[BoulderCouncilHotline] Community Benefit Issues

[Wallach, Mark]

In connection with Tuesday’s discussion of the Community Benefits program, I have a number of questions relating that I hope can be addressed at our meeting. In no particular order I hope that we can discuss the following:

1) What is the impetus for this program when community outreach indicates that 74% of respondents do not wish to see it go forward? And if it does go forward the bulk of the requested criteria for a program of this type are enhanced setbacks, limitations on upper floor use and special protections for important view corridors. Are any of those criteria being built into the program? In light of these responses, what is the argument for expanding Appendix J beyond the current area, which can now at least be treated as an experiment to see how the proposed policies will work?

2) I am a bit confused about the distinction between small businesses, arts organizations and human services organizations. Are they not all being treated similarly, or will the latter two categories be receiving more substantial discounts from market rents? If not, will landlords be receiving a special bonus for providing affordable commercial space to an arts group or human services provider? Is there a distinction in how we will treat non-profits vs. for-profit small businesses? If none of these are the case, why the separate categories for what should simply be potential users of affordable commercial space?

3) As we do not return cash in lieu payments after 15 or 20 years, or let affordable housing return to market rate housing after a fixed period of time, what is the rationale for even considering having affordable commercial space return to market rate?

4) If I correctly remember the covenant at 30 Pearl (and my memory may be untrustworthy here), there were provisions that if the developer could not obtain an affordable commercial tenant within a specified period of time he could lease to a market rate tenant. If my recollection is correct, do we contemplate a similar structure, and, if so, would this not be defeating the purpose of the program?

5) Two critical questions: i) What is the contemplated discount to market rents that will be required to be considered affordable commercial space? ii) How will market rents be calculated? Will high-end office space, the most expensive space in Boulder,  be a component of the calculation of market rents, thereby driving up the base rent figure? As a hypothetical: if market rate is defined as $50 per square foot due to the inclusion of high-end offices, a discount of 25% would leave an “affordable” commercial space rent of $37.50, which is hardly affordable for most of the users contemplated by this program.

6) The issue of the eligibility of national chains is difficult. While we do not want to exclude businesses owned by women or people of color, do we really want to give height bonuses for a Burger King or another Walgreen’s? Is this consistent with what most people would consider to be community benefit? Please discuss.

7) What will be the relationship between the amount of discounted rent for the affordable commercial space, versus the additional rent generated by one or two floors of valuable top floor and penthouse space? What will be the correlation between what we receive and the extra benefit the developer receives? I would argue that the rent relief received should be at least 50% of the additional rent generated, but I think there should be some guiding principle here, whatever the number.

8) Would it not make sense to exclude arts groups and perhaps human services groups from the 3,000 square foot limitation? A performing art facility needs a bit of room. Has this been considered?

9) Will outdoor arts facilities be in addition to, or a component of the open space the developer is required to provide? If the latter, we are granting a valuable height bonus for open space that would be provided anyway. In addition, I find it difficult to believe that we are getting good value by exchanging up to two floors of additional residential space for an open-air sculpture park. It is not that they are not desirable or beneficial, it is a question of whether the benefit is commensurate with what we are giving away in additional height and revenue.  Please discuss.

10) In order to incentivize the provision of on-site affordable commercial space and/or affordable housing, do we not need to take another look at cash in lieu, to put this option on an equal footing with this proposed program, and to ensure that it is not the automatic default option?

11) There was not too much discussion of purely commercial buildings other than to suggest that linkage fees could be increased to compensate for additional height. Housing, both market and affordable, is a demonstrated need in Boulder. What is the rationale for applying this program to commercial structures, and what is the contemplated increase in the linkage fees if we were to do so?

12) On the theory that, despite the desirability of affordable commercial space, affordable housing remains the top priority in Boulder, is there any way to weight the program so that on site affordable housing is the most likely choice, not the least?

Thanks for your time and hard work on this complex subject. I look forward to our conversation on Tuesday.

-------------- next part --------------
An HTML attachment was scrubbed...
URL: https://webappsprod.bouldercolorado.gov/mailing-lists/mailman-archive/bouldercouncilhotline/attachments/20200824/402f0b6f/attachment.html