27 C20-2023-026 - Live Music and Creative Space Bonus Phase 2 Staff Report — original pdf

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C20-2023-026 ORDINANCE AMENDMENT REVIEW SHEET Amendment: C20-2023-026 Live Music Venue and Creative Space Bonus Phase 2 Description: Amendments to Title 25 of the City Code to create a new Creative District combining district with provisions for creative space and music venue preservation, modified site requirements, and density bonuses for affordable creative space. Background: Initiated by City Council Resolutions 20220728-094 and 20220901-089, and reaffirmed by City Council Ordinance No. 20230921-103 and Resolution 20240229-060. On July 28, 2022, the City Council adopted Resolution No. 20220728-094 initiating changes to establish the criteria to be a Live Music Venue to and support the creation of a live music venue bonus and incentive program for new and existing venues. On September 1, 2022, the City Council adopted Resolution No. 20220901-089 initiating changes to develop and adopt clear land use definitions and to create a bonus and incentive program for broadly defined creative spaces. These Resolutions are being addressed concurrently. Revised definitions were approved on September 14, 2023, in Ordinance 20230914-097. Ordinance No. 20230921-103 and Resolution 20240229-060 reaffirmed City Council’s commitment to the creation of a density bonus and district program to support live music and creative space districts and the preservation and incentivization of affordable creative space. Summary of Proposed Code Amendment: The proposed code amendments will create a new combining district for an affordable creative space bonus program and: 1. Is available city-wide on parcels in majority commercial districts that have been rezoned to add the new combining district designation as areas that include existing or planned clusters of creative space use structures and sites, through a process including: minimum size requirements of three (3) acres; minimum contributing creative space sites of 25 percent of total sites in district; and review from the Housing Department and Economic Development Department. 2. Defines the following land uses as Creative Space uses: 1. Art Gallery; 2. Art Workshop; 3. Cocktail Lounge; 4. Cultural Services; 5. Performance Venue; 6. Personal Improvement Services; and, 7. Theater 3. Requires the following use requirements for developments in creative district combining districts: 1. Along at least 30 percent of building frontage along the principal street, the building must be reserved for affordable creative space uses in ground-floor spaces; 1  C20-2023-026 2. At least 25 percent of ground floor gross leasable area in the building must be dedicated to affordable creative space; and, 3. Development must comply with protections consistent with Existing Non- Residential Space provisions of 4-18-31 for existing creative space uses in existence on the site for at least 12 months; the developer must: 1. Redevelop the site to replace all existing creative spaces with creative spaces of comparable size; 2. provide current creative space operators with: 1. notice and information about the proposed development on a form 2. a payment that equals the average rent payments for six months of rental approved by the director; payments; and 3. grant a creative space operator the option to lease a creative space of comparable size following the completion of redevelopment. 4. Requires an affordable lease for the the creative space operator returning to a redevelopment for ten (10) years; defines affordable creative space as the lesser of 50% of average retail space rent for the City of Austin, or a fixed ratio of annual revenues considered typical of and sustainable for the type of creative space; and limits year-over-year rent escalation to 5% or less for any creative space tenant. 5. Allows a development that provides on-site affordable creative space or pays a fee in- lieu for the preservation of an existing venue in the same district to be eligible for 30 feet of additional height above the maximum height allowed by the base zoning, up to 90 feet in total height and exemptions from the following site development standards: 1. Minimum site area requirements 2. Maximum floor area ratio 3. Maximum building coverage 4. Minimum street side yard setback and interior yard setback 5. Minimum front yard setback 6. Modifies the applicability of Article 10 Compatibility Standards and creates compatibility requirements for a participating development as follows: 1. Exemption from Article 10 (Compatibility Standards) Subchapter C 2. A 25 ft compatibility buffer that complies with Section 25-8-700 (Minimum Requirements for Compatibility Buffers) 3. Screening for certain objects including vehicle lights, mechanical equipment, and refuse collection areas Code Amendment Text: See attached background information. Staff Recommendation: Recommended The Economic Development Department supports adopting this density bonus combining district as important Council-recommended actions to support preservation and new development of affordable space for live music venues and creative spaces. These tools support the regulatory changes identified in City Council Resolutions 20220728-094 and 20220901-089, including development bonuses designated districts to support creative spaces, and reaffirmed in City Council Ordinance No. 20230921-103 and Resolution 20240229-060. 2 C20-2023-026 Rather than prescribe areas as creative districts directly, this unmapped district creates a tool that can be used by property owners in partnership with creative space operators, artists, and musicians, to preserve and enhance clusters of live music, art galleries and workshops, theaters, and performance spaces, with strong community oversight through the rezoning process. Proposed criteria for applying this combining district are substantial, and intended to ensure that applications of the creative district combining district will be focused on areas with significant support from creative community and neighborhood stakeholders. Board and Commission Actions March 18, 2024 – Recommended by the Arts Commission March 20, 2024 – Recommended unanimously by the Codes and Ordinances Joint Committee with Commissioners Greenberg and Azhar absent April 1, 2024 – Briefing to the Music Commission July 1, 2024 – Recommended by the Music Commission August 13, 2024 – to be reviewed by the Planning Commission. Council Action August 29, 2024 – to be considered by City Council City Staff: Donald Jackson, Economic Development Department, (512) 974-2214 donalde.jackson@austintexas.gov 3  Affordability Impact Statement Live Music Venue and Creative Space Bonus Phase 2 Case number: C20-2023-026 Initiated by: Resolution No.(s) 20220728-094 and 20220901-089 Date: 6/27/2024 Proposed Regulation The proposed amendment would create a new combining district for an affordable creative space bonus program available upon request through a zoning application. It would include the following components: - Requires the designation to be applied to more than one parcel to meet the definition of a creative district. - Requires 30% of building frontage and 25% of ground floor to be for affordable creative spaces. - Requires protections for existing creative spaces, including replacement, notice, rent assistance, and leasing - Requires residential and hotel developments near music and performance venues to conduct a sound - Requires leases to be affordable for 10 years, with rent at 50% of average city retail space rent or a sustainable options. assessment and disclose to future residents. ratio and limited annual increases. - Allows for an extra 30 feet in height and exemptions from site development standards for developments providing affordable creative spaces or a fee in lieu of the affordable space. - Provides for exemptions from certain compatibility standards, replaced with a compatibility buffer and screening requirements. Land Use/Zoning Impacts on Housing Costs The proposed changes would have a neutral impact on land use/zoning related housing costs. This would establish an optional density bonus program available upon request that would require review by city staff, the planning commission, and City Council. As part of the staff review, the Housing Department will evaluate the request in accordance with the goals of the Austin Strategic Housing Blueprint and assess any negative impact to existing affordable housing. Impact on Development Cost The proposed changes would have a neutral impact on development costs. Each proposal will be evaluated individually, with the Housing Department ensuring that the creative district designation does not negatively affect existing and future multi-family developments. Sound Assessment requirements may add costs for multi-family developments within 600 feet of the creative district. Impact on Affordable Housing The proposed changes would have a neutral impact on affordable housing. This creative district density bonus program could compete with other density bonus programs specifically designed for affordable housing, like DB-90. However, the case-by-case evaluation may deem it appropriate in historically commercial districts where housing is less suitable. The Housing Department will review each case and provide recommendations to the Planning Commission and Council. Other Housing Policy Considerations None. Manager’s Signature ______ _______