SUPPORTS ITEM NO. 3 P&E COMMITTEE AGENDA APRIL 18, 1996 POLICY REPORT DEVELOPMENT AND BUILDING Date: April 1, 1996 Dept. File No. MG TO: Standing Committee on Planning and Environment FROM: The Director of Central Area Planning and the Director of Land Use and Development, in consultation with the Director of Cultural Affairs, the Director of Legal Services, and the Director of Permits and Licenses. SUBJECT: Report Back - Increasing Permitted Density to accommodate Mezzanines in Artist Studio Buildings and Zoning Amendments for Double Counting Floor Space Ratio in C-3A RECOMMENDATIONS A. THAT as a condition of development permit approval, covenants be placed on the title of artist studios with double height spaces where there is potentially insufficient residual FSR to accommodate mezzanines and double counting has not been applied, the purpose of the covenant being to not only forewarn the applicant that a development and building permit is required (as at present), but to more clearly forewarn of inadequate residual FSR to allow for mezzanines. B. THAT the Director of Land Use and Development be instructed to make application to amend the Zoning and Development By-law generally in accordance with Appendix 'A' to provide for double counting FSR in the C-3A District Schedule; FURTHER THAT the Director of Legal Services be instructed to prepare the necessary by-law; AND FURTHER THAT the application and by-law be referred to a Public Hearing. COUNCIL POLICY The Building By-law permits the construction of a mezzanine in a double height space, with the requirement that 60% of the lower floor area not be covered by the mezzanine. On March 28, 1995, Council directed staff to: - draft zoning amendments for the IC-3 District to double count floor space for double height spaces for the calculation of floor space ratio (FSR). - discontinue the covenant regarding the installation of a mezzanine for future buildings with double height ceilings, in cases where double counting is applied. - retain existing covenants regarding the installation of a mezzanine for existing buildings with double height ceilings. - permit the development of double height ceilings but encourage, through guidelines, structural elements, sprinkler coverage, - 2 - electric services and other elements to support future mezzanines. - process permits for proposed mezzanines through joint development and building permits to decrease approval time. SUMMARY Council requested that staff report back on ways of permitting additional density to accommodate mezzanines in artist 'live/work' studio developments already built to the maximum permitted density. There are two buildings which lack residual FSR for the addition of mezzanines - 1850 Lorne Street and 330 East 1st Avenue, both in the IC-3 District (Brewery Creek). (see Appendix 'C' for a summary of projects). Staff suggest three options that could be collectively pursued by the owners of a development: 1. owners purchase Heritage Bonus Density (e.g., B.C. Hydro or former Central Library Bonus Density) and transfer this to their site; 2. density increase with 'no strings attached' (i.e., no requirement for an on-site facility that addresses City objectives or other public benefit); or 3. density increase conditional upon the provision of an on-site facility that addresses City objectives. The City's legal staff have advised that a rezoning initiated by the City to facilitate an increase in density on these sites would be open to legal challenge. For this reason, the owners will have to choose which option they wish to pursue and initiate the necessary rezoning and permit applications or other actions (e.g., Board of Variance appeal). Staff recommend that double counting FSR for double height spaces be extended to the C-3A District, as proposed for the IC-3 District. The IC-3 zoning amendments have been presented in a separate report for referral to public hearing. Staff also propose that covenants be placed on the title of properties where double counting has not been applied and there is insufficient residual floor space ratio (FSR) to accommodate the addition of mezzanines in all double height spaces. This will notify potential purchasers that there may be insufficient density to permit a mezzanine. With double counting provisions applying in the C-3A and IC-3 District Schedules in future, staff expect that such situations will be few in number. The contents of this report were discussed with the owners of studios in 1850 Lorne Street and 330 East 1st Avenue. There was interest expressed in pursuing Board of Variance appeals and the transfer of heritage bonus density. PURPOSE This report outlines: - options for increasing a site's permitted density to accommodate mezzanines in existing developments; - an approach for notifying purchasers of units with double height ceilings and potentially insufficient residual floor space ratio to accommodate mezzanines; and - recommendations for zoning amendments to introduce double - 3 - counting of double height spaces in the C-3A District. BACKGROUND A mezzanine is a partial storey constructed in a double height space. Typically, because of Building By-law limitations, the mezzanine covers no more than 40% of the lower floor area. The term "mezzanine" is usually associated with commercial or institutional buildings; in residential buildings, the term "loft" is commonly used. In this report, the term 'double height' space is used to mean a space that has a floor-to-floor height that is equivalent to at least two conventional storeys. There are two newly constructed artist 'live/work' studio developments in the Brewery Creek Enclave (IC-3) with the potential for mezzanines, but not enough residual floor space ratio (FSR) to permit the approval of additional floor space to accommodate their installation in approved double height spaces. A post occupancy inspection of artist 'live/work' studios has identified a number of mezzanines installed in double height spaces, without permit approvals in the IC-3 District. On March 28, 1995, Council resolved: THAT Policy 7, as contained in Appendix 'A' of the Policy Report dated February 9, 1995, be deferred pending a report back on the feasibility of providing the increased density to accommodate mezzanines in existing Artist Live/Work buildings through a rezoning initiated by the Director of Planning or by other means. The deferred policy (Policy 7) identified two ways for increasing FSR to accommodate mezzanines: heritage density transfers and density bonuses for secured low-cost, rental housing or non-profit cultural facilities. Furthermore, Council resolved: THAT staff be requested to report back on how prospective purchasers of units in existing artist 'live/work' buildings could be better warned with respect to the issue of mezzanines and residual FSR. Council also resolved that double height spaces should be double counted for the purpose of FSR calculation in the IC-3 District to ensure that there is sufficient residual FSR to accommodate future mezzanines. On March 8, 1995, the Board of Variance allowed an appeal granting 5,638 square feet of additional floor space to accommodate mezzanines at 330 East 1st Avenue. Staff supported the appeal because the calculation of FSR for the building's development application had initially indicated a permitted density similar to that proposed by the appellant. Prior to issuance of the permit, a miscalculation of FSR was identified by staff, resulting in a lower permitted residual density. On April 27, 1995 at a public hearing, Council approved a rezoning of 272 East 4th Avenue that increased the site's density to accommodate mezzanines. Council's approval was subject to the condition that the applicant convey a low cost rental studio to the City, as a 'quid pro quo' for the density increase. On August 9, 1995, the Board of Variance ruled in favour of an appellant seeking a 678 square foot increase in floor space (an increase from 2.83 FSR to 3.10 FSR) to accommodate mezzanines for an artist studio development at 1850 Lorne Street. The appellant noted that the forthcoming artist studio zoning amendments proposed FSR exclusions (e.g., amenity space) that would be approximately equivalent to the variance in FSR being requested. Staff did not support this appeal - 4 - because it presupposed Council's approval of the forthcoming zoning amendments. These forthcoming zoning amendments will allow for the exclusion of storage, amenity rooms and other similar facilities from the calculation of FSR. If approved, they will likely provide residual FSR to accommodate mezzanines equivalent to an average of 10% of the permitted density in the IC-3 District. This would be sufficient to provide some additional density for the development at 330 East 1st Avenue. However, owners of studios in this development and 1850 Lorne Street are interested in more additional FSR for mezzanines. Staff estimate that the developments will require up to the following additional FSR to accommodate a full sized loft in each of the 'double height' studios: 330 East 1st Avenue - 0.6 FSR; and 1850 Lorne Street - 0.6 FSR. DISCUSSION Increasing On-site Density to Accommodate Mezzanines In considering this issue, Planning staff believe the following issues need to be considered: - equity for development applicants; - the public benefit of density increases; - flexibility for owners (e.g., allowing for individual loft applications); - implications for density increases in other districts; - implications of extending the "Transfer of Density Policy" to include the IC-3 District. Staff have evaluated the following options for increasing the permitted density to accommodate mezzanines in existing or approved developments: 1. Owners Purchase Heritage Bonus Density (e.g., B.C. Hydro or former Central Library Bonus Density) and transfer this to their site; 2. Density Increase with 'no strings attached' (i.e., no requirement for an on-site facility that addresses City objectives or other public benefit); and 3. Density Increase conditional upon the provision of an on-site facility that addresses City objectives (i.e., as required for 272 East 4th Avenue). A detailed explanation and evaluation of the 3 Options is in Appendix B. In response to Council's March 28, 1995 resolution, legal staff were asked to consider whether the Director of Land Use and Development can facilitate the necessary increases in density by initiating the required rezoning applications once owners have arranged to purchase heritage bonus density or offered the City an on-site facility that meets City objectives. Legal staff concluded that the Director of Land and Development can only initiate the rezoning of a site in cases where there is clearly a significant and extensive public benefit. A rezoning of a site initiated by the City in any other situation would be open to legal challenge. Legal staff also indicated that Council and staff cannot advise the owners that they should pursue any one of the three options. For this reason, this report advises the owners what options are available to them. - 5 - Regarding Option 1, staff suggest that when processing a rezoning application to provide residual FSR to accommodate mezzanines that the proposed FSR double counting provisions for the IC-3 District should not apply in the calculation. This will benefit the applicants by reducing the amount of heritage bonus density that must be transferred or the extent of the requirement for an on-site facility imposed as a condition of a rezoning. Option 1 will not only remedy the deficiencies in residual FSR but also provide a corresponding public benefit in terms of supporting the City's heritage objectives. However, it will require the studio owners to work together on a rezoning application and to pay the fee (approximately $10,000). Option 2 has the following advantages: it is less costly and less difficult for studio owners to obtain an increase in permitted floor space for their building. Should they pursue Board of Variance appeals, owners can do so individually rather than working as a group. However, it will set a precedent for similarly increasing density in other Districts and circumstances (i.e. rewards exploitation of by-law provisions). There is also no clear public benefit associated with this option. In similar Board of Variance appeals, staff have advised the Board that they do not support the proposed density increase. Regarding Option 3, the proposed text amendments of the IC-3 District Schedule (in a companion report on Artist Studios) will allow for an increase in density without a rezoning application by the owners. This option does provide a clear public benefit (ie. the on-site public facility). However, it will require that the owners work together on the purchase of a unit for the facility. Comments from Owners Staff met with owners of studios in the two buildings and discussed the options available to them. The owners expressed interest in pursuing Board of Variance appeals and one individual, the purchase of heritage bonus density. Covenants - Notifying Owners The City has required covenants on title to advise prospective owners that a development permit is required for a mezzanine and thereby discourage the installation of unapproved and potentially unsafe mezzanines where there is insufficient residual FSR for future mezzanines. As a condition of development permit approval, covenants have been placed on the title of units with double height ceilings, that do not yet have mezzanines. The covenants advise owners that a development permit must be approved prior to installing a mezzanine. This advises potential purchasers of existing units. Council has directed staff to discontinue this practice for future development proposals where double counting is applied in the initial FSR calculation since there will then be sufficient floor space residual for future mezzanines. Staff suggest that a covenant, as required in the past, be placed on the title of properties where double counting has not been applied (i.e., in districts other than IC-3) as a condition of the development application. The covenants should, however, be amended to also explicitly advise owners that there may be insufficient FSR to accommodate a mezzanine. Double Counting in the C-3A District Staff recommend that double counting of double height spaces be extended to the C-3A District, as is currently proposed for the IC-3 District. Similar to the IC-3 District and the Downtown District, there is a very loose fit in the C-3A District between the envelope, as determined by setbacks and the permitted height, and the mass of the building at - 6 - maximum FSR assuming standard floor-to-ceiling heights of 2.45 m-3.7 m (8 ft.-12 ft.). This is appropriate in the C-3A District because it allows for a variety of building types and heights depending on the context of the site. The C-3A District applies to such diverse locations as Central Broadway, Granville Street between West 4th and West 16th, and part of West 8th Avenue in Fairview Slopes and the Burrard Slopes. The C-3A Guidelines call for high rise development in some locations and, low rise development elsewhere. A C-3A development at 1529 West 6th Avenue, currently under construction, deleted mezzanines on two double height floors to ensure the building would meet the FSR limits of the zoning when the building was under final development permit review this past summer. The current zoning did not allow for Planning staff to require that there be adequate residual FSR to provide for the provision of mezzanines. For this reason, staff have concluded that it would be prudent to consider extending double counting to double height floor spaces in C-3A, at the same time that Council considers a similar proposal for the IC-3 District Schedule. The developer has now purchased an abutting site to provide residual FSR for mezzanines in all double height spaces. The proposed double counting provision will apply to residential uses and artist studios when the floor-to-ceiling height exceeds 3.7 m (12 ft.). The recommended C-3A text amendment is attached in Appendix A. The double counting provision is worded similarly to that proposed for the IC-3 District Schedule. Although the C-3A District Schedule includes considerable discretion in height and FSR, the context of development proposals is not so complex as commonly occurs in the Downtown District (DD). While double counting is a more explicit and limiting approach, it is recommended for C-3A but may not be recommended for the DD because of different circumstances in the DD. CONCLUSION Two artist 'live/work' studio developments have been built with double height spaces but lacking sufficient residual FSR to accommodate the addition of mezzanines. Last year, Council indicated an interest in how the City could assist the owners of studios lacking sufficient density to install a mezzanine. Although legal staff have advised that the Director of Land Use and Development cannot facilitate the increases in density by making the necessary rezoning applications, this report does include other options that the owners can pursue. In the interest of minimizing the number of future developments that will lack sufficient residual FSR, the report recommends the referral to public hearing of a text amendment for of the C-3A District Schedule that will introduce double counting for double height spaces. Covenants are also recommended to notify purchasers of future projects that a development may have insufficient FSR for the addition of mezzanines. * * * * * APPENDIX A Text Amendment C-3A District Schedule - amend section 4.7.2 of the C-3A District Schedule as follows (new text is in italics): - 7 - "4.7.2 The following shall be included in the computation of floor space ratio: (a) all floors of all buildings including accessory buildings, both above and below ground level, to be measured to the extreme outer limits of the building. (b) in the case of dwelling uses, Artist Studios - Class A and Artist Studio - Class B, where the distance from a floor to the floor above or where there is no floor above to the top of the roof rafters or deck exceeds 3.7 m, an additional amount equal to the area of the floor area below the excess height except the additional amount shall not be counted in the case of undeveloped floor areas beneath roof elements which the Director of Planning considers to be for decorative purposes and to which there is no means of access other than a hatch, residential lobbies and mechanical penthouses." APPENDIX B PAGE 1 OF 3 Option 1 Purchase Heritage Bonus Density (e.g. from B.C. Hydro or Former Library Bonus Density) Necessary to Provide Floor Space Increase Required Process: - owners arrange to purchase heritage bonus density, subject to rezoning. - the owners file a rezoning application for their site and building to permit transfer of this additional FSR. - Council amends, for this special case the "Transfer of Density Policy for Heritage" to permit transfers from the Downtown District, West End and Central Broadway to the IC- 3 District. - subsequent to rezoning approval, individual owners may make permit applications, as and when mezzanines desired. - density for the purpose of calculating the required amount of residual FSR would assume that the site's permitted FSR is 3.0 rather than 2.5 as proposed in the forthcoming IC-3 zoning amendments. Pros - provides a public benefit. - heritage bonus density is readily available for purchase and transfer Cons - establishes a precedent for transferring density to industrial-commercial Districts. - requires a group of owners to act together to purchase heritage bonus density and make applications. - preparing rezoning application will be expensive for property owners ($10 000 or more for rezoning fee). APPENDIX B PAGE 2 OF 3 Option 2 Density Increases Without a Requirement for a Public Benefit Process: - 8 - - the owners initiate rezoning of their site and building to permit a higher density to accommodate the addition of mezzanines. - owners subsequently make permit applications, as and when mezzanines desired. - As an alternative to rezoning, density could be increased through successful appeals to the Board of Variance. Pros - less cost to owners (i.e. only rezoning application fee). - individuals can initiate Board of Variance appeals rather than acting as a group. Cons - inequitable to other property owners and developers who have 'played by the rules' (e.g. rezoning of 272 East 4th Avenue). - no public benefit such as a non-profit cultural amenity or low cost rental studios. - sets precedent for similarly increasing density in other Districts and circumstances (i.e., rewards exploitation of by-law provisions). - in similar circumstances, staff have not supported density increases without a requirement for a public benefit. Option 3 Density Bonus and the provision of an on-site facility (e.g. low cost rental studio or non-profit cultural facility) reflecting City Objectives (Proposed Policy 7 Per Council Report on Mezzanine Dated February 9, 1995). Process: - City initiates text amendment of the IC-3 District Schedule to permit the relaxation of FSR (floor space ratio) to accommodate the addition of mezzanines in cases where a public exaction such as affordable rental unit(s) or a non- profit cultural facility is provided. - subsequent to text amendment approval, owners submit development and building permit applications. - A real estate analysis by staff determines the 'value' of the increased density and ensures the rental unit(s) or cultural facility has an equivalent 'value'. - The owners convey to the City the rental unit(s) or space for cultural facility. - density for the purpose of bonus computation would assume that the site's permitted FSR is 3.0 rather than 2.5 as proposed in the forthcoming IC-3 zoning amendments. APPENDIX B PAGE 3 OF 3 Pros - provides a public benefit in exchange for an increase in FSR beyond the maximum of 3.0 currently permitted. Cons - requires a group of owners to act together to purchase a studio(s) for either rental or cultural facility and make applications. - requires more City staff time to negotiate legal agreements - 9 - for securing the facility . - preparing rezoning application will be expensive for property owners ( $ 1 0 0 0 0 o r m o r e f o r r e z o n i n g f e e ) . APPENDIX 'C' Page 1 of 1 Projects Requiring Residual FSR for Mezzanines Projects Activity Status 330 East 1st Avenue -Board of Variance -requires an additional (IC-3) (March 8, 1995) 0.3 (approx) FSR to approved 5,638 square provide full sized feet of additional lofts for all double floor space height studios -staff supported the appeal because staff had miscalculated FSR and prior to issuance of permit, reduced the permitted floor space by 5,638 square feet 272 East 4th Avenue -Council approved -no further action (IC-3) (April 27, 1995) a required rezoning to increase the site's density to accommodate mezzanines 1850 Lorne Street -Board of Variance -requires an additional (IC-3) (August 9, 1995) 0.3 (approx.) FSR to approved 678 square provide full sized feet to accommodate lofts for all double mezzanines height studios -this floor space is equivalent to the amount that would be excluded under the forthcoming artist studio zoning amendments 1529 West 6th -developer purchased -no further action (C-3A) abutting property to required provide residual FSR for mezzanines