Floor Area Bonuses Allowed for Mixed-Used Properties Under the Philadelphia Zoning Code

The first part of this series on “zoning” bonuses in the city of Philadelphia looked at the Mixed-Income Housing, Green Roof, and Fresh Food Market Bonuses (see “Density and Dimensional Bonuses Allowed for Mixed-Used Properties Under the Philadelphia Zoning Code”). In Part Two, we explore Floor Area Bonuses provided under the Mixed Incoming Housing, Green Building, and Underground Accessory Parking & Loading Bonuses, which are available, in whole or in part, to properties with a zoning classification of CMX-3, CMX-3 within the Transit-Oriented Development Overlay (TOD), or CMX-4.

The CMX-3 zoning classification was created to accommodate larger-scale commercial uses and retail.

The TOD was designed to promote increased use of public transit and create dynamic neighborhoods around transit stations. Currently, there are four Market-Frankford Line stations which are included within this overlay district: 46^th Street Station, Erie-Torresdale Station, Allegheny Station, and Spring Garden Station. Lots within 500 linear feet from the entrance or exit stops are within this district.

In the TOD, taller buildings with lower parking requirements are allowed by-right, and there are requirements for active ground-floor uses (storefronts), and prohibitions on certain uses like surface parking lots.

CMX-4 classification covers the Center City Commercial Mixed-Use, which is intended to accommodate a broad range of non-residential uses.

Mixed-Income Housing

Sections 14-702(2) through 14-702(4) of the Philadelphia Zoning Code establish a Mixed-Income Housing Bonus that provides “bonuses” for gross floor area, building height, and housing unit density if the property owner either agrees to designate a certain portion of dwelling units as affordable under the Philadelphia Zoning Code or makes an in-lieu-of payment to the Philadelphia Housing Trust Fund.

CMX-3, CMX-3 in TOD, and CMX-4 zoning districts are eligible for floor area bonuses through the Mixed-Income Housing Bonus.

Properties in the CMX-3 and CMX-4 districts which include Moderate Income can receive up to 150% increase in floor area and properties which include Low Income can receive up to a 250% increase in units.

Properties in the CMX-3 in TOD zoning classification can receive 200% if Moderate Income units are provided, whereas 300% can be earned for including Low-Income units.

Alternatively, property owners can make a payment to the City of Philadelphia to receive the Mixed-Income Bonus instead of including affordable housing units. To do so, the property owner must sign an agreement with the City’s Department of Planning and Development (DPD) and make a payment to the City before the building permit may be issued.

Payment is calculated based upon the zoning district, category of bonus, and level of affordable housing being offered.

In the CMX-3, CMX-3 in TOD, and CMX-4 zoning district, the payment amount is the greater of: 1) the lot area (in square feet) multiplied by $20 for the Moderate Income bonus or by $24 for the Low-Income bonus; and 2) the number of additional dwelling units earned through the bonus multiplied by $25,000 for the Moderate Income bonus and by $30,000 for the Low-Income bonus.

To apply for the Mixed-Income Housing Bonus, the property owner must first obtain a zoning permit from the City’s Department of Licenses and Inspections (L&I).

Before applying for the zoning permit, the property owner must submit a completed Mixed-Income Housing Zoning Bonus Applicant Acknowledgement Form to the City’s Department of Planning and Development (DPD).

In the completed form, the property owner acknowledges the requirements which must be met by the property owner in connection with the Mixed-Income Housing Bonus.

After the completed form is signed by a representative from DPD, the property owner will submit the completed form along with the zoning permit application to L&I.

If the property owner intends on building affordable units, when the property owner submits the building permit application to L&I, the property owner must also provide: 1) an affordable building plan; 2) a draft of the recordable instrument in the form of a restrictive covenant in favor of the City committing to the requirements of the Mixed-Income Housing Bonus; and 3) a statement of compliance issued by DPD for any requirements DPD imposes to secure and monitor the property owner’s satisfaction of these governmental requirements.

If the property owner intends on making a payment in lieu of building affordable units, when the property owner submits the building permit application to L&I, the property owner must also include with the building permit application: 1) a copy of the fully executed written agreement entered into between DPD and the property owner committing the property owner to make payment in consideration for obtaining the Mixed-Income Housing Bonus; and 2) a copy of the deposited check tendered by the property owner to the Philadelphia Housing Trust Fund in the amount set forth in the written agreement.

Green Building

Both CMX-3 and CMX-3 in TOD can earn an additional 50% of the gross floor area for a LEED Gold certified green building and 100% for a LEED Platinum-certified building.

Whereas, a CMX-4 property can earn up to 100% additional gross floor area for a LEED Gold certified green building and 200% for a LEED Platinum-certified building.

To apply for the Green Building Bonus, applicants must submit documentation sealed by a Leadership in Energy and Environmental Design Accredited Professional (LEED-AP), confirming that the building or site has been designed for certification at the LEED Platinum or Gold levels.

The LEED rating program is a four-tiered credit-based system that awards points based on compliance with various aspects of sustainability. LEED Gold certifications are awarded if a building or site amasses between 60-79 points. The LEED Platinum certification, the highest certification, is awarded if a building or site earns 80 or more points.

Applicants must provide documentation stating a preliminary review of the project design and elements confirm that it will earn enough points to be certified at the Gold or Platinum level by an appropriate certifying agency.

Furthermore, the applicant must enter into an agreement with the City confirming that the building or site will complete the LEED certification and commissioning process at the Platinum or Gold level.

If the building or site fails to be commissioned at the level for which the bonus has been awarded, the applicant must make improvements to the design, equipment, or operation until commissioned at that level, or be subject to violations of the Philadelphia Zoning Code.

Transit Improvements

Properties in the CMX-3 in TOD and CMX-4 zoning districts are eligible to use the Transit Improvements Bonus as provided in Section 14-702(8) of the Philadelphia Zoning Code.

The Transit Improvements Bonus allows property owners to increase the floor area by up to 100% in the CMX-3 in the TOD overlay and up to 200% in the CMX-4 zoning district.

In order to receive the Transit Improvement Bonus, applicants may include any of the following:

• New access easements or improvements to connecting passageways, mezzanines, or concourse areas;
• Constructing a new rail, subway, trolley transit or water taxi station;
• Extending the concourse of an existing rail, subway, or trolley transit station or expanding an existing water taxi station;
• Permanent structural improvements, not including routine maintenance or repairs, to an existing rail, subway, trolley transit, or water taxi station or stop; or
• Streetscape improvements in excess of the minimum code requirements that enhance pedestrian and bicycle connections to an existing rail, subway, trolley transit, or water taxi station or stop, with such streetscape improvements being approved by the Commission for the provision of safe and attractive pedestrian and bicycle routes to transit.

The applicant must submit a letter from the appropriate transit authority confirming that the transit authority approves the portion of the project that will be constructed on its property.

Applicants must post a bond or letter of credit in an amount equal to 100% of the estimated cost of constructing the transit improvements in a form and with financial entities approved by the City.

In addition, the transit improvements must be completed upon issuance of the certificate of occupancy for the first permanent structure on the property, and the bond or letter of credit must be kept in force until the completion of the improvements.

Underground Accessory Parking

Properties in the CMX-3 in TOD and CMX-4 zoning districts are also eligible to use the Underground Accessory Parking Bonus as provided in Section 14-702(9) of the Philadelphia Zoning Code.

The Underground Accessory Parking allows property owners to increase the floor area by 50% in the CMX-3 in the TOD overlay and up to 200% in the CMX-4 zoning district.

This bonus is available regardless of whether accessory parking is required as detailed by Section 14-800 of the Philadelphia Zoning Code.

To be eligible for the bonus, at least 75% of the accessory parking constructed must be for use of residents and no more than 25% of the spaces can be rented to non-residents.

The gross floor area of the underground parking (including ramps) must be at least fifty 50% of the gross floor area of the ground floor of the primary building on the property where the underground parking is located.

None of the bonus space gained from underground parking may be used to construct additional parking.

—Clementa Amazan, an associate at Nochumson P.C., assisted with preparing this article.

Reprinted with permission from the November 2020 edition of Commercial Leasing Law Strategy © 2020 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382, reprints@alm.com, or visit www.almreprints.com.