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HomeMy WebLinkAboutagenda.council.worksession.20160809 CITY COUNCIL WORK SESSION August 09, 2016 4:00 PM, City Council Chambers MEETING AGENDA I. Housing Fund Capital Project Update II. Land Use code revisions P1 Page 1 of 2 MEMORANDUM TO: Mayor and City Council FROM: Cindy Christensen, Deputy Director, APCHA Pat Hinch, Property Manager, APCHA THRU: Mike Kosdrosky, Executive Director, APCHA DATE OF MEMO: August 3, 2016 MEETING DATE: August 9, 2016 RE: Approval of Additional Expenditures within Capital Projects at Marolt Ranch, Truscott Phase 1 and Truscott Phase 2 REQUEST OF COUNCIL: To approve the transfer of funds proposed for one capital project for use of another capital project. BACKGROUND: There are three items that staff is requesting approval: 1. The Marolt Ranch property sees a high use of the laundry facilities, not only in the summer with the Music students, but in the winter with the seasonal employees. A laundry room upgrade going to Smart Cards had been budgeted for partial replacement in 2016 with completion in 2017. The completion portion had been moved to 2018 due to direction from the Finance Department. The Marolt Finance Committee has requested that the upgrade be completed prior to the beginning of the 2016 winter season at a cost of $14,800.35. This includes the Smart Card Reader at $7,335.95 and the Value Add Machine (which allows the user to add money to their card) at $7,464.40. The variance to the budgeted amount of $6,000 is $8,800.35. This will not impact the Marolt Ranch budget as $10,160 was saved on the exterior painting. 2. At Truscott Phase 1, Buildings 800 and 900, the handrail replacement of the stairways was an additional $3,500. The project was budgeted at $13,000, but additional changes had to be made to meet code requirements; therefore, the project cost $16,500. 3. Truscott Phase 2 will see an increase of $8,000 to make un-budgeted repair s to decks and handrails because of safety issues found during the annual inspection of all units. The formal approval for the $8,000 will be made to the APCHA Board as they are the General Partner and approve the Truscott Phase 2 budgets. DISCUSSION: The reasons behind the requests are as follows: P2 I. Page 2 of 2 1. The Smart Card system, along with the Value Add Machine, replaces the need for quarters as well as APCHA staff going to the bank to deposit the quarters on a regular basis. This allows a tenant easier access to the laundry rooms and will also maintain the use by tenants only. Staff has reported other individuals using the machines due to the lack of laundromats in town, as well as the cost is lower than that in town. The Value Add Machine allows a tenant to do laundry 24 hours a day instead of waiting until the Assistant Property Manager is on duty to add funds to their card. Hopefully, this will create an increase in revenue for Marolt as well. 2. The handrail replacement for the 800 and 900 buildings was a safety issue. Due to a newer code being in place, additional requirements were needed that were not budgeted. 3. During the annual inspection of all units that are managed by APCHA, there were certain decks and handrails within the Truscott Phase 2 units that were found to be potential safety issues. The funds being requested are to remedy the potential safety concerns. FINANCIAL/BUDGET IMPACTS: 1. The Marolt Ranch addition of the Smart Card and the Value Add Machine will not create any financial impact to the budget as there was a savings of $10,160 for the exterior painting. 2. The handrail replacement for the 800 and 900 buildings has been completed due to the safety issue; there will not be a negative financial impact to the budget as there was a savings of $13,500 on a separate concrete project. 3. The Truscott Phase 2 increase to the budget is needed for safety reasons and will be reviewed and approved by the APCHA Board. RECOMMENDED ACTION: To recommend that this be added for formal approval in the fall Supplemental Request. ALTERNATIVES: Due to the safety issues, APCHA is recommending approval due to there being no financial impacts. CITY MANAGER COMMENTS: P3 I. 8.9.16 Council Work Session Commercial and Residential Use Mix and View Planes Page 1 of 7 Memorandum To: Mayor Skadron and City Council From: Jessica Garrow, Community Development Director Phillip Supino, Principal Long-Range Planner Justin Barker, Senior Planner Reilly Thimons, Planner Tech Meeting Date: August 9, 2016, 4:00 PM RE: Land Use Code Revisions – Commercial and Residential Use Mix and View Planes REQUEST OF COUNCIL: As part of the work to update the Land Use Code, Council is asked to provide feedback on commercial and residential use mix and view planes. Council is asked to identify which options for commercial and residential use mix should be explored in more detail and brought back at the August 29th work session (See Exhibit C for “checklists” with identified potential options). BACKGROUND: One of City Council’s top ten goals is to update the Land Use Code to better reflect the Aspen Area Community Plan (AACP). This includes a number of topics, including examining commercial and residential mix and view planes. Focused on Commercial Design Standards, Use Mix and Off-street parking, the public outreach and research efforts have yielded useful data and generated increased public participation and understanding. All projects are on target for completion in the early fall. Over the summer, staff and consultants have been working to gather community input on all the potential code amendment topics. Specific to commercial use mix, consultants Mark White and Alan Richman have conducted small group and individual interviews with business owners, members from City Council and CCLC, and community members. In addition, feedback has been gathered in pop-up workshops throughout town and on the project website, www.AspenCommunityVoice.com. For residential use mix, outreach to date has focused primarily on pop-ups and website comments, with some small group participants providing comments on the issue. On View Planes, staff is requesting additional direction from Council in order to ensure robust public outreach on this topic. To date, over 400 people have been engaged in the efforts to update the Land Use Code. COMMERCIAL USE MIX: The objective of this work is to identify strategies to encourage a sustainable mix of commercial businesses within the City’s downtown and commercial zone districts. Aspen’s unique variety and density of commercial uses is an important aspect of its character. As stated in the AACP (“The Commercial Sector, page 20): “There is a concern that businesses providing basic necessities will be replaced with businesses providing non-essential goods and services. High-profile locations in the downtown have steadily converted from restaurants to retail spaces, some retail spaces have transformed to offices, and high rents have resulted in a continuing shift towards exclusivity. The character of our community is bolstered by a diverse commercial mix. While we have taken some steps to P4 II. 8.9.16 Council Work Session Commercial and Residential Use Mix and View Planes Page 2 of 7 increase retail diversity, we must pursue more aggressive measures to ensure the needs of the community are met, and to preserve our unique community character.” The White & Smith, LLC team (Mark White and Alan Richman) is leading the use mix project, building on prior work conducted in 2008. The 2008 Locally Serving Business Report, attached as Exhibit A, identified a number of regulatory and non-regulatory tools to encourage locally serving businesses, and to minimize market conditions that supplant them. Based on the information gathered to date, there are a number of potential regulatory tools that could be further explored. These options are listed below, and a more detailed discussion of each potential option will be presented at the work session. At this point, these tools have not been fully investigated. Staff requests Council identify which, if any, of the tools are of interest for further investigation and discussion. 1. Zone District Approaches a. Expand/modify zone district boundaries – rezone some areas to NC/SCI or modify district standards to include specific references to the desired business types. b. Tailor use list and/or dimensional standards – revise list of uses and/or dimensional requirements within commercial zone districts to allow or encourage desired uses and disallow or discourage undesirable uses. c. Create local serving business district (LSB) – create a new zone district or overlay geared toward “local serving businesses.” This would require establishing a definition of “local serving business.” 2. Use Limitations a. Use size restrictions – impose either a basic cap on size or tie size to a requirement to demonstrate use is locally serving. b. Use caps and spacing requirements – limit the number of designated uses permitted in a district or requiring a minimum distance between designated uses. c. Chain store/formula retail restrictions – restrict, cap, impose discretionary review, or outright ban chain stores. d. Conditional use/special review – modify conditional use lists and review criteria or apply a discretionary review to uses that exceed a designated threshold, such as FAR. 3. Design/Incentive Approaches a. Modify design guidelines – modify guidelines to encourage second-tier business spaces, or spaces less suited for high end retail uses. b. Height/floor area bonus – create bonuses for encouraged uses. This could mean downzoning current height or floor area allowances and providing incentives to certain uses that would align with current zone district dimensions. c. Parking or affordable housing reductions – allow reductions in parking or affordable housing requirements to encourage desired uses. d. GMQS scoring – create a competitive growth management system that encourages certain uses. The City instituted a scoring system in 2007, but repealed it in 2014 due to lack of competition for allotments. e. Legacy business program – create a registry for qualifying businesses that could provide incentives. 4. Impact-Oriented Systems P5 II. 8.9.16 Council Work Session Commercial and Residential Use Mix and View Planes Page 3 of 7 a. Mitigation standards/fee-in-lieu – require mitigation or fee-in-lieu for new development that would fund establishment of local serving businesses. b. Ratio-based program – develop an optimum ratio of locally serving business and high end commercial that could not be exceeded. c. Commercial replacement requirements – require certain uses to be replaced when a building is redeveloped. STAFF RECOMMENDATION: A summary of the tools that, at initial glance, appear to be the most appropriate or that require attention and clear policy direction include: • Define local serving businesses. No matter what options are ultimately pursued, staff believes the city needs to clearly define the kinds of businesses it is trying to encourage. This could include businesses that serve day-to-day consumer needs, businesses that are “funky” and unique, legacy businesses, or all of the above. The term “local serving business” has been used throughout this memo to maintain consistency, however staff recommends further exploration of the term, as it can be argued that nearly every store in Aspen serves a segment of the local community. • Update of the use list for NC and SCI. This option would provide a more comprehensive list of uses than is found in the districts today, allowing the city to more effectively target the uses that are allowed, where they are allowed, which require discretionary review, and which are not permitted. • Revise the Commercial Design Guidelines to provide opportunities for second tier business spaces. There is a significant interrelationship between the design of a new building and the uses it will likely contain. Staff would look further into this and provide more detailed information at a future work session related to Commercial Design. Some discussion of the trade-offs between how design standards can impact what types of businesses can locate in a building should be part of the continued land use code discussions. • Uses to restrict/uses to promote. This includes discouraging uses that impair policies for downtown and the commercial districts – either by supplanting space needed for those businesses, driving up costs, or by taking direct action to prohibit uses in the downtown area. The City has done this in the past, most notably with the ground floor office space ban in the Commercial Core and Commercial zone districts. On the other hand, the kinds of uses that disappear often do so because of the cost of doing business in Aspen, and may need regulatory incentives to remain in place. • Analysis of chain/formula regulations. Restrictions on chain businesses have become somewhat of a trend in resort communities throughout the nation. Residents and businesses have expressed interest in this type of restriction in Aspen. For various reasons, staff does not recommend that the Council further discuss these restrictions at this time. If Council is interested in discussing this option in more detail, this can be included on the August 29th agenda when the City Attorney and Mark White will be able to provide additional detail. QUESTIONS FOR COUNCIL: P6 II. 8.9.16 Council Work Session Commercial and Residential Use Mix and View Planes Page 4 of 7 1. Which regulatory tools does Council wish to pursue for further discussion? RESIDENTIAL USES: One of the main reasons the moratorium was established was to address the impact free-market residential uses have on commercial uses in the same building. The rationale behind the 2004 infill regulations was to allow free-market residential uses in the downtown area and other commercial zones in an effort to enable reinvestment in a deteriorating commercial base. The unintended consequences of those changes have yielded some unwelcome impacts to commercial uses. Thus, land use codes have changed, and new free-market residential units are no longer allowed in the Commercial Core (CC) and Commercial (C-1) zone districts.1 While the issue was partially resolved in the CC and C-1 zone districts through code changes in 2012 and 2015, the demand for free-market residential units near the downtown has not gone away. Staff has used the moratorium process to explore the relationship between commercial and residential uses downtown in the context of the Commercial Design Standards and use mix analysis, including: 1. Research more information regarding what “micro units” are and how they have been used in other communities. 2. Explore required physical separation of free-market residential units from commercial spaces within the Mixed Use zone district. 3. Explore feasibility of an occupancy requirement for free-market units in commercial zones. 4. Work with APCHA regarding future feasibility of for-sale affordable housing units in mixed-use buildings. If City Council is interested in allowing free-market residential uses in commercial zone districts, the regulatory options listed below could be considered. Staff recommendations are included in the discussion. Micro-Units: Following extensive research, staff has prepared white paper on micro units, which is included as Exhibit B. The paper provides background information on micro housing nation-wide and outlines some of the opportunities and challenges of implementing micro housing in Aspen. The white paper may be used as a basis for discussion and further inquiry into the feasibility of micro units in Aspen. Given the complexity of Building and Land Use Code changes required to facilitate micro unit development, as well as the occupancy and deed restriction concerns revealed through staff analysis, staff recommends Council not include micro units in the suite of code amendments that may emerge from the moratorium process. Staff continues to have reservations about micro unit occupancy and usage. In previous meetings, both Council and the Planning and Zoning Commission expressed concerns, which staff shares, of an individual or entity purchasing all micro units in a building and illegally converting them into a single unit. Further exploration of how micro units may be implemented could be conducted after the moratorium process is completed. 1 Existing free-market residential units are currently allowed in the CC and C-1 zone districts. Staff recommends that any code amendment regarding free-market residential units continue to allow those units that exist to remain as a legal use. The code also allows the combination of existing free-market units in these zone districts as long as the overall square footage associated with the free-market residential use does not increase on the property. Staff recommends this allowance remain in any future code change. P7 II. 8.9.16 Council Work Session Commercial and Residential Use Mix and View Planes Page 5 of 7 Physical Separation: The walking tours and small group meetings held during Commercial Design Week yielded some interesting and useful input from members of the public regarding the built environment on Main Street and the Mixed-Use Zone. Specifically, respondents noted the appeal of a mix of residential and commercial uses and structures, the smaller scale of buildings within the MU zone and larger setbacks from Main Street as character-defining aspects of the area. While preservation and enhancement of these features would not necessarily preclude requiring the physical separation of commercial and residential uses (as has been discussed in previous work sessions), such changes to the development standards in the zone may have an effect on its future character and physical form. As with other aspects of the moratorium analysis process, the results of Council action regarding Commercial Design Standards will impact staff recommendations regarding physical separation of uses in the MU zone. Thus, staff recommends further analysis of the options available following receipt of the first draft of the consultants Commercial Design Standards report in late September. Occupancy Restriction: If Council is interested in allowing free-market residential uses in commercial zones, one option would be to only allow units that will be occupied by a local resident. This would be similar to the current APCHA Resident-Occupied deed restriction, but would not necessarily require an individual work in Pitkin County, just that they live a majority of the year in Aspen (RO Light). P&Z strongly supported exploring occupancy restrictions as a way to invest in the local community and ensure vibrancy. Staff recommends moving forward with options to require an occupancy restriction for any “free-market” residential use allowed in the Commercial zone districts. From initial conversations with APCHA this could take the form of the current RO deed restriction, or may need to be a different type of deed restriction. Staff will continue to work with APCHA to refine potential options for Council. If this option is pursued, staff recommends the allowed floor area for these occupancy restricted units be different than more traditional affordable housing units. Affordable Housing: There have been mixed comments during the community outreach sessions regarding the appropriateness of affordable housing units in commercial zones. Comments are generally split between those who think affordable housing is appropriate in these zones (because it provides additional housing opportunities in town and more “lights on” throughout the community), and those to do not (because it potentially displaces commercial uses). While the AACP encourages affordable housing to be integrated throughout the community, including mixed use areas, the community outreach and analysis process has not yet yielded clear direction on how best to reconcile that AACP language with some of the challenges associated with implementing it. Additionally, discussions with APCHA have revealed a tension between the desire for on-site affordable housing units in a commercial or mixed-use building, as articulated in the AACP and the current land use code, and the realities of the mortgage lending market. While the option for downtown residential ownership properties is appealing, due to federal lending standards from the Department of Housing and Urban Development, Fannie Mae and others, it is challenging to obtain a home loan for the purchase of a residential condo in a mixed-use building. The federal standards have a spill-over effect in the private lending market as well. Those challenges are compounded when a deed restriction is in place. P8 II. 8.9.16 Council Work Session Commercial and Residential Use Mix and View Planes Page 6 of 7 Furthermore, private condo loans or those needed to purchase residential space in mixed-use buildings typically require a higher down payment (as high as 20%) compared to more traditional townhome or single family properties, raising the financial barrier to ownership. This has resulted in the APCHA Board recommending any on-site affordable housing unit located in a mixed-use building be for-rent, as opposed to for-sale. This is an issue that should continue to be part of the discussion as code amendments move forward. QUESTIONS FOR COUNCIL: 2. Does Council support staff’s recommendation to not pursue micro units at this time? 3. Does Council have any questions about the relationship between Commercial Design Standards and use separation in the Mixed-use zones? 4. Should staff continue to explore the potential for use separation following the conclusion of the Commercial Design Standards revision process? 5. Does Council support staff’s recommendation to pursue some kind of occupancy restriction for new free market residential units? 6. Does Council support the concept of affordable housing units in commercial zones? 7. What other options should staff pursue in analyzing the feasibility of residential uses in downtown? VIEW PLANES: In February of this year, Council instructed staff to review the existing view plane protections for effectiveness and assess the community’s priorities for view plane protection. At this time, staff has conducted initial public outreach efforts to gauge the community’s feelings on how best to regulate and preserve view planes. Staff recommends that the public outreach continue to take a broad approach and ask the community to identify what views they believe are most critical to protect. However, additional direction from Council is needed to set the parameters for the view plane discussion and amendment process. Given the scope of the Commercial Design Guideline inquiry, much of the view plane analysis may depend on the outcomes of the Commercial Design Guideline process. It may be counterproductive for staff to spend time and resources on the view plane inquiry if the end result were to conflict with the outcomes of the commercial design process. As such, staff expects the view plane process to extend deeper into the fall. Staff has identified three general courses of action for the view plane analysis and amendment process, and asks Council for initial direction on which to pursue: 1. Seek to clarify and simplify the existing code language regulating development in view planes. This could ease confusion in interpretation of the code without altering the protections currently in place for view planes. 2. Explore minor amendments to the regulations such as limiting the linear distance from a given view plane point, with the intent of clarifying and modifying the regulations without eliminating them from the LUC. 3. Complete a holistic rewrite of the view plane regulations. This would require the most rigorous public process, as well as requiring additional staff time and the assistance of outside professionals. Of the three options, staff recommends either clarifying and simplifying (option one) or minor amendments (option two) to the language regulating view plane preservation. Additionally, staff recommends waiting to engage the public more fully and contract with consultants regarding view plane P9 II. 8.9.16 Council Work Session Commercial and Residential Use Mix and View Planes Page 7 of 7 regulations until after draft Commercial Design Guidelines have been discussed by Council in September. QUESTIONS FOR COUNCIL: 8. Which of the View Plane amendment options does Council wish to pursue at this time? NEXT STEPS: Staff believes all projects – commercial design, public amenity, use mix, residential mix, view planes, and off-street parking – are on target for completion in late 2016/early 2017. The next work session is scheduled for 4pm on Monday, August 29 to review all of the code amendment topics. This will be a longer work session, with dinner provided. All consultant teams will be at the work session to present the information gathered to date, and so Council can ask questions regarding how different efforts are coordinated. Staff’s goal is to get some initial direction on specific policies that should be integrated into the code. The consultants will present different options related to their specific work for Council to discuss and give direction. The tentative schedule for that work session is: 1. Discussion of AACP and how future code amendments will implement the AACP. 2. Overview of a code update “blueprint” 3. Discussion of all anticipated code amendment topic areas: a. Commercial Use Mix options b. Free-Market Residential options c. Commercial Design Standards and Public Amenity regulations d. View Planes e. Off-Street Parking and Mobility requirements Following the August 29th work session, a series of small group meetings and open houses will be held over the week to gather additional community feedback on the topics. This information will be compiled with the initial direction received tonight and presented to Council at September work sessions, in anticipation of moving into specific code amendments in October. In either late September or early October, a large community meeting or open house will be held to get final input prior to moving into code language with City Council. ATTACHMENTS: Exhibit A – 2008 Aspen Locally Serving Business Report Exhibit B – Micro Housing White Paper Exhibit C – Regulatory Tools Checklists P10 II. Mark White, White & Smith, LLC 230 SW Main Street, Suite 209 | Lee’s Summit MO 64063 816.221.8700 (p) | 800.756.2798 (f) www.planningandlaw.com City of Aspen Commercial Mix Strategies to Preserve Locally Serving Businesses June 25, 2008 P11 II. City of Aspen | Commercial Mix Strategies June 25, 2008 Contents 1. Introduction ................................................................................................................ 2 2. Steps to Creating Locally Serving Businesses.............................................................. 3 3. Police Power Options .................................................................................................. 6 3.1 Existing Zoning Tools ........................................................................................... 6 Use existing districts (S/C/I and NC) ........................................................................... 6 Expand and modify the S/C/I and NC Zone Districts .................................................. 6 Tailored Use Lists ........................................................................................................ 7 Local Serving Zoning District ....................................................................................... 8 Basic Size Restrictions ................................................................................................. 8 Discretionary Review .................................................................................................. 9 Reduce the amount of land zoned for HECU space .................................................... 9 Prohibit Offices in Basements or Pedestrian Malls .................................................. 1 0 Height / floor area bonus .......................................................................................... 10 3.2 Use Quota ......................................................................................................... 10 3.3 Mitigation .......................................................................................................... 11 3.4 Fee in Lieu ......................................................................................................... 13 3.5 Growth Management Quota System (GMQS) Scoring ..................................... 14 3.6 Ratio based program ......................................................................................... 14 3.7 Commercial Rent Control.................................................................................. 15 4 Fiscal or Public-Private Partnership Tools ................................................................. 15 4.1 Community Enterprise ...................................................................................... 15 4.2 Excise Tax .......................................................................................................... 20 4.3 Succession Planning / Proactive Redevelopment ............................................. 21 4.4 Economic Development Director or Building Staff Capacity ............................ 22 4.6 Development agreements ................................................................................ 26 Conclusions ....................................................................................................................... 27 Appendix A: Regulatory Approaches ................................................................................ 28 Appendix B: Palm Beach, FL Town-Serving Commercial Regulations .............................. 31 Endnotes ........................................................................................................................... 41 P12 II. City of Aspen | Commercial Mix Strategies June 25, 2008 1. Introduction The City of Aspen is seeking ways to encourage a sustainable mix of businesses in the community. In recent years, rising land costs and market conditions have squeezed many of the City's locally serving businesses, along with businesses that create the unique character and flavor of Aspen's commercial core. As land costs rise and demographics change, businesses that cater to a luxury market or similar, high end businesses can outbid locally serving businesses for limited space. The City fears that this could: 1. Drive businesses that provide day to day goods and services to more affordable locations downvalley; and 2. Replace the "messy vitality" of the City's existing core with a monoculture of luxury businesses; and 3. Undermine the traditional energy of the City's downtown core with less active businesses - such as a storefront that provides an address, but few retail goods that generate pedestrian activity along the street; and 4. Crowd out businesses that cater to the City's existing permanent population with those that provide goods and services that are largely within the exclusive reach of its more affluent visitors. While other communities have struggled with the issue of commercial mix, there are surprisingly few good examples. While many communities around the nation have dealt with an influx of retail chains through "formula-based" ordinances, few local governments have developed programs that are designed to keep commercial or retail businesses affordable to local residents, and fewer still have programs that are targeted to character-based businesses. Land use regulations that are targeted to affordable retail or retail gentrification are rare. Some cities have developed "use quota" systems or neighborhood commercial approaches that are offer loose This report uses several unique terms: Locally Serving Business refers to establishments that provide products that meet the day to day needs of City residents. These include groceries, medicine, clothing, and similar items. Several businesses, such as Carl’s, currently provide some of these products. Otherwise, residents must commute or order them online. Character Based Business means an establishment that contributes to the City’s unique character, and that has traditionally attracted a local clientele. The Red Onion is an example of this type of business. For brevity, this report refers to locally serving and character based businesses collectively as “LSB.” High End Commercial Uses (HECUs) are those that offer a limited product line that caters principally to an upper income or a tourist oriented customer base. These can include high-end, designer clothing stores, jewelry stores, art galleries, and similar establishments. P13 II. City of Aspen | Commercial Mix Strategies June 25, 2008 parallels to what Aspen is trying to achieve. The City planning staff and consultants have summarized these approaches in prior correspondence to the City. The City of Aspen recognizes that a combination of approaches is appropriate. While no other jurisdiction that has addressed this issue is facing the same issues, or the same type of market conditions, there are pieces of each approach that could apply to Aspen. This memo summarizes the research we have collected. This involved a review of over 506 studies, reports, articles and other secondary sources, internet and Westlaw court case searches, and desktop searches of the White & Smith, LLC digital library of 42,000 local code and planning documents. Specifically, this report focuses on tools that involve not only mitigation, but also on direct public-private partnerships or financial assistance. 2. Steps to Creating Locally Serving Businesses Any program the City chooses to establish will involve the following logistical issues: 1. Creating or Preserving Space – how do we create space that is available for businesses that provide day to day goods or a unique, local flavor? How do we attract businesses to those spaces? 2. Institution/Staffing - who administers the program? Is the agency independent, quasi-independent, or an arm of the local government? 3. Beneficiary selection - how does the agency choose businesses that participate in the program? If program resources are limited, how does the agency choose one business over another? What are the criteria? 4. Oversight - how does the agency monitor a business' compliance with program criteria? To address these logistical issues, each approach will require the City (or other participating entities) to create an administrative program. Because provide LSB space through regulations or public initiative is a unique issue with little precedent, it will evolve over time. An example is the City and County’s pioneering employee housing mitigation program. There were few examples of how this works when the City initially established the program. The program is now a complete system with land use regulations and public initiatives that create space for employee residences, and a program to oversee how the units are occupied and maintained. A similar system is needed to ensure that LSBs are created, occupied by appropriate business entities, and maintained as a LSB over time. This involves the following steps: P14 II. City of Aspen | Commercial Mix Strategies June 25, 2008 1 Define “locally serving business” Define what locally serving retail (LSR) means in Aspen. The definition could reference the size, nature, or product line of the business. 2 Draft code amendments If the program involves an exercise of the City’s police or taxing powers, such as a mitigation requirement, the program will require changes to the Land Use Code or the general code. A program that involves a taxing power (such as an excise tax for new construction) may also require voter approval in advance of the tax. 3 Create administrative agencies Any concerted effort to create LSBs will involve a significant commitment of staff resources. The City could either add new staff to existing departments, or create an economic development agency that administers the creation and oversees or inspects the ongoing operations of the LSB. The agency could also assist with incentives for creating or maintaining the space. 4 Administration This involves a number of tasks: (1) Day to day permitting activities that apply the code or program. (2) Administering the new space or money collected. The City could seek external programs (State/Federal) that encourage LSBs. The money could also support a planning project that creates an LSB overlay district that eases restrictions or that pays City regulatory and impact fees. 5 Enforcement When the LSB space is created, it will constantly update its management and inventory. Regardless of the type of business, the product line will include a variety of goods and services at various prices. As the product line changes, the business could evolve from one that originally catered to a local clientele, to one that begins to serve a luxury or tourist oriented customer base. This could evolve slowly. For example, a clothing store could have a single rack with a more expensive set of designer items, and the balance of the store devoted to day to day sundries (such as t-shirts and underwear) or affordable apparel. This luxury items could provide a profit margin that subsidizes the lower margin on the locally serving items. As the business grows, it might start to allocate more rack space to designer clothing, eventually crowding out the locally serving items. At what point is the business no longer an LSB? What happens then? Does the City issue a notice of violation and shut down the business? Does it assess a penalty on the luxury items? Who inspects the allocation of rack space and sales of luxury P15 II. City of Aspen | Commercial Mix Strategies June 25, 2008 items, and how? These issues could become critical if the program is to have its intended result. Otherwise, new HECUs are approved or receive regulatory or financial incentives, while the community benefit eventually disappears. The regulatory, financial and public investment tools discussed in this report can create or reserve space, maintain the space as LSB over time, or both. They can also be classified as police power (regulatory) or financial or public-private partnerships (such as a City Economic Development Director who seeks out financial incentives for LSBs). The following table summarizes these techniques by their classification. These techniques are discussed in greater detail later in this report. A separate matrix summarizes the advantages and disadvantages of these techniques. Technique Re g u l a t o r y Fi n a n c i a l / Pu b l i c Pa r t i c i p a t i o n Pr o v i d e s o r Pr e s e r v e s S p a c e Ma i n t a i n s S p a c e Existing zoning tools* Use Quota Mitigation Fee in Lieu GMQS Scoring Ratio based program Commercial Rent Control Community enterprises Excise Tax Succession Planning / Proactive Redevelopment Economic Development Director Direct financial incentives Build staff capacity Development agreements * This includes using or expanding the S/C/I or NC districts, refining the list of permitted and conditional uses, creating a Local Serving Zoning District, establishing size restrictions, discretionary review, downzoning, prohibiting offices in basements or pedestrian malls, and establishing a height or floor area bonus for providing LSB space. P16 II. City of Aspen | Commercial Mix Strategies June 25, 2008 3. Police Power Options 3.1 Existing Zoning Tools The tools discussed below rely on the use of conventional zoning tools for LSB space. Generally, these tools involve the fewest changes to the City’s existing regulatory system, and the least aggressive approaches in terms of new forms of regulation or financial impacts. (A notable exception is downzoning). Use existing districts (S/C/I and NC) The City’s existing Service/Commercial/Industrial (S/C/I) and Neighborhood Commercial (NC) districts are already designed to encourage locally serving uses. S/C/I is designed to accommodate employment based uses rather than the types of LSB uses discussed in this report. Most uses limit retail uses to 25% of floor area. Commercial uses are limited to a maximum FAR of 1.5:1 out of an overall FAR of 1.5:1. The NC district allows “neighborhood commercial” and service oriented uses, and is specifically designed to “accommodate the commercial uses serving the daily or frequent needs of the surrounding neighborhood.” Commercial uses are limited to a maximum FAR of 1:1 out of an overall FAR of 1.5:1. The advantage of these districts is that they have worked well, are a familiar technique, and accommodate LSB space where it is needed. The City would continue to use these districts to provide LSB space if it believes that the current amount of LSB space is appropriate and will continue into the future under the current mix of district regulations. However, the uses in these districts are not restricted to LSB space. There is nothing in the standards that require space to accommodate the needs of local residents. In addition, the permitted uses also accommodate a number of uses, such as office space, that could supplant LSB space without providing local goods and services. Expand and modify the S/C/I and NC Zone Districts This alternative expands the S/C/I and NC Zone Districts by rezoning some areas from existing zoning categories to S/C/I and NC. As an alternative, the City could modify the district standards to include specific references to LSB businesses, such as grocers, pharmacies, and similar uses. The district regulations could reserve a minimum FAR for LSB uses or cap FAR that is devoted to HECU space. P17 II. City of Aspen | Commercial Mix Strategies June 25, 2008 If the City believes that these districts currently work well in their current configuration, these types of modifications could significantly disrupt the current economic and neighborhood balance. In addition, any change in regulations would apply uniformly throughout the districts. This could expose some sites to development of LSB space where it is not appropriate, or will supplant space for other uses the City desires. Tailored Use Lists The list of permitted uses within each zoning district is typically very broad. For example, the NC district allows “retail and restaurant uses” and “neighborhood commercial uses” on all floors. The Land Use Code currently defines “neighborhood commercial” uses as follows (Land Use Code § 26.104.100): Commercial establishments engaged in the selling or renting of consumer goods and merchandise to the general public and the rendering of services incidental to the sale or rental of such products. Neighborhood commercial uses shall include retail uses (with the exception of restaurants and nightclubs and bars), post office branch, artist studio, commercial kitchen, bakery, food market, neighborhood café, broadcasting facility, movie theaters and the sale or rental of motorcycles, motor-drive cycles and motorized bicycles as defined by Section 42-1-102, C.R.S, nonmotorized vehicles such as bicycles, clothing, sporting goods, jewelry, books, videos, prescription drugs, liquor, hardware, furniture and art and similar uses and activities. While this definition embraces a number of specific uses, many of these uses guarantee that the business will furnish day to day goods and services. For example, a clothing store could provide only high end merchandise and still qualify as a clothing store. In addition, some uses – such as artist studios and jewelry stores – do not provide day to day sundries at all. Others, such as motorcycle sales, might not be appropriate in a neighborhood setting. The City could revise the list of permitted uses the NC and other commercial zoning districts to exclude uses that are too numerous or that are not locally serving. This breaks the broad uses into specific use categories. This has the advantage of more carefully calibrating the uses in each district to their intended function. The City can then develop FAR allocations or growth management incentives that tie directly to the newly defined uses. A comprehensive revision of permitted uses is also a major zoning update that could involve significantly more work than the City is looking for with this project. Opening a P18 II. City of Aspen | Commercial Mix Strategies June 25, 2008 debate on the list of permitted uses becomes an extensive zoning update. This is a worthy task, but beyond the narrow scope of this project. Local Serving Zoning District Instead of completely revamping the S/C/U or NC districts, this option involves a new district that is geared to LSBs specifically. It could be a base district, or an overlay district that has the same dimensional standards as the S/C/I or NC but a narrower range of uses that are locally serving. The City could also tie LSB requirements to size, type of use, or similar factors. An example of an LSB district is the City of Palm Beach, Florida’s “C-TS” town-serving commercial district. This district classifies all commercial uses over 2,000 square feet as a special exception, and requires to demonstrate that they are “town-serving.” This district, originally adopted in 1974, survived a court challenge in 1991 by an applicant who attempted to convert an existing 7,000 square foot restaurant to a chain clothing store. The court upheld the Town’s determination that the use would not be town serving, and rejected a takings challenge.1 In conversations with the Palm Beach planning staff, the applicants demonstrate that a use is town serving by having an accountant or similar professional certify this in the application. The town serving requirement is time consuming - they require an annual report at the time the applicant renews its business tax license. A CPA certifies that they have reviewed the documents and determined that a percent of business is derived from townspeople (defined as residents, etc.). Of 2100 businesses on the island, about 100 have to provide the report annually. Their staff indicates that no enforcement actions have been brought, and that review of the submittal is cursory. Palm Beach’s restriction is a district that is tailored to those that are locally-serving, and also uses size restrictions and discretionary review (discussed below). Basic Size Restrictions A size restriction would limit the size of commercial uses, on the theory that smaller uses are more likely than larger uses to be locally serving. This could be tied to a requirement that uses that exceed the threshold demonstrate they are locally serving (as in Palm Beach, discussed above), or reserve a designated amount of space for LSBs. A fundamental problem with this approach is the lack of evidence that smaller uses are, in fact, locally serving. Our anecdotal observations are that the opposite is true. Smaller spaces can provide storefronts for luxury goods, while many types of LSBs – P19 II. City of Aspen | Commercial Mix Strategies June 25, 2008 such as grocers – often demand larger floorplates and larger sites for delivery, loading, parking and display than, for example, a small jeweler or designer clothing storefront. Discretionary Review This technique apply conditional use review to designated uses (e.g., luxury clothing or jewelry stores), or uses that exceed a designated FAR threshold. The criteria could range from a requirement that the applicant demonstrate that they are locally serving (as in Palm Beach, above) to more flexible standards such as a point system. This approach has been used in other places, but usually on a case by case basis for larger scale projects rather than as part of a uniform set of criteria. For example, the developer of the Upper Rock district In Rockville, Maryland converted an existing suburban business park into a mixed-use neighborhood. The project includes 844 residential units at moderate prices, two office buildings and a small amount of retail. This includes an 8,000 square foot market center designed to offer relatively cheap space for startup businesses. This approach could yield results, but is unpredictable. It could require several applicants to shoulder a larger community need. It also relies on applicants and the city to negotiate conditions of approval that are fair and effective. Staff reports that the City has required LSB conditions in the past. However, they are not common today. Reduce the amount of land zoned for HECU space As with S/C/I and NC, the CC and C-1 districts also accommodate retail and “neighborhood commercial” space. As with those districts, HECUs are also permitted on space that could otherwise accommodate LSBs. These are the locations that absorb most of the City’s HECU spaces. The City could rezone these areas to alternative districts – either to NC or to a new, LSB district. An applicant who wishes to establish and HECU would need to rezone to accommodate the use. Mitigation of impacts on LSB space needs could be addressed as a condition of rezoning. This approach requires downzoning, which is potentially controversial. In addition, many of the HECU uses currently permitted are not necessarily inappropriate in these locations. The real problem is the monoculture effect, where the aggregation of these uses crowds out LSBs. Eliminating HECUs entirely could excessive in relation to the problem, and could invite litigation. The City could address this situation by allowing nonconforming HECUs to continue or expand. However, there are more flexible tools to address the problem than a downzoning. P20 II. City of Aspen | Commercial Mix Strategies June 25, 2008 Prohibit Offices in Basements or Pedestrian Malls Offices are currently prohibited on the first floor in the CC district. This allows offices in basements or second floors. LSBs are appropriate locations for basements or pedestrian malls. Prohibiting offices in these locations eliminates absorption of these spaces by at least one form of HECU. The disadvantage of this technique is similar to that of the zoning techniques discussed above, because it does not proactively ensure that LSBs will occupy the space. It also further limits office locations, which already compete with housing for space. Height / floor area bonus Intensity (height, floor area) bonuses are a common way to incentivize public amenities. The concept could also apply to LSB space. For example, Overlake Village in Redmond, Washington has created a neighborhood-scale retail center. A focus of the commercial development was to encourage small, local businesses to remain in the neighborhood. In order to promote this, the city developed a plan that provides an incentive for developers in the form of additional floor area and building height to incorporate a percentage of ground floor retail space at or below market rate in order to provide affordable retail space for small, local businesses in the area. The incentive program also allows for a wider range of commercial uses as a bonus for provision of certain public amenities. Adding floor area entitlements could conflict with the City’s overall growth management and carrying capacity policies. Height limits are a important issue to City residents. If the City pursues this approach, the policy trade-off should be clear from the outset – that the gain in LSB space is worth the additional height. 3.2 Use Quota This technique limits the number of designated uses that are permitted in a district. It strikes a compromise between allowing those uses without limitation and banning them completely. By reserving spaces for other uses, it increases the likelihood that the district will truly reflect a mix of uses, rather than a single use that happens to command the highest rents at a particular point in time. Use quotas have been used successfully by other communities, such as Berkeley, California. As with restricting office space, the technique does not ensure that LSB’s will occupy the space that is not available to HECUs. However, it does allow the City to more closely calibrate its zoning districts to the desire mix of uses than does conventional zoning. P21 II. City of Aspen | Commercial Mix Strategies June 25, 2008 3.3 Mitigation Mitigation relies on developer contributions to mitigate their impacts on the City's commercial mix. This is similar in concept to the City and County's employee housing mitigation program. The employee housing mitigation program calculates the number of employees generated by new development, and requires applicants to provide housing to mitigate the demand that this creates. Similarly, a locally serving business or commercial mix mitigation program would require applicants to mitigate their impacts on locally serving retail by providing affordable space. The applicant could provide the space onsite, or through a contribution (such as a fee in lieu) to provide the space at another location. This discussion assumes that the property owner would mitigate by providing space onsite. No local governments have used this approach to date for local retail. Therefore, Aspen will pave new ground if it opts for a mitigation approach. In addition, if locally serving retail space is allowed to remain under the developer's control or ownership, it is not clear how courts would characterize this approach. However, there are general principles involved in computing mitigation requirements that the City should follow in order to ensure that the mitigation is equitable and legally defensible. These suggest a number of steps to create a defensible mitigation system. These steps are: 1 Document how LSB and HECU space has changed over time The City has engaged a local business person and a real estate broker to track business activity over time along with changes in commercial real estate in the City. The studies will assess the changes in commercial lease rates and land use mix over time, along with the factors that contributed to these changes. These studies should document how luxury businesses contribute to the decline in LSBs, and provide a basis for a predictive model that ties increases in luxury businesses to changes in LSB space. 2 Prepare a nexus study This requires the following subtasks: (1) Document that new development creates a need for and benefits from locally serving goods and services and. This establishes the “nexus" between new HECU space and the demand it creates for locally serving retail. This study could use applicable industry literature (i.e., how local retail "follows rooftops") coupled with some local data such as building permits for residential, HECU and LSB space, sales tax trends, trend in lease rates and land costs, etc. P22 II. City of Aspen | Commercial Mix Strategies June 25, 2008 (2) Document that the mitigation requirements are proportionate to the demand created by the proposed development. This includes how much LSR is needed to serve unit of residential or commercial, non-LSR development. This leads to an important limitation of mitigation. While new development or uses may increase the amount of LSB space needed, there is probably an existing need for LSB space. The City cannot require developers to correct this existing “deficiency” of LSB space. Developers can voluntarily do this (as with development agreements) and can provide surplus space as an incentive item. However, the City cannot require mitigation for deficiencies, but instead is limited to the marginal increment of space required by new growth. (3) Document the economic impact of the regulations on new development. If the economic impact is too severe, the City may consider either reducing the mitigation amount or softening the regulatory impact with incentives, additional height or FAR, or similar compensatory measures. 3 Draft code amendments The Land Use Code would be amended to require mitigation, set up reporting and monitoring requirements, and provide for inspection and enforcement. 4 Administration This involves a number of tasks: (1) Day to day permitting activities that apply the code. Staff, the Planning Commission, or City Council must determine whether a business is locally serving or not, assess the mitigation requirement, and ensure that it is delivered. (2) Revenue collected: The City must decide what to do with the new space (or, if an in lieu fee is allowed, money collected). The space can remain under the ownership and control of the applicant, subject to inspection by the City, dedicated to the City or an agency designated in the Land Use Code, established as a community enterprise (see discussion in Part 4.1 Community Enterprise, below), or provided as part P23 II. City of Aspen | Commercial Mix Strategies June 25, 2008 of an ongoing community enterprise. 5 Enforcement The program should include procedures for inspecting and monitoring space provided through mitigation to determine whether it remains locally serving. Because the retail sector constantly turns over its inventory, this is a difficult task because the City will need to set product types or price levels and percentage of stock requirements (or similar metrics) to determine whether the space is considered an LSB. The City could rely on the existing enforcement mechanisms in the Land Use Code to enforce violations, or consider additional standards such as a penalty for merchandise above the trigger level that is not considered locally serving. 3.4 Fee in Lieu The space provided by an HECU onsite might not work for an LSB enterprise. Because lots and parcels in Aspen are small and FAR is restricted, the space available for an LSB might be too small to operate the business, provide for delivery and loading, accommodate parking and to maintain and display inventory. This makes it difficult for the HECU to find the right tenants and, if they are available, to allow for the success of the ongoing operation. The tight spaces could also create conflicts with the HECU’s operations. In addition, because nexus studies are not completed, it is unclear how much space is actually needed for LSBs at this point. If the amount of space needed Citywide is small but individual operations require more space than an HECU applicant can offer, and onsite mitigation requirement could simply result in a proliferation of small spaces that exceed the City’s aggregate space needs but, individually, cannot meet the needs of future retailers. This type of situation is common with park land dedications. In most communities, each new subdivision creates a need for an increment of park space. However, the individual space a subdivision can provide is sometimes too small to provide the recreational or open space functions for new parkland, or to be effectively maintained. Most communities allow the subdivider to pay a fee in lieu of providing the space. This provides funding for the community to establish space with sufficient land and at a location where it is workable. The same is true for LSB mitigation. A small area in the back of an HECU might not provide space for an LSB to operate. However, a larger space at a better location could make it easier to find the right tenants, that they remain successful, and that they are able to deliver the types of products that the community is looking for with program. P24 II. City of Aspen | Commercial Mix Strategies June 25, 2008 3.5 Growth Management Quota System (GMQS) Scoring In 2007, the City moved from a mechanical growth management system to one that ranks projects based on community objectives. This encourages projects to incorporate features that coordinate with the City's goals and objectives for new development, and allows preferred projects to move through the process quicker. The City could add LSB projects, or those that include LSB space or mitigation, to the ranking system. This is a powerful incentive for development, and could encourage businesses to work out creative solutions to mitigation and the City's LSB needs before applications are submitted. 3.6 Ratio based program Based on the City's ongoing studies of its commercial mix over time, the City would develop an optimum mix of LSB to HECU or unrestricted commercial development. Using its growth management powers, it would then develop a "carrying capacity" for HECU or unrestricted commercial space based on the amount of LSB space. This is similar to an "adequate public facilities ordinance" (APFO) or "concurrency" program, where a community develops a level of service (LOS) for infrastructure and then ties new development approval to the availability of infrastructure. The community typically develops a capital improvements program that shows when infrastructure will become available and how it is financed. While an APFO does not require new development to pay a fee or to mitigate, it must wait until infrastructure is available for proceeding. Many programs give developers the option to mitigate by accelerating the construction of improvements, and thereby moving through the process faster. In a similar vein, a ratio based program would compute how much new unrestricted commercial development (including, or limited to, HECU space) the City can accommodate based on its existing LSB inventory. The City would also develop a long term plan to provide LSB space through public-private partnerships, using the tools discussed on Chapter 4, below. If insufficient LSB space is available, the applicant has the option to scale back its proposed floor area to fall within the identified carrying capacity, or to wait until LSB space is provided. If the applicant does not want to scale back or or await the construction of LSB space, it can mitigate by providing space in kind or paying a fee in lieu of mitigation in order to accelerate the program. This program has the advantages of flexibility (because developers have different ways to comply) and defensibility, as it is tied directly to the community's goals and objectives for commercial mix. However, it is quite unusual in the context of community benefits P25 II. City of Aspen | Commercial Mix Strategies June 25, 2008 other than infrastructure, and would also require a significant amount of study to develop the appropriate numbers and metrics for the system. 3.7 Commercial Rent Control Commercial rent control directly limits the rent levels that landlords can charge for commercial space. While residential rent control is an established technique in other states (other than Colorado, where it is prohibited), commercial rent control is rare. It has been tried in New York City and Berkeley, California. In Berkeley, the program was invalidated by a federal district court, and the City later replaced the program with a system of use quotas. Rent control would make space more affordable to LSB tenants. However, taken alone, rent control would not ensure that affordable space is occupied by LSB tenants. Commercial rent control would rely on LSB tenants to seek out affordable space in the marketplace. 4 Fiscal or Public-Private Partnership Tools 4.1 Community Enterprise Community enterprises involve direct investment in and ownership of the enterprise by the affected community. A notable example is the National Football League's Green Bay Packers. The Packers are a business corporation2 whose shares are publicly traded and owned principally by its fans. The entity is a publicly owned, non-profit corporation with 4,750,934 shares of stock that are owned by 112,015 stockholders. Stock shares include voting rights, but the redemption price is minimal. Stock does not pay dividends, does not appreciate in value, and does not carry season ticket privileges. The articles of incorporation prohibit any person from owning more than 200,000 shares.3 This arrangement keeps the team under the control of its fans, rather than a unified ownership entity. This type of cooperative arrangement can also apply to locally serving businesses. Citizens in several western states have banded together to open community owned stores in response to the closing of existing stores, to fill the local shopping needs of residents. Others, such as the Willey Street Co-op in Madison, Wisconsin, simply provide food at affordable prices to its owners. The Willey Street Co-op has operated for 35 years in a traditional, compact neighborhood where most customers arrive on foot or bicycle. Others, such as the Powell Mercantile in Powell, Wyoming, were a response to an urgent community need for basic goods and services in a rural location. P26 II. City of Aspen | Commercial Mix Strategies June 25, 2008 Local residents become shareholders, meet periodically to vote on store issues, provide local civic and business leaders who oversee the community store, and forego dividends and appreciation in exchange for providing a community asset. These stores can provide a variety of products, such as clothing, shoes, furniture, and household items. There are many ways to structure a community enterprise:4 Consumer cooperatives A cooperative is an enterprise that is owned by its members (such as retail merchants), where each member has an equal say in decisionmaking and receives a share of any profits generated.5 The International Cooperative Association (ICA) defines a cooperative as an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.6 A cooperative operates under 7 general principles: 1. Voluntary, Open Membership: Open to all without gender, social, racial, political, or religious discrimination. 2. Democratic Member Control: One member, one vote. 3. Member Economic Participation: Members contribute equitably to, and democratically control, the capital of the cooperative. The economic benefits of a cooperative operation are returned to the members, reinvested in the co-op, or used to provide member services. 4. Autonomy and Independence: Cooperatives are autonomous, self-help organizations controlled by their members. 5. Education, Training and Information: Cooperatives provide education and training for members so they can contribute effectively to the development of their cooperatives. They inform the general public about the nature and benefits of cooperation. 6. Cooperation Among Cooperatives: Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, regional, national and international structures. 7. Concern For The Community: While focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.7 A cooperative allows independent businesses to remain competitive with national retailers by giving small merchants greater purchasing power allowing them to lower the cost of P27 II. City of Aspen | Commercial Mix Strategies June 25, 2008 goods through volume buying and purchasing. Coops are often able to negotiate directly with manufacturers. Coops can also provide additional advantages to independent businesses including national advertising, brand identity, expert marketing and business advice. These have a long history in food retailing. A consumer cooperative is distinguishable from a membership cooperative. Membership coops include hardware alliances and grocery alliances such as the Independent Grocers Alliance (IGA). Coop members can vary widely in their operations and can individually tailor their own inventory. Independent retailers can form trade associations to cooperatively market, purchase, and engage in other joint ventures. One example in Boulder, Colorado is the Boulder Independent Business Alliance that was created in 1998 and now represents more than 125 businesses in the City. The role of the alliance is to represent independent businesses in public policy, promote members through joint advertising, and marketing, member to member discounts such as reduced rates on advertising though locally run media outlets, and future benefits such as pooled insurance programs and the formation of a community investment fund. Community Owned Business Under this option, the community provides start-up capital for a business that is owned and operated by a local entrepreneur. For example, local residents could capitalize a business, with modest interest rates or discounts. Community Corporations These are capitalized through stock shares sold to local residents. The bylaws typically stipulate that stockholders must live in the state. Community corporations are run by an elected board of directors. Investors generally seek community benefits rather than financial gains. Owner Occupancy by Private Corporations or Individuals Local retailers can ensure a stable location at a reasonable price if they buy their building or store. Cities can encourage this through property tax or income tax incentives, or low-interest loan funds dedicated to small business owners. Commercial Land Trusts (CLTs) A commercial land trust (CLT) borrows from the community land trust concept that has been applied to affordable housing. In the context of affordable housing, a land trust is a private non-profit corporation created to acquire and hold land for the benefit of a P28 II. City of Aspen | Commercial Mix Strategies June 25, 2008 community and provide secure affordable access to land and housing for community residents.8 A CLT can effectively establish and maintain affordable housing and the same model could be used for commercial buildings with the requirement that buyers or lessees be independent businesses. Commercial Land Trusts are funded mostly by CDBG funds. Publicly Owned Space The city itself could buy a commercial building and contract for its management with the stipulation that the space be leased only to businesses that serve community needs. Rents should be stable and below market. Identify Spill-Over Space The City can identify underutilized commercial districts and focus revitalization efforts there to make the district a viable location for local stores.9 Most of these enterprises are the product of local, private civic cooperation. These efforts do not typically involve local government. However, the City could play a role by becoming a shareholder, providing space, writing down land costs, offering grants or low-interest loans, or otherwise offsetting startup and maintenance costs. It could also provide matching grants or investments – for example, a pledge to buy a given number of shares for every designated increment of shares that are sold on the open market. The City could also establish an economic development department or dedicated staff to assist with ongoing management. A community enterprise raises a number of institutional and operational issues. These include: Ownership - many cooperatives assign a vote to each share. Others offer shares in blocks or other arrangements in an attempt to expand the sale of shares.10 Most cooperatives control either the absolute number or percent of shares that an individual investor can hold. Share Price. Higher prices yield more startup revenue if the market can support it, while lower prices could attract more investors. Most community owned cooperatives have priced their shares $100-500. The Willey Street Co-op prices its shares at $56, and allows this amount to be paid over time. It relies principally on product sales for ongoing revenues. Benefits of Ownership. Most community owned stores limit or deny dividends and price appreciation for shareholders because the investment is seen as a civic benefit. This also limits decisions that are motivated by solely by profit rather than the wider P29 II. City of Aspen | Commercial Mix Strategies June 25, 2008 public interest. Instead, ownership provides voting rights and access to information, such as newsletters. Shareholder Location. A cooperative could limit the sale of shares to local residents, in order to ensure that the operation and management is consistent with local needs. However, most community owned cooperatives have sold their shares on a statewide basis, which expands the universe of investors. Management. With most community owned stores, management is selected by shareholders. The following table summarizes the characteristics of several community owned businesses that provide locally serving products: Business Location Population (2000) Products Started Structure Own or Rent? Annual Sales Employees Store size Little Muddy Dry Goods, LLC Plentywood, MT 2,061 Clothing, yarn, bedding, shoes, gift items, jewelry 1999 LLC managed by members rent $240,000 5 6,000 Orono Community Pharmacy Orono, ME 9,112 Pharmacy 1999 Business Corporation Own (initially rented) 5 5,500 Powell Mercantile (the "Merc") Powell, WY 5,373 Department store 2001 Profit Corporation Own (initially rented) $560,000 10-11 7,500 Garnet Mercantile Ely, NV 4,041 Department store, furniture 2004 Corporation Own 7 10,000 Washakie Wear Worland, WY 5,250 Clothing 2002 Profit Corporation 12,000 P30 II. City of Aspen | Commercial Mix Strategies June 25, 2008 Business Location Population (2000) Products Started Structure Own or Rent? Annual Sales Employees Store size Willey Street Co- op Madison, WI 208,054 Groceries, sundries 1973 Membership Cooperative Own $17M 150 9,500 sf retail, 21,000 sf with basement and back room. 3,000 sf kitchen (production) facility offsite. Figure 1 Willey Street Co-op (Madison, Wisconsin) 4.2 Excise Tax An excise tax is a tax that is imposed on the performance of an act, engaging in an occupation, or enjoyment of a privilege.11 Unlike exactions, excise taxes are not subject to constitutional requirements governing nexus and proportionality.12 Other cities, such as Boulder, have used housing excise tax to fund non-infrastructure public needs such as affordable housing.13 This approach was chosen for several reasons. First, the City wished to abandon on-site mitigation and to spread the responsibility for housing P31 II. City of Aspen | Commercial Mix Strategies June 25, 2008 needs more equitably between the residential and non-residential sectors. Second, the excise tax is not subject to the rational nexus test applied to impact fees such as housing linkage fees. This has the following advantages: monies collected need not be earmarked the amount of the fee need not relate specifically to the needs created by, or the benefit accruing to, a particular development or class of development the "facilities" (in this case, LSBs), are not subject to spatial or temporal nexus requirements.14 In other words, the City can set an excise tax at any amount that is justifiable politically, subject to applicable restrictions imposed by the state constitution or state statutes. The City does not have to demonstrate that new development creates a need for the programs that are financed through the excise tax, or that the amount of the tax is proportionate to the impacts of the development. This gives the City considerable flexibility in setting the tax amount. An excise tax probably requires voter approval under Article X, Section 20 of the Colorado Constitution (TABOR amendment). By avoiding the nexus requirements, the City could collect the revenues needed to meet the deeper subsidies required for locally serving products, as opposed to a higher end product line.15 The linkage fee/excise tax approach provides for flexibility in the use of funds and the ability to target funds for community serving businesses. 4.3 Succession Planning / Proactive Redevelopment Succession planning is not a discrete technique, but rather a way that the City can target is use of resources for LSBs. Once the City collects funds or negotiates agreements to provide LSB space, the City could either attempt to put new businesses in new space, or find new owners or operators for existing businesses that are at risk due to the retirement, insolvency, or relocation of its owners. In addition, the City could simply use staff resources or partner with the private sector to find new persons or entities to take over a private concern.1 Under the succession planning approach, the City would target current businesses for financial incentives that maintain the business as an ongoing entity when its current ownership or management turns over. This may involve the City entering into partnerships to either buy or lease space, or otherwise provide financial incentives to ensure the ongoing success of an existing enterprise. 1 Note: this discussion does not suggest that the City is considering ways to replace owners who are interesting in retaining their existing businesses. P32 II. City of Aspen | Commercial Mix Strategies June 25, 2008 The City could also use redevelopment authority, such as an Urban Renewal Authority, to target areas for the establishment of LSBs. This is an unusual use of the urban renewal powers, which are typically used to clear sites for subsequent redevelopment. However, urban renewal and redevelopment includes more than just construction activities. An authority could consider the use of rehabilitation or conservation powers to offset costs and encourage the retention of ongoing businesses.16 4.4 Economic Development Director or Building Staff Capacity Under this approach, the City would retain staff to seek out and maintain business development opportunities for LSB enterprises. Staff would assist in seeking ownership and management opportunities, funding and financial incentives, and ensuring that the enterprises are consistent with the City's goals and objectives to encourage locally serving product lines. Other entities could also provide targeted efforts to encourage LSB. Examples are downtown development districts and business improvement districts. Most Downtown Development Authorities (DDA) do not deal specifically with the choosing of businesses and leave much of that to the discretion of the individual building owners or Economic Development Departments. Most DDA’s provide a primarily supportive role in downtown redevelopment. For instance, the Ann Arbor, Michigan DDA plays a role in the infrastructure of the downtown area and does not deal specifically with business related items. Ann Arbor DDA does serve as a support for the recently created, four Downtown Merchants Association which operate separately as commercial cooperatives. Another example of the low level of DDA participation in commercial activity is in Rochester, NY. Most downtown retail buildings in Rochester are individually owned, so the building owners choose which businesses locate there. The DDA encourages landlords to incorporate family friendly retail uses such as children’s clothing stores, toy stores and similar family oriented activities. The DDA holds focus groups throughout the year to gain an insight on the types of retail uses the community would like to see built in the downtown area. The DDA does provide assistance to retailers looking to locate in the City by finding appropriately sized spaces and locations while providing sign, lighting and façade grants. In Shreveport, LA, the DDA does not currently have space available that it promotes. It owns three properties and has leased those spaces to arts organizations to spur development of an arts district. It works with real estate brokers and individuals who are looking for support in searching for space. They act more as a resource center for prospective businesses interested in locating in downtown Shreveport. P33 II. City of Aspen | Commercial Mix Strategies June 25, 2008 Downtown Development Authorities City State Role of DDA Rochester NY Downtown properties are mostly individually owned. The building owner chooses businesses, but usually tries to select family friendly businesses. Focus groups throughout the year are held to hear citizen requests. Main stores include children’s clothing, toy stores, and family friendly activities. The DDA assists retailers in finding a suitably sized space and location, communicates the availability of signage, lighting and facade grants, and introduces the town to merchants. Businesses conduct forums and seminars to describe trends in the business community. Shreveport LA Does not have space currently available that they promote. They own three properties and have leased those spaces to arts organizations to spur development of an arts district. They work with real estate brokers and individuals who are looking for support in searching for space. They act more as a resource center for prospective businesses interested in locating in downtown Shreveport Ann Arbor MI The DDA plays a role in supporting infrastructure needs (such as streetscaping, alleys and parking) in the downtown area, but does not directly partner with businesses. Ann Arbor DDA does serve as a support for the recently created, four Downtown Merchants Associations which operate separately as commercial cooperatives. Ypsilanti AZ Downtown Development Authority provides support activities for business location. Fort Collins CO Downtown Development Authority does not participate in tenant selection which is decided by the landlords. 4.5 Direct financial incentives A significant obstacle to establishing an LSB is the cost of starting up and maintaining the business. The City could provide grants, low-interest loans, tax abatement, or use tax increment financing (TIF) to subsidize project infrastructure, direct ownership by the business entity of its space, start-up costs, or ongoing maintenance costs. In Gardiner, Maine, the City decided to revitalize its downtown with the use of community development grants to help restore downtown buildings that now house locally serving businesses. Additional funds were used to create a façade improvement program. $750,000 was used to create a revolving loan fund to help existing downtown businesses expand and new businesses open. P34 II. City of Aspen | Commercial Mix Strategies June 25, 2008 Examples of small business loan programs are included below. Jurisdiction Program Description & Selection Criteria Burbank, CA Downtown Tenant Assistance Program (DTAP) The DTAP program focuses on attracting retail businesses to underutilized and vacant properties downtown. Restaurant and office uses are excluded from the program. Assistance agreements are done on a case by case basis. Initial funding was $1.5 million dollars. DTAP selection Criteria • Boutique or specialty shops such as gift/collectibles, vintage clothing, retail clothing stores, art or music stores, community serving retail • Amount of private investment • Projected sales per square foot • Proven track record of operating a business successfully in a downtown environment, and meeting lease obligations • Commitment by the property owner to participate in downtown business and promotional activities • Commitment by the property owner to participate in a Property Based Business Improvement District (PBID) • The ability to operate a business without emphasizing “bargain basement pricing” • Discount or thrift stores are not eligible for this program • All retail tenants that participate in the DTAP are subject to approval by the Agency Pasadena, CA Redevelopment and sales tax rebates The City utilizes a traditional redevelopment tools to facilitate business attractions and expansion. The major program they utilize is the sales tax rebate program that was adopted by an ordinance in 1990 and was exclusively for auto dealers. The ordinance was amended in 1993 to broaden the program to include other sales tax generating “qualified businesses.” Assistance agreements are done on a case by case basis. Sales Tax Rebate Program Criteria • Applicants must generate at least $100,000 in net new sales tax dollars • Funds must be necessary for expansion of existing facilities or new developments • Total amount of sates tax rebate is determined on the merit of each case. A business that meets these criteria is subject to the following provisions: • Sales tax rebate is up to 50% of net new sales taxes generated above the base year. A cap on the amount rebated in a single year is common, but not a mandated feature of the program • Term of agreement is up to ten years or, the full reimbursement of costs incurred for the construction project, whichever comes first • The City only rebates the funds after verification that the sales tax proceeds have been generated • Additional conditions may be imposed based on the specifics of the project P35 II. City of Aspen | Commercial Mix Strategies June 25, 2008 The following table represents some other available loan programs to small businesses: Small Business Loan Programs City Loan Program Description San Francisco, CA Micro-Enterprise Loan Directed primarily at start-up businesses for borrowers who are low or moderate income. Micro-enterprise loans assist a sector normally avoided by traditional institutions. They are available up to $25,000 and must involve the creation of at least one full time job. Loan applicants must participate in a self-employment and entrepreneurship development program to be eligible for the loan. Loan recipients must participate in follow up programs for the duration of the loan. A micro enterprise business is defined as a business with five or fewer employees. San Francisco, CA Small Business Revolving Loan Provides existing small businesses with loans that can be used for a number of purposes, including working capital, equipment purchase, and other business expansion activities. Loans are available up to $100,000. A goal is to create employment opportunities for low and moderate income persons. Interested small businesses may apply for this loan fund through neighborhood economic development and non-profit organizations that provide loan packaging services and other assistance to small business persons. Oak Park, IL Commercial Loan Program Applicants can qualify for privately-funded, 2.5 points below Prime Rate loans to acquire and or/rehab commercial properties in Oak Park. The Oak Park Development Corporation (OPDC)17 works closely with developers to meet specific needs. Oak Park, IL Micro Loan Program Offers prime rate loans to areas small and start-up businesses to finance fixed assets, inventory and working capital. Funding is available to repair or rehab property. Loans may not be used by non-profits, home based business or acquisition of real estate. Loans can range in size from $2,000 to $75,000. P36 II. City of Aspen | Commercial Mix Strategies June 25, 2008 Small Business Loan Programs City Loan Program Description Oak Park, IL Retail Support Grant Promotes and facilitates the location of new retail businesses and the retention and expansion of existing retail businesses. Provides matching grant funding for retail businesses for interior build out or renovation of existing or newly leased space, including replacement/installation of building systems, demolition, installation or permanent fixtures. This program is administered by the Village of Oak Park. Montgomery County, MD Small Business Revolving Loan Program Provides financing for business development/expansions of small business located in the County. To qualify, the business must have gross revenues of less than $5,000,000 annually and have less than 75 employees. The program facilitates business development through direct loans and participation in loans made by banks, development corporations and other lenders. The program intends to leverage private sector as well as other governmental funds. The average size of the program assistance is $5,000 to $100,000 with a maximum term up to 5 years. Collateral is required. Montgomery County, MD Micro Enterprise Loan Program Available only to companies and small businesses with annual revenues of $250,000 or less and five employees. Maximum loan amount of $15,000 with terms of three years or less. Loans must be used to start, expand or stabilize a business. Special consideration is given to women and minority owned businesses. Redmond, WA Heritage Grant Program Promotes and encourages continued maintenance and prevent deterioration of historic structures or sites that conveys a sense of the City's heritage and a sense of place. 4.6 Development agreements Colorado’s vested rights statute provides a useful framework for negotiating mitigation conditions. Under the statute, the local government approves a “site-specific development plan” (SSDP), which is typically a form of discretionary approval such as a PUD or a conditional use permit.18 The developer obtains vested rights for a period of three years, and becomes subject to the terms of the plan. Through development agreements, developers may obtain a vesting period exceeding three years (CRS § 24- 68-104(2)). P37 II. City of Aspen | Commercial Mix Strategies June 25, 2008 Accordingly, the state’s site specific development plan legislation can be used as a basis to negotiate LSB conditions without triggering the nexus and proportionality requirements of a unilateral exaction. In return, the local government relinquishes the ability to impose new or different standards at a later point in the life of the development or the development approval process. Community Benefit Agreements allow a community to ensure that redevelopment projects and new retail centers include locally serving business by stipulating how much of the project’s retail space must be set aside for local businesses. The CBA is a legally enforceable contract signed by a community group and a developer. The agreement provides assurances about development outcomes, in return for the community’s support for the project. CBA’s can involve public subsidies, but are more commonly used by private developers to secure neighborhood support for a project or for a rezoning. 5. Conclusions The City of Aspen is discussing ways to encourage businesses that accommodate the day to day needs of its residents, and that add to its unique character. The City Council has discussed a mitigation approach that is similar to the City and County's current employee housing mitigation program. This is a creative, unique approach that could mitigate the demands of future development for locally serving space. It also raises a number of program development, administration and enforcement issues. This report summarizes those issues, and surveys other approaches that the City can consider. The City can use a number of regulatory, fiscal, and contracting (public-private partnership) tools to retain and establish LSBs. A number of these techniques have been used successfully in other communities. While there are few examples of regulatory techniques that encourage LSBs, other communities have used cooperative arrangements to retain businesses that meet their residents' day to day needs. However, few of these involve local government, where economic development efforts are normally targeted to employment generators. Despite the lack of precedent, the City can pull together the best of what has worked elsewhere, and craft a program that is suited to its market conditions, regulatory climate, and local needs. We hope that the City uses this memorandum to stimulate ideas as it continues this effort. P38 II. City of Aspen | Commercial Mix Strategies June 25, 2008 Appendix A: Regulatory Approaches Local Business Regulations City Retail Sales Description Code Site Carmel, CA No discount stores, manufacturers’ outlet stores, catalog stores, or stores devoting more than 15 percent to the sale of second-quality, irregular or discontinued merchandise or to the liquidation of merchants’ or manufacturers’ stock shall be established. All retail sales shall be conducted from within a fixed place of business. http://www.codepubli shing.com/CA/carmel. html Laguna Beach, CA The Local Business / Professional Zone and CN Zone is intended to serve needs of local residents. Principal activities are office/professional uses, service-oriented businesses, residential development and, secondarily, commercial retail functions. In addition, the zone is designed to preserve the existing residential character and scale of development. (Ord. 1134 § 2 (part), 1987). This zone is intended to serve the shopping and commercial service needs of local residents. Principal activities are commercial retail functions, service oriented businesses, office/professional uses, and limited residential uses. The commercial-neighborhood zone differs from the local business-professional zone in that it features a stricter orientation to resident-serving businesses and greater limitations on residential uses. (Ord. 1285 § 3 (part), 1994: Ord. 1147 § 2 (part), 1988). http://qcode.us/codes /lagunabeach/ Nantucket, MA No provisions for locally serving retail http://www.e- codes.generalcode.co m/codebook_framese t.asp?t=tc&p=0948%2 D139%2Ehtm&cn=575 &n=[1][210] Ketchum, ID No provision for locally serving business. Tourist District allows retail uses but limits the size of the floor area of the store to less than 2,500 sq. ft. http://www.ketchumi daho.org/index.asp?T ype=B_BASIC&SEC={4 B0C9095-1CBC-4ED7- AFC1- 604D27A04151}&DE={ 1A73BCA3-4E25-48E3- B979-23473EC4422C} Park City, UT HRC District allows for limited retail and commercial uses consistent with resort bed base and the needs of the local community. Size of allowed commercial retail uses, including restaurants must be less than 2,000 sq. ft then it will be considered an allowed use. Larger floor areas will deem the retail use as conditional. In the RC District Retail and Service Commercial, personal improvement are conditional uses as support use to primary development or Use, subject to provision of LMC Chapter 15-6, Master Planned Development. http://www.parkcity.o rg/government/codes andpolicies/municipal. html Santa Fe, NM No provision for locally sserving business http://70.168.205.112 /santafe_nm/lpext.dll ?f=templates&fn=site _main-j.htm&2.0 Saratoga Springs, NY NCUD Districts designed to encourge local retail by limiting size of floor space. Floor space ranges from less than 1,200 SF to 2,000 SF) http://www.saratoga- springs.org/docs/bpw ebsite.asp Whistler, BC CL1, 2 and 3 zones intended for smaller scale, neighborhodd oriented retail businesses. http://www.whistler.c a/images/stories/Byla ws/Website_Bylaw%2 0303_November2007. P39 II. City of Aspen | Commercial Mix Strategies June 25, 2008 Local Business Regulations City Retail Sales Description Code Site pdf Key West, FL Limited Commercial district(b) In order to manage the impacts of future development on transportation and public facilities, the city shall limit the intensity of development in the CL district to activities generating no more than 100 trips per 1,000 square feet of gross leasable floor area per day. Areas designated for residential and limited commercial development shall not accommodate large scale retail sales and trade activities generally serving a citywide or regional market. Such stores usually differ from limited commercial shops since the former generally require a larger floor area, carry a relatively larger inventory, and require a substantially greater off-street parking area.(c) Uses which are not accommodated within the limited commercial area include the following: large scale discount stores or supermarkets; department stores; wholesale and warehousing activities; sales, service or repair of motor vehicles, machine equipment or accessory parts, including tire and battery shops; automotive services centers; and fast food establishments primarily serving in disposable containers and/or providing drive-in or drive-through facilities. In addition, the CL designation shall not accommodate transient residential uses, including motels or hotels and conversions from permanent residential use to transient residential use. However, existing motels within CL designated areas shall be grandfathered as lawful nonconforming uses. Within the HRCC, HRCC-1, HRCC-2, and HRCC-3 districts (when the uses are permitted or conditional), the location of the following retail activities shall be governed by the criteria listed: Historic Districts: (1) Discount jewelry store. No discount jewelry store is permitted on a parcel of land located within 200 feet of any parcel of land upon which another discount jewelry store is located. (2) Electronics/camera store. No electronics/camera store is permitted on a parcel of land located within 200 feet of any parcel of land upon which another electronics/camera store is located. (3) T-shirt shop. No T-shirt shop is permitted on a parcel of land located within 200 feet of any parcel of land upon which another T-shirt shop is located. As of March 21, 1995, no new T-shirt shops shall be located in the HRCC, HRCC-1, HRCC-2, and HRCC-3 districts. A T-shirt shop licensed by the city and in operation in the HRCC, HRCC-1, HRCC-2, or HRCC-3 district as of March 21, 1995 may continue in existence as a nonconforming use. A change in ownership of an existing T-shirt shop shall not affect such nonconforming use status. If an existing T-shirt shop is enlarged or is increased in size or undergoes a structural alteration that exceeds 50 percent of the value of its building or structure as shown on the county tax assessment records or is abandoned in use as a T-shirt shop for a period of six months, its nonconforming use status shall terminate, and the use of the building or structure shall conform to this division and the restrictions of the HRCC, HRCC-1, HRCC-2, and HRCC-3 districts. The requirements of this subsection shall supersede conflicting requirements, if any, of section 122-1504. (4) Combination business. No combination business is permitted on a parcel of land located within 200 feet of any parcel of land upon which another combination business is located or upon which a business is located which offers for retail sale any component of the combination business; merchandise regulated in this division (i.e., one or more of the following: discount jewelry store, electronic/camera store, or T-shirt shop, as defined by section 122-1501). http://www.municod e.com/resources/gate way.asp?pid=10053&s id=9 Boca Raton, FL No provision for locally serving business http://www.municod e.com/resources/gate way.asp?pid=10145&s id=9 New York, NY The West Harlem Special District allows density bonuses for developers who create small business incubators that incentivize affordable retail space for local and small businesses http://mbpo.org/uplo ads/WHSD%20Detaile d%20Proposal.pdf P40 II. City of Aspen | Commercial Mix Strategies June 25, 2008 Local Business Regulations City Retail Sales Description Code Site Palm Beach, FL Palm Beach, FL developed an ordinance that stated the commercial district should be humanly scale and serve the needs of local resident while converting its main commercial district into a “town-serving” zone. Retailers in the zone must be smaller than 2,000 square feet and must primarily serve “town persons (hose living, visiting or working in Palm Beach).” Businesses larger than 2,000 SF may apply for a special permit provided that they can demonstrate that no less than 50% of the anticipated customers will be “town people” rather than shoppers from outside the town. The ordinance was passed in 1991. http://www.newrules .org/retail/palmbeac h.html http://www.newrules .org/retail/palmbeac hruling.pdf Carmel, CA Carmel, CA developed an ordinance in the mid-1980’s to outlaw formula restaurants defined in the code as food service business required by contractual or other arrangement to offer standardized menus, ingredients, food preparation, employee uniforms, interior décor, signage or exterior design or adopts a name, appearance or food presentation format which causes it to be substantially identical to another restaurant regardless of ownership or location http://www.newrules. org/retail/carmel.html P41 II. City of Aspen | Commercial Mix Strategies June 25, 2008 Appendix B: Palm Beach, FL Town-Serving Commercial Regulations DIVISION 8. C-TS TOWN-SERVING COMMERCIAL DISTRICT* Sec. 134-1106. Purpose and limitations. The purposes of the C-TS town-serving commercial district are to: (1) Create, preserve and enhance areas of attractive, small-scale, retail, personal and professional/business services to be developed either as a unit or in individual parcels, providing for the frequently recurring needs of townpersons. (2) Enhance the general character of the district and its compatibility with its residential surroundings, and, therefore, signs are limited to those accessory to businesses conducted on the premises, including the number, area and types; retail drive-in facilities are not permitted, and, in order to maintain the town-serving nature of the district, limitations on gross leasable floor (GLA) area are imposed. (Ord. No. 2-74, schedule B, 3-26-74; Ord. No. 3-77, § 2, 3-29-77; Ord. No. 5-78, §§ 10, 15, 3-31-78; Ord. No. 7-79, §§ 2, 5, 7, 3-30-79; Ord. No. 4-80, § 3, 3-31-80; Ord. No. 6-81, § 2(a)--(d), (g), (h), 3-31-81; Ord. No. 7-82, § 3(a)--(d), 3-31-82; Ord. No. 2-83, § 3(c), 2-23- 83; Ord. No. 1-84, § 2(f)--(h), 3-1-84; Ord. No. 1-85, § 2(g)--(k), 2-11-85; Ord. No. 1-86, § 2(b), (c), 2-10-86; Ord. No. 1-87, § 2(c)--(f), 2-9-87; Ord. No. 2-88, § 1, 2-8-88; Ord. No. 1-89, § 2(a), 2-6-89; Ord. No. 1-90, § 2(f)--(i), 2-5-90; Ord. No. 1-91, § 2(b), 4-23-91; Ord. No. 1-92, § 2, 2-3-92; Ord. No. 6-93, § 2(a)1--7, 2-9-93) Sec. 134-1107. Permitted uses. (a) Enumeration; maximum gross leasable area. The permitted uses in the C-TS town- serving commercial district, with a maximum of 2,000 square feet of gross leasable area (GLA), are as follows: (1) Retail and service establishments, such as restaurants and bars/lounges, hardware stores, food stores, clothing stores, drugstores, barbershops, beauty salons and jewelry stores. (2) Offices, executive office suites, professional services, business services, and securities or financial brokerage and trust companies located above the first floor. (3) Nonprofit cultural centers. (4) Professional or studio-type schools. P42 II. City of Aspen | Commercial Mix Strategies June 25, 2008 (5) Essential services. (b) Regulation of existing nonconforming commercial uses. Any existing uses contained on the list of permitted uses shown in subsection (a) of this section which contain more than 2,000 square feet of gross leasable area (GLA) shall be classified as existing nonconforming uses under article IV of this chapter pertaining to nonconforming uses. However, all future changes of use shall be limited to those uses listed as permitted uses on the list contained in this section with a maximum gross leasable area of 2,000 square feet, and if a change of use is contemplated from one general commercial category (retail and services; office, professional and business services; or banks and financial institutions) to another, or from one generic use (residential, commercial, public/private group use) to another, wherein the new use will involve a gross leasable area exceeding 2,000 square feet, the contemplated new use shall be subject to prior approval of a special exception application by the town council before the change is made (refer to sections 134-227 through 134-233 pertaining to special exception uses). In effect, this will allow any existing use over 2,000 square feet, in a district with a 2,000-square- footage limitation, to continue operating at its existing scale or to change to another use within the same general commercial category without town council approval. For example, if a ladies apparel store of 8,000 square feet exists in any of the C-TS or C-WA districts and the owner wishes to change to an antique store of the same size or subdivide into two 4,000-square-foot stores, one being a toy store and the other a shoe store, such a change would be allowed without prior town council approval. However, if the owner of the same 8,000-square-foot ladies apparel store wanted to change to a bank or an office or a business service or the owner wished to subdivide into two 4,000- square-foot offices, the owner would need to apply for and obtain approval of a special exception from the town council. No existing commercial use which is subject to the 2,000 square feet maximum gross leasable area (GLA) regulation may occupy additional space within 1,500 feet of the existing licensed businesses, which distance shall be measured along the public sidewalk, if such new space to be occupied will increase the total gross leasable area (GLA) to more than 2,000 square feet. (Ord. No. 2-74, schedule B, 3-26-74; Ord. No. 3-77, § 2, 3-29-77; Ord. No. 5-78, §§ 10, 15, 3-31-78; Ord. No. 7-79, §§ 2, 5, 7, 3-30-79; Ord. No. 4-80, § 3, 3-31-80; Ord. No. 6-81, § 2(a)--(d), (g), (h), 3-31-81; Ord. No. 7-82, § 3(a)--(d), 3-31-82; Ord. No. 2-83, § 3(c), 2-23- 83; Ord. No. 1-84, § 2(f)--(h), 3-1-84; Ord. No. 1-85, § 2(g)--(k), 2-11-85; Ord. No. 1-86, § 2(b), (c), 2-10-86; Ord. No. 1-87, § 2(c)--(f), 2-9-87; Ord. No. 2-88, § 1, 2-8-88; Ord. No. 1-89, § 2(a), 2-6-89; Ord. No. 1-90, § 2(f)--(i), 2-5-90; Ord. No. 1-91, § 2(b), 4-23-91; Ord. No. 1-92, § 2, 2-3-92; Ord. No. 6-93, § 2(a)1--7, 2-9-93; Ord. No. 1-96, § 4, 2-5-96; Ord. No. 1-98, § 5, 2-9-98; Ord. No. 1-02, § 9, 3-12- 02; Ord. No. 1-04, §§ 17, 22, 3-9-04; Ord. No. 1-05, § 2, 3-8-05) Sec. 134-1108. Accessory uses. The accessory uses in the C-TS town-serving commercial district are as follows: (1) Off-street parking and loading. (2) Signs. P43 II. City of Aspen | Commercial Mix Strategies June 25, 2008 (3) Accessory uses customarily incident to the permitted or approved special exception uses. (Ord. No. 2-74, schedule B, 3-26-74; Ord. No. 3-77, § 2, 3-29-77; Ord. No. 5-78, §§ 10, 15, 3-31-78; Ord. No. 7-79, §§ 2, 5, 7, 3-30-79; Ord. No. 4-80, § 3, 3-31-80; Ord. No. 6-81, § 2(a)--(d), (g), (h), 3-31-81; Ord. No. 7-82, § 3(a)--(d), 3-31-82; Ord. No. 2-83, § 3(c), 2-23- 83; Ord. No. 1-84, § 2(f)--(h), 3-1-84; Ord. No. 1-85, § 2(g)--(k), 2-11-85; Ord. No. 1-86, § 2(b), (c), 2-10-86; Ord. No. 1-87, § 2(c)--(f), 2-9-87; Ord. No. 2-88, § 1, 2-8-88; Ord. No. 1-89, § 2(a), 2-6-89; Ord. No. 1-90, § 2(f)--(i), 2-5-90; Ord. No. 1-91, § 2(b), 4-23-91; Ord. No. 1-92, § 2, 2-3-92; Ord. No. 6-93, § 2(a)1--7, 2-9-93) Sec. 134-1109. Special exception uses. (a) The special exception uses require a site plan and review as provided in article III of this chapter. The special exception uses in the C-TS town-serving commercial district are as follows: (1) Public or private parking lots or storage garages. (2) Auto rental lots. (3) Residential tenancy above the first floor. (4) Private social, swimming, golf, tennis and yacht clubs. (5) Service stations. (6) Public structures. (7) Supplemental parking. (8) Public or private academic schools. (9) Drive-in business service facilities. (10) Churches, synagogues or other houses of worship. (11) Any commercial establishment with greater than 2,000 square feet of gross leasable area, provided the town council has found, as a fact, that the proposed use is town serving. (12) Banks and financial institutions, excluding securities or financial brokerage and trust companies. (13) Roof-deck automobile parking. (14) Outdoor seating in conjunction with permitted restaurants (see section 134-1111). (15) Reserved. (16) Museums occupying building of unique value as designated historical landmarks, as determined by the landmarks preservation commission and the town council. (17) Nightclubs. (18) Offices (excluding executive office suites), professional services, business services and securities or financial brokerage and trust companies on the first floor provided that there are at least 50 percent existing office uses on all floors of the building in which the office use is proposed and more than 50 percent existing office uses on the first floor within 300 feet of the proposed office use in the same zoning district. P44 II. City of Aspen | Commercial Mix Strategies June 25, 2008 (b) An owner or tenant of a property, located within the C-TS district, which property has received approval of a special exception after March 31, 1980, shall be required to obtain approval by the town council under the provisions of section 134-229(12) prior to being granted a new occupational license. This subsection shall not apply to renewal of an existing occupational license. (Ord. No. 2-74, schedule B, 3-26-74; Ord. No. 3-77, § 2, 3-29-77; Ord. No. 5-78, §§ 10, 15, 3-31-78; Ord. No. 7-79, §§ 2, 5, 7, 3-30-79; Ord. No. 4-80, § 3, 3-31-80; Ord. No. 6-81, § 2(a)--(d), (g), (h), 3-31-81; Ord. No. 7-82, § 3(a)--(d), 3-31-82; Ord. No. 2-83, § 3(c), 2-23- 83; Ord. No. 1-84, § 2(f)--(h), 3-1-84; Ord. No. 1-85, § 2(g)--(k), 2-11-85; Ord. No. 1-86, § 2(b), (c), 2-10-86; Ord. No. 1-87, § 2(c)--(f), 2-9-87; Ord. No. 2-88, § 1, 2-8-88; Ord. No. 1-89, § 2(a), 2-6-89; Ord. No. 1-90, § 2(f)--(i), 2-5-90; Ord. No. 1-91, § 2(b), 4-23-91; Ord. No. 1-92, § 2, 2-3-92; Ord. No. 6-93, § 2(a)1--7, 2-9-93; Ord. No. 1-96, § 3, 2-5-96; Ord. No. 1-98, § 5, 2-9-98; Ord. No. 1-02, § 8, 3-12- 02; Ord. No. 1-03, § 2, 3-11-03; Ord. No. 1-04, § 28, 3-9-04; Ord. No. 1-07, § 3, 4-10-07) Sec. 134-1110. Accessory structures. (a) Generally. Enclosed accessory structures in the C-TS town-serving commercial district shall comply with front and side yard requirements for the principal structure to which they are accessory and shall be not closer to any rear property line than ten feet. (b) Dish antennas. A dish antenna shall be an accessory structure and shall be constructed, erected or placed in compliance with all of the provisions of this chapter applicable to accessory structures. Dish antennas shall not exceed three meters in diameter. Only one dish antenna that exceeds one meter in diameter shall be permitted on each building. Such dish antenna which exceeds one meter in diameter shall not be attached to a building; shall not be closer than ten feet to any side or rear property line; shall not exceed 12 feet in height above the average grade; and, shall not be located in a required front yard, street side yard or rear street yard setback. Each residential unit or commercial tenant space shall not be limited as to the number of dish antennas of one meter or less in diameter and said antenna(s) may be attached or unattached to a building. If said dish antenna(s) is unattached, said antenna(s) shall not exceed 12 feet in height above the average grade; shall be located no closer than ten feet to any side or rear lot line; and, shall not be located in a required front yard, street side yard or rear street yard setback. All attached and unattached dish antennas in this commercial zoning district shall be screened from public view, and private and public streets and ways; be neutral in color; and, to the maximum extent possible, compatible with the surrounding neighborhood appearance and character. In addition, no form of lettering, advertising or identification shall be allowed on any such antenna or its framework (other than the manufacturer's small identification plate). Note: One meter in the metric system of measurement equals 39.37 inches or 3.28 feet. (Ord. No. 2-74, § 5.51, 3-26-74; Ord. No. 3-76, § 3, 3-23-76; Ord. No. 5-78, § 11, 3-31-78; Ord. No. 7-79, § 11, 3-30-79; Ord. No. 4-80, § 4, 3-31-80; Ord. No. 7-82, § 4(i), (k), 3-31-82; Ord. No. 1-84, § 3(h), 3-1-84; Ord. No. 1-85, § 3(e), 2-11-85; Ord. No. 1-86, § 3(d), 2- 10-86; Ord. No. 1-87, § 3(e), 2-9-87; Ord. No. 1-90, § 3(g), 2-5-90; Ord. No. 1-92, § 3(e), 2-3-92; Ord. No. 1-93, § 3(g), 2-8-93; Ord. No. 1-94, § 3(c), 2-7-94; Ord. No. 1-95, § 1(b), 1-23-95; Ord. No. 1-97, § 5, 2-17-97; Ord. No. 1-99, § 10, 4-5-99) P45 II. City of Aspen | Commercial Mix Strategies June 25, 2008 Sec. 134-1111. Special exception for stands, seated dining areas and open counters for eating and drinking. (a) No stands or open counters and no open seating arrangement, whether or not at tables, intended for feeding or the dispensing of food or drink for profit or for any other similar purposes for the sale of commodities to the public can be erected or permitted anywhere in the town unless they are contained within a building. However, in the C-TS town-serving commercial district, the town council may permit, as a special exception, the serving of food and beverages to seated patrons in outdoor open air areas which are operated as a part of a restaurant contained within a building, provided the additional special exception can not increase the allowable capacity. The following are conditions to the approval of any such special exception: (1) Open air dining areas must be properly buffered to avoid noise, litter, light and odor impacts upon neighboring properties, especially nearby residential uses. (2) Area associated with the outdoor portion of the restaurant will not count toward any maximum square footage limitations associated with the town- serving aspects of this chapter. (b) In the C-TS town-serving commercial district, the town council may permit, as a special exception, extra outdoor patron seating, over and above the inside seating capacity, as part of a take-out food business contained within a building provided the following conditions are met: (1) The take-out food business inside tenant space does not exceed 2,000 square feet. (2) Open air dining areas are properly buffered to avoid noise, litter, light and odor impacts upon neighboring properties, especially nearby residential uses. (3) The area associated with the outdoor seating of the take-out food business will not count toward any maximum square footage limitations associated with the town-serving aspects of this chapter. (4) Area associated with the outdoor seating cannot encroach into the required ten-foot unobstructed, pedestrian sidewalk. (5) The amount of outdoor seating can not exceed eight seats, nor can it extend beyond any property line of the take-out business tenant space. (Ord. No. 2-74, § 6.61, 3-26-74; Ord. No. 3-77, § 14, 3-29-77; Ord. No. 1-89, 4(f), 2-6-89; Ord. No. 1-04, § 15, 3-9-04) Sec. 134-1112. Commercial uses; site plan approval for new buildings, new building additions or changes in permitted uses over certain floor area. P46 II. City of Aspen | Commercial Mix Strategies June 25, 2008 All applications for new buildings or for new building additions or for changes in a permitted use in section 134-1107 which involve more than 2,000 square feet of building floor area of buildings in the C-TS town-serving commercial district shall require a site plan approval in accordance with article III of this chapter. No certificate of occupancy shall be issued for any building, unless all facilities included in the site plan have been provided in accordance therewith. The maximum dimension of any structure or group of attached structures shall not exceed 150 feet. (Ord. No. 2-74, § 6.55, 3-26-74; Ord. No. 5-78, § 12, 3-31-78; Ord. No. 7-79, § 14, 3-30-79; Ord. No. 4-80, § 6, 3-31-80; Ord. No. 7-82, § 5(d), 3-31-82; Ord. No. 1-85, § 4(h), 2-11-85) Sec. 134-1113. Lot, yard and area requirements--Generally. In the C-TS town-serving commercial district, the schedule of lot, yard and area requirements is as given in this section: (1) Lot area. The minimum lot area is 4,000 square feet. (2) Lot width. The minimum lot width is 30 feet. (3) Lot depth. The minimum lot depth is 90 feet. (4) Density. A single dwelling unit, or multiple dwelling units not to exceed six dwelling units per gross acre. See article III of this chapter for site plan review requirements. (5) Front yard. a. For one-story buildings, the minimum front yard setback is five feet. b. For two-story buildings, the minimum front yard setback is five feet. c. All buildings shall be set back so as to provide at least a ten-foot-wide pedestrian walkway between the street curbline and the building, exclusive of beautification strips, not more than five feet of which may be on the town street right-of-way, where appropriate, and additionally, to provide for the minimum building front yard setback, which shall be measured from the inside (lot side) of the required pedestrian walkway. Where no front yard building setback is approved or required, two feet of the required ten-foot-wide pedestrian walkway, adjacent to the inside (lot side) of the walkway, may be landscaped by placement of potted plants or removable planters. Such potted plants or planters shall include xeriscape landscaping whenever possible. d. For buildings in excess of 15 feet in height, increase all minimum yard requirements one foot for each two feet of building height, or portion thereof, exceeding 15 feet. (6) Side yard. a. There is no minimum side yard required for one-story structures, but a side yard shall be five feet if provided. When the side yard of a C-TS property adjoins property zoned in any R district, a ten-foot side yard is required on that side. P47 II. City of Aspen | Commercial Mix Strategies June 25, 2008 b. For buildings in excess of 15 feet in height, increase all minimum yard requirements one foot for each two feet of building height, or portion thereof, exceeding 15 feet. Side yards shall be as calculated or five feet, whichever is greater. (7) Rear yard. a. For one-story buildings, the minimum rear yard setback is ten feet. b. For two-story buildings, the minimum rear yard setback is ten feet. c. For buildings in excess of 15 feet in height, increase all minimum yard requirements one foot for each two feet of building height, or portion thereof, exceeding 15 feet. Side yards shall be as calculated or five feet, whichever is greater. (8) Height and overall height. a. For one-story buildings, the maximum building height is 15 feet. b. For two-story buildings, the maximum building height is 25 feet. c. In this district, the maximum building height allows one story, with provision for a special exception for two stories. See special exception provisions in sections 134-227 through 134-233 (special exception use), section 134-1115 relating to allowable height and lot coverage, and article III of this chapter (site plan review). d. Maximum overall height of a building shall be the maximum allowable building height, as defined in section 134-2, plus five feet for a flat roof and ten feet for all other roof styles. When a parapet is used above the maximum building height, as defined in section 134-2, the building overall height will be calculated based on the flat roof style identified above. Parapet walls extending above the maximum allowable building height shall have appropriate architectural treatment. (9) Lot coverage. a. For one-story buildings, the maximum lot coverage is 70 percent. b. For two-story buildings, the maximum lot coverage is 70 percent. (10) Length. a. For one-story buildings, the maximum building length is 150 feet. b. For two-story buildings, the maximum building length is 150 feet. (11) Landscaped open space. P48 II. City of Aspen | Commercial Mix Strategies June 25, 2008 a. For one-story buildings, the minimum landscaped open space is 15 percent. b. For two-story buildings, the minimum landscaped open space is 25 percent. c. Additionally, not less than 35 percent of the required front yard must be landscaped open space in the C-TS district. (12) Floor area. a. For one-story buildings, the maximum gross floor area of buildings is 15,000 square feet. b. For two-story buildings, the maximum gross floor area of buildings is 15,000 square feet. (Ord. No. 2-74, schedule A, 3-26-74; Ord. No. 7-79, §§ 2, 6, 3-30-79; Ord. No. 4-80, § 3, 3-31-80; Ord. No. 6-81, § 2(e), (f), 3-31-81; Ord. No. 7-82, § 3(e), 3-31-82; Ord. No. 2-83, §§ 3(a), (b), 2-23-83; Ord. No. 1-84, §§ 2(a)--(e), 3-1-84; Ord. No. 1-85, § 2(b)--(f), 2-11- 85; Ord. No. 1-86, § 2(a), 2-10-86; Ord. No. 1-88, § 1, 2-8-88; Ord. No. 1-89, § 2(b)--(d), 2-6-89; Ord. No. 1-90, § 2(a)--(e), 2-5-90; Ord. No. 1-92, § 2(a)1, 2, 2-3-92; Ord. No. 9-93, § 2(b), 6-8-93; Ord. No. 1-94, § 2(a), 2-7-94; Ord. No. 1-96, § 8, 2-5-96; Ord. No. 1-97, § 1, 2-17-97; Ord. No. 1-98, §§ 2--4, 2-9-98; Ord. No. 2-98, §§ 1, 2, 2-27-98; Ord. No. 1-04, § 31, 3-9-04) Sec. 134-1114. Same--Exceptions. (a) In the C-TS town-serving commercial district, cornices, solid canopies, or architectural features may extend 48 inches over the sidewalk or required yard area, provided they shall have nine feet of vertical clearance between any solid construction and the sidewalk or yard. (b) Marquees or canvas-covered fireproof canopies, no wider than entranceways, may be constructed over main entrances to hotels, theaters and places of public assembly and may extend to the face of the curb, provided that no support shall be nearer than 18 inches to the face of the curb, and the installation shall have a minimum of nine feet of vertical clearance between any solid construction and the sidewalk. (c) No projections shall be allowed in the required rear yard except open-type fire escapes, and these must be provided with a counter-balanced bottom section to provide for nine feet of clearance when up. (d) Awnings may be suspended over sidewalks or ways, provided that they shall not project nearer than 18 inches to the face of the street curbline or more than eight feet from the exterior wall of the building, and the installation shall have at least seven feet six inches of vertical clearance between any solid construction and the sidewalk or way. Cloth front and side drops shall measure not less than six feet six inches from their lowest point to the sidewalk or way. (e) One open, one story pergola may extend five feet into a setback provided said structure does not exceed a height of nine feet; the supporting beams do not obstruct a sidewalk or walkway. P49 II. City of Aspen | Commercial Mix Strategies June 25, 2008 (f) One arbor shall be allowed in a required setback on a property provided said arbor does not exceed a height of eight feet nor cover more than 15 square feet in area; and, does not block a sidewalk or walkway. (Ord. No. 2-74, § 5.33(a)--(d), 3-26-74; Ord. No. 4-80, § 4, 3-31-80; Ord. No. 1-91, § 3(c), 4-23-91; Ord. No. 3-02, § 3, 7-9-02) Sec. 134-1115. Special exception to height regulations; special exception structures. In order to encourage increased open space, landscaped open space, reduced density and lot coverage and architectural detail, the town council may at its discretion, upon review of an application and public hearing thereon, allow for the increase of the maximum building height in the C-TS town-serving commercial district, upon a finding being made by the town council that the proposed increase in height for a contemplated special exception structure is in the public interest, that careful attention is given to architectural detail, and that it meets the standards of sections 134-227 through 134-233 and the following goals and guidelines: Two-story guidelines. Lot coverage not more than 35 percent. (Ord. No. 2-74, § 5.48, 3-26-74; Ord. No. 3-76, § 3, 3-23-76; Ord. No. 5-78, § 11, 3-31-78; Ord. No. 7-82, § 4(g), 3-31-82; Ord. No. 2- 83, § 4(d), 2-23-83; Ord. No. 1-84, § 3(e), 3-1-84; Ord. No. 1-85, § 3(d), 2-11-85; Ord. No. 1-91, § 3(e), 4-23-91; Ord. No. 1-92, § 3(d), 2-3-92) Sec. 134-1116. Supplementary district regulations. The supplementary district regulations which may be applicable to the C-TS town- serving commercial district are contained in article VIII of this chapter. Sec. 134-1117. Off-street parking and loading. The off-street parking or loading requirements which may be applicable in the C-TS town-serving commercial district are contained in article IX of this chapter. Sec. 134-1118. Signs. The sign regulations which may be applicable in the C-TS town-serving commercial district are contained in article XI of this chapter. Sec. 134-1119. Air conditioning and generator equipment. Air conditioners and air handlers, cooling towers, generators, swimming pool filters, pumps and heaters are regulated in section 134-1728 and 134-1729. (Ord. No. 1-99, § 11, 4-5-99) P50 II. City of Aspen | Commercial Mix Strategies June 25, 2008 Sec. 134-1120. Architectural tower features. In the commercial zoning districts, a maximum of two towers as architectural features may be constructed as integral parts of the building provided that no tower(s) exceeds the allowable overall height by more than five feet; such tower(s) is set back an additional five feet on the front, rear, side, and street side and street rear yards; and, such tower(s) has no habitable floor area. The area of such tower(s) shall in combination not exceed two percent of the gross floor area of the building. This section does not apply to entry facades or parapets. (Ord. No. 1-00, § 2, 2-22-00) Secs. 134-1121--134-1155. Reserved. P51 II. City of Aspen | Commercial Mix Strategies June 25, 2008 Endnotes 1 Handelsman v. Town of Palm Beach, 585 So.2d 1047 (Fla.App. 1991). 2 Wisconsin Secretary of State, Department of Financial Institutions, corporate records for Green Bay Packers, Inc., at http://www.wdfi.org/apps/CorpSearch. 3 Green Bay Packers, Inc. website at http://www.packers.com/community/shareholders/. 4 Mitchell, “Home Shopping Networks,” at http://www.alternet.org/module/printversion/18158. 5 Mitchell, Stacy, 10 Reasons Why Maine’s Homegrown Economy Matters and 50 Proven Ways to Revive It, Maine Business for Social Responsibility (May 2006), at 35. 6 See International Cooperative Association website at http://www.ica.coop/coop/index.html. 7 Summary by Willey Street Co-op (Madison, Wisconsin) at http://www.willystreet.coop/seven_principles. See ICA principles at http://www.ica.coop/coop/principles.html. For a history of the cooperative movement, see http://en.wikipedia.org/wiki/Co-operative_movement. 8 Institute for Community Economics, “Community Land Trusts,” at http://www.iceclt.org/clt. 9 Mitchell, supra, at 30. 10 Livingston, " Outside the Box: Community-owned department stores an alternative to big-box chain stores," Rural Cooperatives 74:1 (Jan./Feb. 2007), at http://www.rurdev.usda.gov/rbs/pub/jan07/outside.htm. 11 Bloom v. City of Fort Collins, 784 P.2d 304 (Colo. 1990). 12 White, "Using Fees and Taxes to Promote Affordable Housing," 43 Land Use L. & Zoning Digest, no. 9, at 3 (Sept. 1991). 13 See S. Mark White, Using Fees and Taxes to Promote Affordable Housing, 43 LAND USE L. & ZONING DIG., no. 9, at 3 (Sept. 1991). 14 White, supra; Strauss & Leitner, "Financing Public Facilities with Development Excise Taxes: An Alternative to Exactions and Impact Fees," Zoning and Planning Law Report, No. 11 (March 1988). 15 S. Mark White, Affordable Housing: Proactive and Reactive Regulatory and Planning Strategies (American Planning Association, Planning Advisory Service Report No. 441, 1992). 16 CRS § 31-25-103(10)(urban renewal project includes rehabilitation and conservation). 17 The OPDC was established in 1974 by area banks and businesses, and is a private, not-for-profit corporation. It is a community economic development agency. See website at http://www.oakparkdevelopmentcorporation.com. 18 A SSDP is described as follows (CRS § 24-68-102(4)): "Site specific development plan" means a plan which has been submitted to a local government by a landowner or his representative describing with reasonable certainty the type and intensity of use for a specific parcel or parcels of property. Such plan may be in the form of, but need not be limited to, any of the following plans or approvals: A planned unit development plan, a subdivision plat, a specially planned area, a planned building group, a general submission plan, a preliminary or general development plan, a conditional or special use plan, a development agreement, or any other land use approval designation as may be utilized by a local government. What constitutes a site specific development plan under this article that would trigger a vested property right shall be finally determined by the local government either pursuant to ordinance or regulation or upon an agreement entered into by the local government and the landowner, and the document that triggers such vesting shall be so identified at the time of its approval. A variance shall not constitute a site specific development plan. "Site specific development plan" shall not include a sketch plan as defined in section 30-28-101 (8), C.R.S., or a preliminary plan as defined in section 30-28-101 (6), C.R.S. P52 II. Micro-Unit White Paper Council Work Session August 9, 2016 Page 1 of 4 Micro-Housing Units White Paper: What is it, and could it work in Aspen What is Micro-Housing? Micro housing is generally considered to be apartment-style housing with efficient studio floor plans of less than 500 square feet of floor area per unit. Units include private cooking and bathing facilities and shared amenities like storage and gathering areas. While it is not necessarily a new design, in the last ten years it has grown in popularity and prevalence in larger cities such as Denver, Seattle, and New York City, particularly since the Great Recession. The increase in popularity corresponds with the introduction of Millennial-age adults to the workforce and rapid increases in real estate prices and rents in many parts of the country. In areas where micro-housing units are built, they are generally perceived as a solution to housing affordability, building efficiency and high land and construction costs. By increasing the number of available housing units in desirable neighborhoods, typically young, single, location-specific workers are able to live in proximity to transit, amenities and employment centers where they would otherwise be priced-out of the local housing market. The small unit size and high project density lowers per square foot construction costs, allowing micro units to be brought to market for typically 30 percent to 40 percent below market price for traditional apartment floor plans. It is noteworthy that, while the unit lease price for micro units is lower than market, the per square foot lease price tends to be higher. This is due to the smaller size of the units relative to the fixed development costs of residential construction. Micro housing occupants cite location as the primary motivation for the decision to lease a micro unit, and their lifestyle enables them to make such a compromise on living space. Case Studies Seattle, Washington Seattle has experienced a relative boom in micro housing development in the last decade. The trend began when savvy developers found a loophole in the land use code which allowed the development of medium density, dormitory-style micro projects in urban neighborhoods without having to provide parking equivalent to the residential square footage for other development types. Outcry from neighborhood organizations led to revisions in the land use code which simultaneously closed the micro-unit parking loop hole while formalizing standards to facilitate development of more micro housing projects in urban neighborhoods around the city. The results have been generally positive for the availability of housing and development impact mitigation. New York City, New York Most of the micro housing in New York City has been constructed in the last five years in Manhattan and Brooklyn, both high-density urban areas. Unlike Seattle, significant changes to building codes and development standards were required before micro projects were built. The City Planning Department included micro housing in a comprehensive, multi-year housing planning process. The result has been policies and regulations which encourage the development of micro housing to meet the City’s affordable housing and density needs. The City even P53 II. Micro-Unit White Paper Council Work Session August 9, 2016 Page 2 of 4 facilitated a design competition for the first micro project, which yielded a modular, prefabricated structure. Denver, Colorado The residential construction boom in Denver has kept pace with other, larger urban areas in the country, and it has featured a handful of micro unit projects in recent years. Given the relatively lower land costs in Denver compared to Seattle, New York and other first tier cities, Denver’s projects have been more modest in scale. They also tend to feature more on-site parking due to Denver’s higher parking requirements, and slightly larger unit sizes due to the availability of land in the urban core. Considerations for Aspen While micro units have been built in large US cities and have provided new housing options in those communities, there are a number of factors when considering scalability to Aspen including free-market forces, location, and design. Location Typically, micro housing is located in a city’s dense neighborhoods, as its desirability is tied directly to its location in attractive, expensive neighborhoods. Aspen’s small size relative to the urban centers where micro housing has been successful makes it possible that micro housing may be appealing to renters or buyers outside of the downtown area. However, the density needed to make micro housing financially feasible on an individual project basis may only be appropriate in certain areas. This discussion should be central to any further consideration of micro housing in Aspen. Triple Bottom Line Given the sustainability benefits of the residential density that micro housing provides, it is useful to look at its potential impacts on Aspen through the sustainability triple-bottom-line. From an economic standpoint, allowing micro housing in mixed-use or commercial zones may preclude those spaces from being used purely for commercial use. Should residential uses in those zones proliferate over time, this may reduce the sale tax generation capacity of properties within those zones. However, having more residents living in the urban core could provide a larger customer base for downtown businesses, particularly those providing needed services to year-round residents. From a vitality standpoint, there are benefits to housing workers in downtown Aspen; the preservation and enhancement of Aspen’s community character and the sustainability of the year-round economy may be enhanced by the presence of more year-round residents in town. Environmentally, the unit density of micro housing projects provides more efficient building energy consumption, and the per-square-foot energy required to heat and illuminate a micro unit is lower than traditional housing typologies. Design and Zoning There are a number of factors related to design and zoning standards to consider in micro housing policies and standards. Some of them include: P54 II. Micro-Unit White Paper Council Work Session August 9, 2016 Page 3 of 4 Minimum and maximum unit size Typically 250 and 500 square feet; Minimum bathroom and kitchen area Typically 70 square feet; Building code amendments are often required; Minimum and maximum parking requirements Typically 0 to 1.25 parking spaces per unit; Minimum and maximum project density Density is often dictated by project finances and zoning standards; Project design and construction Modular, pre-fabricated or traditional construction; Affordability Deed-restricted or free-market product; Occupancy Limit 1 to 2 individuals per unit; Location and zoning Often developed in mixed-use projects; Typically offered in dense neighborhoods; Project density often drives building height and FAR; Many communities in which micro housing has been developed were forced to amend their building codes and zoning standards to allow for micro housing to be financially feasible. Should the City choose to pursue micro housing, these amendments will need to be compiled and analyzed to ensure that development rules and regulations allow for the types of projects the Council deems desirable or appropriate. In order to reduce project cost and bring micro units to market at affordable price points, developers have employed some unique designs and construction techniques. Modular construction and pre-fabrication are common practices in micro housing projects. While these can be employed in tasteful and architecturally dynamic ways, the City may need to look at how the Residential and Commercial Design Standards relate to the design and financial needs unique to micro housing development. An important consideration for whether micro housing is an appropriate and useful housing typology for Aspen will also be determining those zone districts and areas of the City where micro housing is appropriate. While it has been deployed most effectively in dense areas and the sustainability benefits of increasing infill density are clear, not all downtown and commercial zone districts are necessarily appropriate for micro housing. Affordability Discussions with stakeholders in the real estate and development community illuminated a number of market factors which may affect the affordability of micro housing in the Aspen market. Typically, micro housing is leased below market rent for more traditional housing units in order to increase its appeal relative to its smaller size. On the surface, this seems like it could be an appealing option for Aspen in terms of providing a wider variety of housing options for residents and increasing infill density. However, the unique development circumstances in Aspen, particularly the high land and construction costs, create a significant barrier to developers seeking to bring micro housing to market at a price point affordable to workers and residents. Recently, in Aspen’s commercial P55 II. Micro-Unit White Paper Council Work Session August 9, 2016 Page 4 of 4 core and surrounding commercial and mixed-use zones, redevelopment project financing has depended on the inclusion of high-end, free-market residential units to carry the cost of associated commercial uses. If micro housing were permitted in these zone districts, the product would have to be similarly expensive for-sale units to ensure the financial feasibility of the project. This scenario could prevent micro housing from being offered for rent and at a price point affordable to area workers. Conclusion Micro housing is a potentially compelling option for the City of Aspen. It has the potential in increase the diversity of workforce housing units available in the City. It also could provide developers with an alternative to meeting their on-site affordable housing requirements. Additional benefits to allowing for micro housing could include increased housing opportunities, reduced traffic counts, increased demand for year-round goods and services and the maintenance of a vibrant downtown and commercial core. However, there are significant challenges to the development of micro housing that need to be addressed in order to ensure its financial feasibility and that it meets the objectives of the City Council and needs of residents. These include design criteria, zoning standards and affordability. In addition, discussion about an appropriate deed-restriction or permanent resident occupancy restriction may be appropriate to ensure the units are available as a housing option for local community members. P56 II. Exhibit C, Regulatory Tools Checklist YES NO 1. Zone District Approaches a. Expand/modify zone district boundaries b. Tailor use list and/or dimensional standards c. Create local serving business district (LSB) 2. Use Limitations a. Use size restrictions b. Use caps and spacing requirements c. Chain store/formula retail restrictions d. Conditional use/special review 3. Design/Incentive Approaches a. Modify design guidelines b. Height/floor area bonus c. Parking or affordable housing reductions d. GMQS scoring e. Legacy business program 4. Impact-Oriented Systems a. Mitigation standards/fee-in-lieu b. Ratio-based program c. Commercial replacement requirements YES NO 1. Micro-Housing Units 2. Physical Separation 3. Occupancy Restriction 4. Ban New Free-Market Residential Units Consider?Menu of Commercial Mix Regulatory Tools Menu of Residential Mix Regulatory Tools Consider? P57 II.