAR for building: 681.5 Maximum FAR allowed: 700.0 Total FAR for building: 663.5 Maximum FAR allowed: Total FAR for building: 308 FAR Type FAR Type FAR Type 800 800 800 700 700 700 Premium FAR 600 500 281.5 600 500 263.5 600 500 Base FAR 300 200 300 200 300 200 108 100 100 100 200 0 0 0 Page 6
Energy Efficiency The Ann Arbor Climate Action Plan and other plans have community goals dealing with energy efficiency that could be helped by premiums. The Planning Commission is looking for ideas on how to use premiums to encourage energy efficiency measures that are not standard practice for a modern building. The following lists are ideas drawn from the Climate Action Plan, LEED menus and comments from appointed officials and the public: Qualification Reduction of indoor water use Indoor Air Quality performance Minimum for energy performance of overall building Energy efficiency standards for appliances Zero waste construction Metering and reporting of energy use levels for a minimum of 5 years Metering water usage at a building level Smaller FAR Premium Green roof Reflective roof (to lessen heat island affect) Sustainable energy source Storm water recycling Wastewater recycling Larger FAR Premium LEED Silver, Gold, or Platinum Green roof Reflective roof (to lessen heat island affect) Sustainable energy source Storm water recycling Wastewater recycling Case Study: Arlington Co., VA Arlington County, Virginia has used FAR premiums to incentivize energy efficient building linked to LEED standards since 1999. The program has resulted in at least one but up to 10 LEED certified buildings approved annually between 2001 and 2013. The program has been revised three times to adjust to market demands, changes in technology and LEED standards. The program was revised in November 2014, adopting LEED Version 4 and allowing up to 0.05 FAR for achieving two of seven green building option made a priority by the County. The premiums are not automatically awarded, but the Board of Commissioners has discretion to award up to a certain amount, based on the proposed green building attributes and certification. ArborBLU at 624 Church Street The ArborBLU building, currently under construction, is the type of building an energy efficiency scenario would incentivize. The developers have committed to gaining LEED Silver Green Building Certification. Page 7
Quality Design Downtown Design Guidelines, created in 2011, are advisory. All premium applications must be reviewed by the Design Review Board, but their findings are advisory as well. In the 2013 Downtown Zoning Evaluation, most participants said the bar for design for premiums needed to be higher. The Planning Commission wants input on how premiums could encourage better design in downtown. The following lists are ideas drawn from the Downtown Design Guidelines and comments from appointed officials and the public: Qualifications Façade matches the adjacent buildings Clear definition between base floor(s), upper floors and cornice/roof line Corner gateways Pedestrian-enhancing sidewalk level features Location, size and percentage cover of windows on first floor so pedestrians can see inside the building and vice versa Design matches the historical character of any adjacent historic building or district Approval by the Design Review Board Smaller FAR Premium Pedestrian-enhancing sidewalk features Active first floor use such as a store or restaurant Preservation of historic aspect of a building Pedestrian connections Cycling and transit amenities Larger FAR Premium Use of high-quality materials Urban open space, parks or plazas Underground parking Discretionary FAR awarded by the Design Review Board for design excellence Case Study: Iowa City, IA Iowa City has requirements for building design, relationship of the building to the site, landscaping, signs, awnings and canopies. In addition, Iowa City offers a bonus in the Planned High Density Multi-Family Residential (PRM) zone, based on a point system. Points are awarded for use of certain materials, open space, historic preservation, assisted housing, streetscape amenities, landscaping and windows. Points can be spent on setback reductions, height increases, density bonuses or building coverage increases. Zaragon West at 401 Thompson St. In the 2013 review of the downtown zoning, many cited the building above as an example of quality design. It complies with the Downtown Design Guidelines for street level interaction and design. Page 8
Housing Affordability The affordable housing premium currently offers the greatest floor area incentive, but not a single project has utilized it. In interviews, developers stated that they did not use the affordable housing premium because the residential premiums were enough, affordable housing units were not part of their business plan or the profit loss on the affordable units was not sustainable. Also, the height limit in several cases was not high enough to allow the 900 FAR available with the affordable housing premium. In February 2015, the Ann Arbor City Council adopted a new set of affordable housing goals committing the city to working with other partners to create nearly 2,800 new affordably priced rental units in the city by 2035. Washtenaw County suggests in-lieu payments as an option with housing affordability option, but their legality is questionable. As part of the conversation about premiums, the Planning Commission needs public input on the following questions: What should incentives do? Guarantee that those working downtown can live there Create housing that households making $25,000 to $50,000 can afford Create 1 or 2-bedroom units What are the results in 5 years? The average rent or mortgage payment for downtown residents is closer to that of the Washtenaw County A certain number of units affordable to households making $25,000 to $50,000 are built and occupied in the downtown The Ann Arbor Affordable Housing Trust Fund has grown The number of units affordable to households making $25,000 to $50,000 in the City of Ann Arbor has grown Case Study: Denver, CO Denver uses a combination of downtown zoning premiums and the Incentive Housing Ordinance (IHO) to incentivize affordable housing throughout the city. The downtown zoning premiums grant developers additional heights or cash incentives to construct residential housing units in the downtown area. Developers can also use premiums for active street spaces or connections to transit. Since 2002, 1,155 affordable units have been built, financed, or leveraged. A cash in-lieu payment is an option, which was used for all developments in the downtown. In 2014, Denver revised the program with higher thresholds for cash-in-lieu payments and cash incentives for affordable housing units downtown. City Place Apts. at 201 S. 1st St. City Place Apartments has affordable units, which were required by the DDA when they sold the property. With changes to the premiums, more buildings with affordable units could be incentivized. Page 9