Recommendation
Direct staff to prepare a resolution to approve the fee in lieu of public use space calculation as described in the Discussion section of this report, and to return with an ordinance to approve the subject text amendment as shown in Attachment A.

The public hearing testimony has raised a broader policy issue questioning the adopted 20% public use space requirement. Staff recommends that the Mayor and Council direct staff to conduct further research on the issue and return with a recommendation for discussion as a separate agenda item.

Change in Law or Policy
When adopted, the ZTA will amend the Zoning Ordinance to: (1) allow for an open area as an alternative to public use space in office and industrial Mixed-Use Zone projects, and (2) allowing public use space to be provided on a proportional basis for expansions of existing development. When adopted, the fee in lieu of public use space resolution will establish the calculation for the referenced fee as required by Subsection 25.17.01.d.2. of the Zoning Ordinance.

Discussion
PROPOSED FEE IN LIEU OF PUBLIC USE SPACE CALCULATION:

The public use space requirement is a development standard in all of the Mixed-Use Zones. The RORZOR Committee recommended this approach as a way to achieve high quality development without the need for incentives like optional method development. The RORZOR Committee believed there should be some benefit to the public for any new Mixed-Use Zone development approval. The Committee also recognized that the public use space requirement could be an onerous burden on small lots and there may also be instances where the development might be better served without the need to provide some or all of the public use space on-site. Therefore, the RORZOR Committee recommended that a fee in lieu be created. The fee in lieu option may be requested by the applicant, but it is solely the discretion of the Approving Authority to accept or reject payment of the fee in lieu of providing public use space on site.

The fee in lieu calculation comprises the following two components, and the language of the draft resolution will be similar to the following italicized text:

Land Acquisition Contribution:
This component reflects the value of the land that is subject to the fee in lieu. It is determined by multiplying the subject property's per square foot assessed land value by the square footage of the required public use space.

Public Use Space Improvement:
This component reflects the cost of constructing public use space amenities, which is $3.00 per square foot of the required public use space. The cost per square foot will be adjusted annually to reflect the increase or decrease in the Builders Cost Index (BCI), as published by Engineering News Record, McGraw Hill Companies.

The $3 improvement fee is based on two recent Department of Recreation and Parks projects: Fallsgrove Park (Project 420-900-1B61) and Mattie J. T. Stepanek Park (Project 420-900-3A60). The amenities associated with these park projects align with those that might be constructed within public use space, e.g., garden plots, gazebos, picnic areas, pathways, passive areas, wooded areas, landscaping, etc.

At their October 12 meeting, the Mayor and Council requested information on other jurisdictions' fee in lieu of public use space (or similar) calculations. That information has been provided as Attachment B. The most similar calculation is used in Harford County, which uses 110% of the assessed land value, whereas the proposal for Rockville equals 100% of the assessed land value plus the $3.00 per square foot improvement component for amenities.

PROPOSED ZONING TEXT AMENDMENT (ZTA) TXT2010-00224:

The proposed text amendment consists of two segments, one of which would provide greater flexibility for Mixed-Use Zone projects that are principally office and/or industrial uses. The flexibility is designed to allow these types of Mixed-Use Zone projects to provide an "open area" as an alternative to "public use space" as defined in Article 3 of the Zoning Ordinance (See Attachment A). In the staff report to the Planning Commission (see Attachment C), staff recommended a few minor modifications to the authorized language to more accurately convey the intent.

After reviewing the ZTA on November 18, 2009, the Planning Commission recommended approval with modifications to the proposed language in Subsection 25.17.01.b. to apply the "open area" flexibility to the MXE Zone only (see Attachment D). This differs from the text proposed by the staff which applies the "open area" flexibility to all of the Mixed-Use Zones.

The other segment of the ZTA proposes to implement a proportionately-scaled application of the public use space requirement for expansions of existing development. Currently, small building expansions up to 50 percent of the existing gross floor area are already exempt pursuant to Section 25.08.07 d. of the Zoning Ordinance. However, expansions exceeding 50 percent of the existing gross floor area are required to provide the full public use space requirement of 20 percent. Because Rockville is virtually built out and 90% of permits are for renovations or expansions of existing buildings, this will be a recurring problem common to many sites in the City. This modification is proposed to address the issue of additional development on existing sites, as evidenced by applications that have been filed recently but have difficulty complying.

The proposed ZTA would allow for the public use space requirement to be applied on a proportionate basis in relation to the percentage of existing gross floor area expansion, up to the required 20 percent public use space. For example, under the proposed ZTA, a 75 percent increase in the existing gross floor area would equate to a 15 percent application of public use space (that is, 15 percent rather than the 20 percent public use space requirement). If the building expansion exceeds the 100 percent of the gross floor area, then the full public use space requirement must be met.

STAFF COMMENTS ON THE PUBLIC TESTIMONY:

Most of the public testimony has touched upon the broader policy issue of the adopted public use space requirement rather than the proposed fee calculation or the subject text amendment. Every speaker at the public hearing and all public written testimony criticized the adopted 20% requirement as being excessive. Staff agrees that the 20% public use space requirement appears onerous for a number of reasons. In general, Rockville's Mixed-Use Zones are urban, high-activity areas and were created to achieve compact, pedestrian-oriented development near transit. The 20% public use space requirement is more akin to new suburban rather than urban design and may have several unintended consequences, including, (1) preventing properties from maximizing their redevelopment potential and causing redevelopment sites to stagnate; and (2) constraining mixed-use and pedestrian oriented projects in site flexibility and design.

Several speakers commented on Montgomery County's public use space requirements. Staff notes that the County's recently authorized ZTA 09-08 proposes to create new Commercial/Residential (CR) Zones in the County. These CR Zones, along with the County's adopted Central Business District (CBD) Zones, only require 10% public use space for any standard method project. Apart from the subject ZTA, the Mayor and Council may consider initiating a separate ZTA for the purpose of modifying the public use space requirement. Staff recommends that the Mayor and Council direct staff to conduct further research on the issue and return with a recommendation for discussion as a separate agenda item.

Mayor and Council History
Both items were initially presented to the Mayor and Council on October 12, 2009. The proposed fee in lieu of public use space calculation was presented as a discussion item and recommended to be scheduled for a public hearing. The ZTA received authorization to be filed on October 12th. On December 7, 2009, the Mayor and Council held a public hearing for both the fee in lieu of public use space calculation and the proposed ZTA.

During the public testimony portion of the hearing, four individuals spoke. There were also ten separate pieces of testimony submitted while the record was open from December 7, 2009 (date of public hearing) through December 28, 2009. A summary of the public testimony (both verbal and written), along with staff comments, has been provided as Attachment E. In addition, all submitted written testimony exhibits have been provided as Attachment F.

Public Notification and Engagement
Pursuant to State law, the December 7, 2009, public hearing was advertised two successive times in the Gazette Newspaper on 11/25/09 and 12/2/09. In addition, notice was provided to all City civic associations, homeowner's associations, and other interested parties.

Boards and Commissions Review
Review of the Proposed Fee In Lieu of Public Use Space Calculation:

An earlier draft of the fee in lieu calculation was reviewed by the Recreation and Parks Advisory Board on January 22, 2009, and the Planning Commission on January 28, 2009. The current draft has been refined since that time and incorporates most of their recommendations. Their comments and the staff's responses were presented to the Mayor and Council at the October 12, 2009 meeting.

Planning Commission Review of the Zoning Text Amendment (ZTA) TXT2010-00224:

The Planning Commission reviewed the proposed ZTA during their November 18, 2009 meeting. Their recommendation to the Mayor and Council is shown in Attachment D.

Next Steps

• Introduction of Resolution & Ordinance - 1/25/10
• Adoption of Resolution & Ordinance - 2/8/10

Attachments

• ATTACHMENT A: Staff recommended version of the text amendment

• ATTACHMENT B: Other Jurisdictions' Fee in Lieu of Public Use space calculations

• ATTACHMENT C: Staff Report to the Planning Commission

• ATTACHMENT D: Planning Commission Recommendation to the Mayor and Council

• ATTACHMENT E: Public Hearing Testimony Summary Table

• ATTACHMENT F: Exhibits Submitted to the Record

Department Head:



Susan Swift, Director of Community Planning and Development Services
Approved on: 12/31/2009

City Manager:

Scott Ullery, City Manager
Approved on: 12/31/2009