UPDATED March 1, 2017
Mayor Rahm Emanuel's proposed changes to the Chicago zoning code's downtown floor area bonus system and downtown zoning district geography were approved by City Council on Thursday, May 18, 2016.
Announced in early 2016 as part of the mayor's goals for equitable neighborhood development leveraged by central area growth, the changes simplify and update the downtown floor area bonus system; provide new funding sources to encourage commercial development in neighborhoods lacking private investment; and accommodate ongoing central area growth through an expanded downtown zoning district. The changes become effective June 1 for most new construction projects.
The main components of the ordinance are identified below.
Previous provisions in the zoning code to increase the size of downtown construction projects were regulated by a 2004 ordinance that identified a variety of on-site amenities that were theoretically intended to benefit the public. The 20 different types of available bonuses were mostly design-based, meaning a construction project could include a setback, wintergarden, green roof or other features to increase the density of a project. Between 2012 and early 2016, 24 downtown projects used 38 bonuses to add about 17 percent more space, or about 2 million square feet.
Bonuses for individual projects were, and will continue to be, allocated through a higher floor area ratio (FAR), which reflects the total square footage of the building divided by the area of the lot. The illustration at left shows how a building with a setback at the base can achieve a 1.0 FAR bonus for an additional 36,000 square feet of space. Like virtually all design-oriented bonuses, the additional value provided to the property owner by landscaped space for use by tenants would likely justify its expense without the bonus.
The new provisions offer a FAR bonus through a single voluntary payment into a Neighborhood Opportunity Bonus system. The equation for determining the bonus payment under the simplified system is as follows:
Cost of 1 square foot of floor area = 80% x median cost of land per buildable square foot
Using the illustrated example at left with a hypothetical buildable square foot cost of $43, the bonus contribution equation would be 36,000 square feet multiplied by 80% of $43 ($34.40).
36,000 x $34.40 = $1,238,400
The refinements also expand bonus eligibility to the entire downtown area, versus the current restriction within areas identified by high FAR in the code.
New construction projects seeking FAR bonuses will be processed as Planned Developments, a zoning designation that provides additional public scrutiny for proposed construction projects. The review process for new projects will also be further refined to foster excellence in design and the inclusion of public amenities.
Payments for FAR increases will be allocated into three new development funds described below, each with a specific purpose that supports neighborhoods, city landmarks, and local infrastructure.
Neighborhood Opportunity Fund: Will receive and allocate 80 percent of all bonus contributions to support development projects within under-served neighborhood commercial corridors, including grocery stores, restaurants, and cultural facilities. Eligible costs would include site preparation and assembly, public improvements, design, and employee training programs, among others expenses. The funds will be spent in special "Investment Zones," which are areas of greatest need as determined by census data. Distributions for individual projects would align with community-based goals in the form of grant awards to private and public agencies. Individual awards exceeding $250,000 will require City Council approval. Additional funding eligibility information is available here. Businesses and entrepreneurs can apply for funding here.
Citywide Adopt-A-Landmark Fund: Will receive and allocate 10 percent of all bonus contributions to support the restoration of structures designated as official landmarks by City Council. The previous Adopt-a-Landmark bonus was restricted to 2,000 feet from the development site downtown. A list of Chicago Landmarks can be found here.
Local Impact Fund: Will receive and allocate 10 percent of all bonus contributions to support improvements within one mile of the development site generating the development funds, including public transit facilities, streetscapes, open spaces, river walks, and other sites, including landmarks. Most of the previous bonuses for similar improvements were restricted to 2,000 feet from the development site.
Using the $1,238,400 contribution from the example illustrated at left, 80% would be allocated to the Neighborhood Opportunity Fund ($990,720), 10% would be allocated to the Citywide Adopt-A-Landmark Fund ($123,840), and 10% would be allocated to the Local Impact Fund ($123,840). Payments would coincide with building permit applications involving one or more phases of the construction project.
Zoning helps to coordinate neighborhood development by regulating the uses and amount of buildable square footage within individual zoning districts. Neighborhood development patterns are reflected through a variety of business (B), commercial (C), residential (R) district designations, each of which has additional provisions that regulate use and density.
|Chicago's central area has its own downtown (D) district designation due to its unique attributes as the employment, transportation, cultural, and residential nexus of the region. Ongoing development has expanded the geography of these characteristics beyond the established boundaries of the district since it was designated more than a decade ago.
To appropriately address and accommodate ongoing central area market pressures, four areas along the perimeter of the district will be available for potential D district zoning. Each area is well-served by public transit and possess other features that align with the development patterns of the downtown area. Individual maps of the proposed areas are below. The maps include potential FAR parameters for specific sub-areas.
Zoning in proposed expansion areas will not be proactively changed to a D district. Instead, construction projects within the areas could apply for a D district zoning designation that appropriately reflects the size and scale of nearby properties and ongoing development trends. If each project is approved for the D district designation by the Chicago Plan Commission and City Council, additional density will be made available through the Neighborhood Opportunity Bonus which, in turn, would allocate funds for under-served neighborhood commercial districts, designated landmarks, and local infrastructure.
Existing D district zoning boundaries and proposed expansion areas
For questions or comments about the Neighborhood Opportunity Bonus, please email email@example.com.