Commercial Space/Affordable Housing Mix to Change

TELLURIDE – Council voted 4-3 on Tuesday to approve on second reading controversial amendments to the Land Use Code that would waive some affordable housing mitigation requirements for developers who provide additional commercial and office space in Planned Unit Developments located in the downtown commercial core.

The ordinance passed after a tense and protracted debate among community members and council during which amendment supporters urged council forward on the measure as a means to improve the town’s economic vitality.

“I’d encourage the town council to support the initiative,” said architect Peter Lundeen.

Detractors categorized the changes as a “giveaway” to developers, a forfeiture of council oversight of town planning matters and, perhaps most emphatically, incomplete.

“The PUD process really is something where you’re taking the existing guidelines and you’re throwing them out, and that’s OK as long as you’re solving some problems,” said Michael Saftler, who maintained the ordinance needed additional work before passage.

The purpose of a PUD is to allow for design and development flexibility that represents a departure from the town’s basic zoning requirements under its Land Use Code in exchange for significant public benefits such as the provision of common open space, affordable housing and historic preservation, among others.

Prior to the vote, developers were not required to apply for a PUD under any circumstance. Nor did they have incentive to, according to proponents of the changes, because building to the existing code was more profitable.

The old PUD regulations required that developers mitigate an ultimately cost-prohibitive amount of affordable housing and parking in proportion to the building’s total area of commercial space (including a required 35-foot minimum Vitality Setback from the front façade), while residential space in the same zoning district required no such affordable housing and less demanding parking requirements.

As a result, the old rules effectively discouraged developers from building more than the minimum commercial space required, instead packing in more profitable residential units.

“The LUC forces a developer doing his math to do all residential and no commercial [building],” said Planning and Zoning Commissioner Kathy Green. She explained that according to those regulations a developer who built a 3,000-square-foot condominium would be required to provide a single parking space for the unit, while a commercial space of equal size would demand between three and six spaces.

“We decided to come up with a program to say how can we get commercial on the second floor?” said P&Z Chairperson David Wadley. “We’re trying to make the community better. This all came out of this economic vitality discussion.”

The P&Z, joined by the Historic and Architectural Review Commission, arrived at the proposed changes after being directed by council in April to work on the PUD code revisions based upon the two committees’ mutually-agreed upon top five amendments to the LUC.

“The PUD Regulations today are very limited in comparison to other jurisdictions, and can be altered to allow for more variances and more public benefit. An example of this that has been discussed by the P&Z and HARC would allow for a variance to the floor area ratio in the Historic Commercial zone district, with the understanding that the [HARC] Design Guidelines can and will limit the overall bulk and mass allowed,” the two committees wrote to council in April regarding the long-range project.

The amendment could also allow for variances to provide for small incubator spaces for businesses, provide incentives for more infill development and also allow for the provision of more benefits outlined by the town’s Master Plan, such as more office and retail uses, they wrote.

P&Z and HARC then met for joint worksessions in June, July and August to hone the details.

Last month council approved the first reading of the ordinance conditional upon certain changes. Among those changes included the establishment of a required minimum of affordable housing mitigation based upon that amount required by the 35-foot Vitality Setback. Additionally, the Telluride Housing Authority must be consulted regarding any proposed affordable housing variances.

In addition, council requested that public notices for public hearings required in the PUD process include a detailed listing of all variances being sought in an application.

Mayor Pro-Tem Andrea Benda requested that all coinciding public benefits also be listed.

“We also will provide to the public these benefits, I think sometimes we forget that this is a negotiated agreement and that there are benefits to the public,” she said.

For Councilmember David Oyster, who had made a motion to continue the public hearing on the matter almost immediately after the discussion began, Benda’s request underscored the very reason he suggested the continuance in lieu of approving the ordinance.

As he explained in response to Councilmember Jill Masters’s question, “The whole idea is to get a better building and we’re not really giving anything up, what is the purpose of continuing this?” a delay would allow time for the public to raise its concerns about the ordinance.

“Just on the basis of Andrea’s request that the public benefit list be added, that in itself is just one good reason to continue this legislation, if you will, to a future date,” he said.

In support of Oyster’s position, opponents to passing the ordinance maintained that its details had not been honed finely enough to pass.

“The way that this is evolving is disconcerting. It seems to me that what the community should have an opportunity to address is a final document,” said Saftler.

“Even here today Andrea brought up some things that she thought should be changed,” he continued. “It is not appropriate to pass this on a final reading when you’re still tweaking.”

“Documents passed at second reading should have all the detail there, that’s when it should be passed,” said Rick Silverman. “I don’t think you’re there yet.”

“The end is not when you put it out for public comment,” said Green, underscoring that several public hearings on the proposed ordinance had already been held.

“I’m really sorry that some of you who are so critical of the process now were not there for every meeting,” she said.

“I think this document is ready to adopt with a few minor tweaks.”

Despite support from Councilmembers Thom Carnevale and Bob Saunders, Oyster’s motion for a continuance failed.

Instead a motion to approve the ordinance with minor, non-substantive changes passed with support from Mayor Stu Fraser, Councilmember Lulu Hunt, Benda and Masters.

Oyster opposed that motion. Carnevale joined him stating, “Adamantly no,” and Saunders, “double adamantly no.”