PPD619SmartGrowthandUrbanSprawlHighRiseIncentives

DingwenChen,LavanyaRaghuraman,YingyiHu,ClareEberle
April23rd2104

DEPARTMENTOFCITYPLANNING
RECOMMENDATIONREPORT
__________________________________________________________________
CITYPLANNINGCOMMISSION
CASENO:
DATE:
April23,2014
CEQA:
TIME:after8:30AM
COUNCILDISTRICT:14
PLACE:DTLA
PLANAREAS:All

PUBLICHEARINGREQUIRED

OBJECTIVE

To recommend incentives to be incorporated in the revised zoning code for facilitating the
constructionofhighrisedevelopmentindowntownLosAngelesneartheConventioncenter.

SUMMARY

Disinclination on the part of developers to risk investment in highrise projects hasbeen

aggravated by the economic conditions of the Great Recession and particularly by the
elimination of the Community Redevelopment Agencies. As the economy gradually rebounds
from the Recession, investors and developers have been increasingly willing to undertake
projects Downtown however, there is still a cautious climate, leading to many new buildings
that are deemed economically safe but that do not provide adequate space for the economic
and population growth projected for the Downtown area. These buildings are typically seven
stories and under, as permitted byright. This report recognizes that in order to meet emerging
needs for more residences, commercial space and particularly hotel rooms in the Convention
Center andLASEDarea,itwillbeessentialforhigherriseconstructionamongsomebuildingsto
allow for forward looking densityintheurbancore.Whiletherearecurrentlysomemeasuresin
place to allow highrise development, marketconditionsanduncertaintyofreturnshaveresulted
in limited use of these measures. Instead, the city needs to provide incentives to facilitate
highrise construction to ensure that longterm needs are met. Of particular interest under the
objectives of this ordinance is the area adjacent to the Los Angeles Convention Center,asthese
parcels are farthest from the current economic centers of Downtown and thus undervalued as
potentialhighrisedevelopmentsites.
The fundamental goal of the following recommendations is to reduce costs and
streamline applicable processes such that construction over ten stories becomes financially
feasible and attractive, while still resulting in some of the upfront benefits and income that the
Cityhascometodependupon.
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April23rd2104

As such, Staff recommends changes to the Municipal Code to affect the area east of the
110 Freeway and north of the 10 Freeway. Currently zoned as public facilities, commercialand
residential uses, this area permits high rise constructions. Subject to the proposed ordinance,
parcels in this area will no longer be subject to parking requirements or height restrictions.
Transfer of Floor Area Ratio program will remain in place, with an adjustment of costs and
potential community benefits based on the recognition that highrise development itself can be
understoodasaPublicGoodasoutlinedintheGeneralPlan.
Further recommendations are to provide preset mitigation measures so as to streamline
and expedite approval negotiations to reduce exactions and impact fees for sequential levels of
height achieved to execute outreach to Downtown property owners in support ofprivateTFAR
negotiation and to commit a task force within Building Safety and Fire that recognizes the
elevated inspection demands of highrise steel construction and addresses shortcomings soasto
eliminatedelaysininspectionandapprovalprocesses.

RECOMMENDEDACTION

1. Zoning Changes Remove minimum parking requirement, exemption from constructing

helipad in lieu of other modern fire safety measures, direct Transfer of Air rights between
developers, Eliminate height restrictions as well as density restrictions and enforce minimum
densityrequirement.
2. Reduced approval process by creating a preset list of requirements to be completed by the
developer
3.Mixedusedevelopment
4. Incentivize developer for another development in other parts of the city along with the
approval process for the high rise construction. Expedited twoapprovalsoneincoredowntown
andoneinotherpartsofthecity
5. To pack hirise projects withpotentiallyveryprofitableprojectstoencouragethedeveloperto
investinhighrisedevelopment.
6. Section 14.5 for definition of Public Benefit to include provisions on site as community
benefit
7. Support to developers in terms of delivery and production line with expedited approval
process for modern construction technology by allowance of feasibility studies by external
agenciespriortotheapprovalprocess.
8.Percentagereductionsinexactionsandimpactfeesforeverybracketofheightachieved.

PPD619SmartGrowthandUrbanSprawlHighRiseIncentives
DingwenChen,LavanyaRaghuraman,YingyiHu,ClareEberle
April23rd2104

STAFFREPORT

BACKGROUND

Overview

Downtown is a financial, governmental,industrialandtransportationhubwhichisoneof

the few areaszonedforallowinghighriseconstructionsitthecity.Aftertheeconomicrecession,
most new housing projects are built as woodframed, mid and low rise apartments. This
squanders the opportunities for highrise buildings, which can contribute to a more dense and
vibrant downtown, facilitate economic development in the longrun, and provide muchneeded
housingandhotelaccommodationunits.

With the economy gradually recovering in recent years, there isanincreasingmarketfor

highrise residential and hotel buildings. Downtowns residential population is relatively small,
but it offers a great quantity of job opportunities, thus suggesting there may be a significant
housing gap. More pressingly, the development of the Convention Center and LASED have led
to enormous growth in business and tourism visitors, requiring many more hotel rooms in
Downtown in the future, as indicated in a recent report from the Citys Chief Legislative
Analyst. Hotels create significant revenue forthecity,andcanfurtherboostthetourismindustry
and provide job opportunities. However, officials and business leaders in the surrounding area
have repeatedly citedaseveredeficiency ofhotelroomsintheimmediateneighborhood,causing
visitors to search for hotels in other places such as the LAX and Santa Monica. In addition to
increasing costs, commuting time, and traffic, this diverts potential revenue from Downtown
businesses, hindering further positive economic and cultural impacts of activity at the
Convention Center and LASED. Therefore, to make Convention Center and LASED regionally
competitive and facilitate their positions as major anchorsforincomeandeconomicactivity,the
district needs to be enhanced with more amenities and accommodations, namely an increase in
hotelroomswithinwalkingdistanceoftheConventionCenter.
A number of highrise buildings have been built or soon will be Downtown, and
developers and businesses have cited potentialbenefitsfromthoseprojectsand predictthatthere
will be a trend for more highrise development in the future if the economy continues to get
better. Staff believes that facilitating highrise construction is critical tothefuture ofDowntown
and particularly the South Park district: doing so will foster a dynamic economy and contribute
to longterm smart growth goals through increased density and transitaccessible housing and
amenities.
City officials have recently brought attention to this issue by proposing, among other
solutions, a moratorium on types III,IV,andVconstruction(woodframe).Insteadofrestricting
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specific building types, Staff recommends the adoption of incentives into the Municipal Code
with the primary objective of makingrequirementsmoreflexible,whilemaintainingincomeand
benefitstotheCity.

ObstaclestoHighRiseConstruction:
Several factors contribute to hesitation among the development community to undertake
constructionthatexceedsbyrightprovisions.

TransferofFloorAreaRatioProgram:
Currently, the municipal code permits structures with a floor area ratio of up to13:1.
Higherrise construction is permitted through the Transfer ofFloorAreaRatioprogram(Section
14.5.1), whereby private developers may negotiate with the City to obtain additional FAR in
exchange for Public Benefits and fees. This program is designed to mitigate the impacts of
intense development, providing funding and practical mechanisms through which the City may
gain muchneeded amenities such as schools, parks, open space, streetscape improvements, and
other benefits to enhance the public realm where dense development is taking place. However,
the City now recognizes that the emphasis on mitigation is in fact counterproductive tocurrent
planning goals in Downtown: highrise (or intense) development, executed effectively, is and
will continue to beanimportanttoolforcomfortablegrowth,ensuringenvironmental,economic,
and social objectivesofwalkability,transitaccess,diversityofservicesandhousingchoices,and
facilities to meet needs of tourism (especially business and/or convention tourism). The TFAR
program can be reconfigured to recognize increased floor area ratio as an inherent public good
instead of as a condition inneedof mitigation,whilealsomaintainingitsuseasamechanismfor
garnering Public Benefits, as this program is critical in facilitating the Citys obtainment of
necessarypublicfacilitiesandinfrastructureimprovements.
The present list of Public benefits comprises of Density increase for a Housing
Development Project to provide for additional density, cemeteries, libraries, museums, fire or
police stationsorgovernmentalenterprises,mobilehomeparkswhereanytrailerormobilehome
is permitted, parks,playgrounds,orrecreationalorcommunitycenters,publicutilitiesandpublic
services uses and structures, except wireless telecommunication facilities andradioortelevision
transmitters, recreational vehicle parks and mobile home parks and finally shelters for the
homeless.

EngineeringChallenges:
Affordabilityisoneoftheconcernsthathinderthedevelopmentofhighrisedevelopment
in downtown. Since wood framed buildings can only reach seven storey, steel framed
constructions are required when it goes taller and can only becosteffectiveuntilapproximately
over 20 stories, which makes it less affordable for developers. While LAbased developers and
engineering companies are less comfortable with building highrise and less equipped to
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April23rd2104

undertake it efficiently, developers from other cities, such asVancouver,aremuchmoreusedto

it,however,someoftheirprojectsarestillhaltedbecauseoftherecession.

Exactions&ApprovalProcess:
Another block for highrise buildings results from time consuming and costly approval
process. Although most of Downtown areas are allowed to build projects that has a Floor Area
Ratio of 13:1, the density of Downtown is limited to 6:1 and developers who want to increase
their FAR to 13:1 are required to provide public benefits, or have to purchase TFAR from the
city or other developers, which is very expensive. Additionally, the approval process is
timeconsuming and complicated, usually lasts more than 12 month and requires a lot of
hearings. Therefore,manydeveloperstendtobuildlowerrisebuildingswhichcostmuchlessfor
exactionsandfeesandtakelesstimeforapprovingtheentitlements.
High rise construction above 75feetrequirestheprovisionforhelipadonitsroof.Untila
recent motion allowing for variations in this policy, every high rise construction in the city has
compulsory helipad on its roof. It is recommended that the helipad requirement is waived for
buildingsupto250feetonprovidingforalternativetechnologyforfirefightingandfiresafety.

StaffRecommendations:

1. Zones with Type I and II construction parcels shall be allotted minimum densityrequirement
as per building typology. The requirementwillberestrictedtoprovidingfortherequireddensity
andwillnotincludemaintainingthedensityafteroccupationofthebuilding.
2. Compulsory provision for minimum parking requirement will be modified to context based
regulation that includes possible exemption from requirements. Existing provision of parking
near the parcel meeting 75 percent capacity for the project at all times can be grounds for
exemptionfromparkingrequirementoncasebycasebasis.
3.EliminationofheightrestrictiononselectTypeIandIIparcelsaroundtheconventioncenter.
4. Increase in allowed FAR from 6:1 to 13:1 without having to provide public benefits to the
city.
5. Reduction of transfer fee for TFAR purchases from present 10 percent of community benefit
or $5 per square footpurchased,whicheverisgreaterto7.5percentofcommunitybenefitor$3.5
persquarefootpurchased,whicheverisgreater
6.WaiverofapprovalprocessofTFARpurchasesupto100,000squarefeet.
7. Provision of direct Transfer of Air Rights between two properties with expedited city
approval.
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8. Drafting of a service delivery requirement for high rise development to expedite processing
schedule through the Planning entitlement stage, and also set a schedule for staff review forthe
plancheckprocessattheBuildingPermitstage.
9. Allowanceof50percentimpactfeeatcertificateofoccupancyandnotduringbuildingpermit
stageifconstructionscheduleadheredto,withamoratoriumperiodofoneyearincaseofdelays.
10. Creation of preapproved FAR incentive percentage for every public benefit initiative
undertaken.
11. Creating a task force to identify master vision plan, quantifying economically profitable
development for downtown and locating potential parcels to target that development spread
across downtown to mitigate possible overconstruction of one typology and encourage mixed
usedevelopmentspreadacrossmultipleparcelsinthesamevicinity.
12. Expedited review for multiple developments by developer if one development is a Type I
construction in designated downtown areaandanotherisaPublichousingprojectinanotherpart
ofthecity.
13. Section 14.5 for definition of Public Benefit to include provisions on site as community
benefit
14. Support to developers in terms of delivery and production line with streamlined approval
process for modern construction technology by allowance of feasibility studies by external
agenciespriortotheapprovalprocess.
15.Percentagereductionsinexactionsandimpactfeesforeverybracketofheightachieved.

AdditionalRecommendationsforFutureConsideration:

Staff recommends implementing amandatoryreviewofeachoftheabove provisionsand

amendments at fiveyear intervals. As this fiveyear review point, and pending the defacto
implementation and results of the aforementioned measures, several additional regulatory and
administrativeadjustmentsmaybeconsidered.
One of these is the adoption of a height minimum for a select area. Historic Broadway
provides a precedent for this measure in its 100foot street wallminimum,intendedasatoolfor
preserving historic character. Bysettingaheightminimumat150feetormore (aheightwhichis
over the threshold at which steel frame construction must be used) developers will be
economically driven to build much higher. The City may find it compelling to accompanysuch
an amendment with a converse TFAR system: a projects height could be reduced below the
minimuminexchangeforcommunitybenefitsorfees.
Further, a significant administrative challenge reported by the Department of City
Planning is the lengthy inspection and approval process of new construction by the Bureau of
Fire Prevention and Public Safety. According to city planners, the inexperience of this
department with higherriseand steelconstructioncausessomehesitancy,thusslowingapproval.
Importantly, while there are no regulatory means of alleviating this obstacle, it raises the
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important longterm possibility ofcreatingadedicatedHighRiseUnitoftheDepartmentofCity

Planning. This department is recommended to include experts specializing in engineering and
public safety components of manystory, steelconstruction towers. TheUnitwouldalsocontain
dedicated members ofCityPlanningstaffandofDepartmentofTransportation.Asa preliminary
measure, Staff recommends the formation of a HighRise Task Force representing these
departments, with one express objective being to identify and reconcile knowledge or resource
gapsininspectionprocesses.
Growth projections for the Downtown area justify a fundamental adjustment of CEQA
review processes as applied to this district. Staff assumes that Downtown will becomeasitefor
many more skyscrapers in the future indeed, this type oflargescaledevelopmentbenefitsfrom
clustering. As such, a single comprehensive Environmental Impact Review would more
efficiently address the overall impact of a districtwide increase in density. This proposed
umbrella EIR would be based on a predicted standardization of the byright envelope and
resulting traffic and population volume. Individual projects would subsequently require only a
followup review as an amendment to the umbrella EIR, vastly simplifying and expediting the
approval process and significantly reducing development costs.Suchasystemmustalsoinclude
afeestructure,ensuringcityincome.
Conclusion:
These proposals if elected, stands to benefit developers, neighborhoods, as well as the City in
general. It will help the city to seize the opportunity to build a denser downtown which will
bolster the finance and tourism for the city and help make downtown a more vibrant andviable
zone for development. This provisions will meet the demands for more hotels, apartments and
condominiums to develop downtown into a focal point for the citys image while utilizing
maximumopportunitythattheDowntownareahastooffer.

PPD619SmartGrowthandUrbanSprawlHighRiseIncentives
DingwenChen,LavanyaRaghuraman,YingyiHu,ClareEberle
April23rd2104

APPENDIXA

ORDINANCENO.________________

A proposed ordinance amending Section 12.21.1 of the Los Angeles Municipal Code to
incentivizethehighrisebuildingdevelopmentinDowntownLosAngeles.

THEPEOPLEOFTHECITYOFLOSANGELES
DOORDAINASFOLLOWS:

Section1.SubsectionBofSection12.21.1oftheLosAngelesMunicipalCodeisaddedtoread:
To reduce costs and streamlineapprovalprocessforhighrisebuildingsinthearea eastof
the 110 Freeway and north of the 10 Freeway in downtown Los Angeles, the following
incentivesshallbeprovidedfortheapplicants:
1. Zoning Changes Remove minimum parking requirement, exemption from
constructing helipad in lieu of other modern fire safety measures, direct Transfer of Air rights
between developers. Eliminate height restrictions as well as densityrestrictionsonTypeIandII
constructionparcelsandenforceminimumdensityrequirement.
2. Reduced approval process by creating a preset listofrequirementstobecompletedby
thedeveloper
3. create a task to mitigate possible overconstruction of one typology and encourage
mixedusedevelopment
4. Incentivize developer for another development in otherpartsofthecityalongwiththe
approval process for the high rise construction. Expedited twoapprovalsoneincoredowntown
andoneinotherpartsofthecity
5. To pack hirise projects with potentially very profitable projects to encourage the
developertoinvestinhighrisedevelopment.
6. Section 14.5 for definition of Public Benefit to include provisions on site as
communitybenefit
7. Support todevelopersintermsofdeliveryandproductionlinewithexpeditedapproval
process for modern construction technology by allowance of feasibility studies by external
agenciespriortotheapprovalprocess.
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DingwenChen,LavanyaRaghuraman,YingyiHu,ClareEberle
April23rd2104

8. Percentage reductions in exactions and impact fees for every bracket of height
achieved.

ATTACHMENT1

LANDUSEFINDINGS

TheDepartmentofCityPlanningrecommendsthattheCityPlanningCommission

1. In accordance with Charter Section 556, that the proposed ordinance (Appendix A) is in
substantial conformance with the purposes, intent, and provisions of the General Plan. The
proposed ordinance will positively conduce to the improvement of the provision of
governmental services, expedite the administrative processing of development applications, and
minimize public and private development application costs, as defined in Economic
Development Objective 7.4anditwillpromotearangeofhousingopportunitiesintheCityas
defined in Economic Development 7G. It will alsoimproveaDowntownCenterastheprimary
economic, governmental, and social focal point of the region with an enhanced residential
community., as defined in Land Use 3G, and contribute to Reduce regulatoryandprocedural
barriers to increase housing production and capacity in appropriate locations. As defined in
HousingObjective4.4.

2. In accordance with Charter Section 558 (b) (2), the proposed ordinance (Appendix A) is in
substantial conformance with public necessity, convenience, general welfare and good zoning
practice in that it provides opportunities for highrise development in Downtown Los Angeles
through reducing costs and streamlining approval processes without compromising the level of
input available to the neighboring community and review by the City, as well as stillcontribute
tosomeincomeforthecityandprovidepublicbenefitsascompensation.

3. in accordance with Charter Section 558 (b) (2), the proposed ordinance (Appendix Awill
have no adverse effect upon theGeneralPlan,specificplans,oranyotherplansbeingcreatedby
the Department of City Planning because the proposed ordinance is consistent with the General
PlanandcarriesouttheGeneralPlangoals,policiesandobjectivesdiscussedabove.

ENVIRONMENTALFINDING
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In accordance with the California Environmental Quality Act (CEQA), this ordinance will have
thefollowingpotentialenvironmentalimpacts

Aesthetics: Highrise buildings mayhavepotentialaestheticimpactonthesurroundingbuildings

in that they can infringe solar rights of neighboring buildings and create difficulty for
accepting sunlight. If the City determines this to be a significant problem based on
concentration of projects, solar infringement could be mitigated with graduated setback
requirementsatprojectsupperlevels.

Greenhouse Gas Emissions: Highrise buildings may have direct and indirectimpactsleadingto
increased Greenhouse Gas Emissions. Because they will be hotter in summer and colder in
winter than lowerrise buildings, thus requiring moreheatingandcooling,theywillbemore
energyconsuming and emit more greenhouse gas. Additionally, the walls of high rise
buildings can absorb solar radiations of the neighboring lowerrise structures and convert it
into heat, which will potentially increase theurbanheatislandeffect.Theseeffectscouldbe
mitigated by requiring solar energy production within individual buildings, decreasingtheir
consumptionofexternalenergy.

Population and housing: Constructing highrise buildings will naturally induce substantial
population and density growth in downtown area. However, Staff believes this growth will
represent Smart Growth done right, concentrating this population increase in one of the
citys most transitrich districts. Mitigation measures should be pursued in partnership with
the Department of Transportation, ensuring that reduced parking facilities are met with
appropriatepublictransitaccessibility.

Transportation/traffic: The proposed ordinance will potentially have impact on traffic patterns
since it recommends to waive the requirement for constructing parking spaces. In response
to traffic impacts and the above population impacts, mitigation measuresshouldbepursued
in partnership with the Department of Transportation, ensuring that reduced parking
facilitiesaremetwithappropriatepublictransitaccessibility.

The proposed project MAY have a "potentially significant impact" or "potentially significant
unless mitigated" impact on the environment, but at least one effect 1) has been adequately
analyzed in an earlier document pursuant to applicable legal standards, and 2) has been
addressed by mitigation measures based on the earlier analysis as described on attached sheets.
AnENVIRONMENTALIMPACTREPORTisrequired,butitmustanalyzeonlytheeffectsthat
remaintobeaddressed.
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REFERENCES

Jose Huizar. (Sep 10, 2013). Motion regarding hotel & hirise incentives & possible Interim
ControlOrdinance.Retrievedfrom
http://www.dlanc.org/sites/dlancd7.localhost/files/2013_09_10_HuizarMotion_HighRiseDevelo
pment.pdf

DCPofLosAngeles.GeneralPlan.Retrievedfrom
http://cityplanning.lacity.org/

MichaelF.,etal.(2013).OfficialCityofLosAngelesMunicipalCode.Retrievedfrom
www.amlegal.com/library/ca/losangeles.shtml

MichaelF.,etal.(2013).OfficialCityofLosAngelesAdministrativeCode.Retrievedfrom
http://www.amlegal.com/nxt/gateway.dll/California/laac/administrativecode?f=templates$fn=def
ault.htm$3.0$vid=amlegal:losangeles_ca_mc

GerryM.(2013).ReportoftheChiefLegislativeAnalyst.Retrievedfrom
http://clkrep.lacity.org/onlinedocs/2013/130991_rpt_cla_8613.pdf

Frank M. (Apr 05, 2007). LA City Ordinance #178,592(Transfer of Floor Area Rights).
Retrievedfrom
http://cityclerk.lacity.org/ordinance/

CEQAInitialStudyChecklist.Retrievedfromresources.ca.gov/ceqa

Editorials of Los Angeles Downtown News. (Aug. 6 2013). Downtown Shouldnt Squander
OpportunitytoBuildTallandIncreaseDensity.LosAngelesDowntownNews.Retrievedfrom
http://www.ladowntownnews.com/opinion/downtownshouldntsquanderopportunitytobuildt
allandincrease/article_42aaab98fdec11e280750019bb2963f4.html

Donna E. (Mar. 25,2014).WithFiveNewProposedHighRises,DowntownIsLookingUp.Los

AngelesDowntownNews.Retrievedfrom
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http://www.ladowntownnews.com/news/withfivenewproposedhighrisesdowntownislookin
gup/article_fcf9c708b12a11e39c89001a4bcf887a.html

Ryan V. (July 15, 2013). IsDowntown'sLowRiseBuildingSpreeHurtingtheCommunity?Los

AngelesDowntownNews.Retrievedfrom
http://www.ladowntownnews.com/news/isdowntownslowrisebuildingspreehurtingthecom
munity/article_0e5f97eceb5211e2a6940019bb2963f4.html

Interviewwith
BryanEck,CityPlanningAssistantatCityofLosAngeles,April18,2014.
SimonHa,Chair,DLANCPlanning&LandUseCommittee,April17,2014
Edgar Khalatian, Associate, Paul Hastings / CoChair, City of LAZoningAdvisoryCommittee,
April16,2014

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