OK from Planning Commission sets up Council consideration for creative space incentives

The Planning Commission’s recent support for an incentive program for creative spaces in new developments gave City Council additional direction for how to address affordability for local arts spaces and the workers in those industries. Council is slated to conduct a public hearing and consider the ordinance change for the creative space combining district framework at Thursday’s meeting.

Late last month, the Planning Commission heard the details on the long-discussed incentives that would offer many of the same bonuses of the DB90 framework for affordable housing. Developers of projects at least 3 acres in size would be able to participate by providing deep rental discounts to music venues or other arts spaces that occupy at least 25 percent of the ground floor of the property.

The commission, which voted 7-2-1 to recommend the concept to Council, added three amendments to the item: one calling for considerations for including affordable housing in the projects; another advising looking into ways to address possible noise issues; and a final amendment asking Council to have staffers look at specific ways to preserve and encourage the creation of live music venues in the Red River Cultural District.

The RRCD consideration was perhaps the most nuanced and debated component of the item, in part because much of the district falls within Capitol View Corridors that limit the height of new construction in the area enough to negate any increases in floor area ratios that would encourage developers.

Commissioner Jessica Cohen said in many ways the push for creative space incentives was initiated to directly address the development and economic pressures facing music venues in the RRCD. With those properties ineligible for the program staff has created, she said more work needs to be done with that area in mind.

“The intent would be for a full regulatory, financial and operational option for the Red River Cultural District, because this as written is not going to apply even as a subdistrict. It’s a density bonus – it does nothing to preserve the music venues that are there,” she said.

Other commissioners expressed concerns about the structure and triggers of the program, including the requirement that eligible properties include at least some commercially zoned land. Commissioner Grayson Cox said the 10-year term on offering reduced rents seemed too short to grant aggressive incentives compared to the terms required for affordable housing incentives.

“I honestly can’t decide whether this is potentially some sort of loophole and that we’re missing something that’s going to grant DB90 entitlements, but for a lot less community benefits, or if this whole thing is slightly moot because of the whole 3-acre, mostly commercial requirement,” he said. “I can’t define what the impact is gonna be, and I think that’s the problem. I just don’t really understand where this applies or how it’s going to be implemented.”

Commissioner Jennifer Mushtaler also said the suggested rental rates of 50 percent of market prices likely aren’t enough of a reduction to attract creative and cultural spaces that typically operate on very thin margins. Mushtaler did seem more in favor of a possible rate of 5 percent of the occupant business’ total yearly revenue, though she also objected to the potential yearly rent increases of up to 5 percent.

“I’m concerned about the 50 percent of retail commercial real estate market rate, or the stabilized lease-to-revenue ratio based on industry average when it’s set at commercial real estate market rates. And, I’m also concerned about the 5 percent annual rent escalation cap,” she said.

“If you are that small, if we’re trying to protect these small-business owners and these creatives, their margins are not big.”

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Posted In: Planning, District 9