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Title:
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Review of Vacant Storefronts and Retail Spaces
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Title
Review of Vacant Storefronts and Retail Spaces
Description
This item presents an overview of options available to assist activation of vacant storefronts and commercial spaces throughout Phoenix.
THIS ITEM IS FOR INFORMATION AND DISCUSSION.
Report
Summary
The Workforce and Economic Development Subcommittee at its May 26, 2021 meeting, requested that staff explore options to assist property and business owners to better activate vacant commercial storefronts. The Planning and Development Department (PDD) led the effort with the Community and Economic Development (CEDD) and Neighborhood Services (NSD) departments as internal partners. In addition, PDD hired Glancy Consulting to assist with this effort as a subset of the larger departmental process improvement work that is the primary focus of the consulting contract. Staff organized and attended 14 listening sessions with a variety of stakeholders, meeting with 46 stakeholders representing 31 different organizations, developers and elected officials (Attachment A). These listening sessions were designed to create an open dialogue, gain insight into some of the obstacles and potential solutions for vacant commercial storefront properties, and identify opportunities for reusing or redeveloping these sites.
An internal staff working group met to evaluate comments received from the listening sessions and held numerous internal discussions with key supervisors to analyze various comments and concerns raised and to develop the list of recommendations below. The recommendations broadly focus on the following:
Planning and Zoning Recommendations regarding land use and development standards to encourage reinvestment in the centers;
Development Process Improvement Recommendations to streamline process requirements for existing centers;
Other Market and Financial Considerations to help address redevelopment costs for these centers.
Combined, these efforts will give the City the best opportunity to address the vacant storefront issue, while also helping to implement other adopted plans such as the Housing Phoenix Plan and the Tree and Shade Master Plan.
Staff requests City Council input and direction on the following potential recommendations. Based on City Council input and direction, staff will develop a more defined implementation strategy and timeline. Staff would then work to implement the various changes through the required processes, which may include City Code amendments, text amendments, and policy modifications. Based on the potential cost and scope, some items may be included in the upcoming 2022-23 budget process.
Planning and Zoning Recommendations
In addition to the process improvements and expansions listed below, PDD staff identified a number of potential changes and updates to the Phoenix Zoning Ordinance that could facilitate activation of vacant storefronts. These concepts would require Zoning Ordinance Text Amendments through the normal public hearing and City Council adoption process:
Expand permitted use list in the Planned Shopping Center (PSC), Neighborhood Retail (C-1) and Intermediate (C-2) zoning districts. The language in the parenthesis outlines key issues that need to be discussed as part of developing the exact language. The identified uses might include, but are not limited to, small-scale breweries and distilleries (scale); neighborhood fulfillment centers (scale); outdoor recreation uses (parcel size, time); expanded outdoor dining/roll-up doors (time); and artisan manufacturing (scale);
Evaluate required parking relief options for shopping centers that meet size, location or use criteria to reduce parking requirements by-right. Develop a use permit public hearing process to allow for creative parking proposals, directional signage subject to standards and potential revocation of an approved use permit if not met;
Request City Council authorization for a general-fund position within the Office of Customer Advocacy to help property owners/business owners/small developers work together in an area to help with property/business owner understanding and paperwork processing to share existing parking spaces. This has the potential to increase property owner revenue by maximizing use of existing parking spaces instead of requiring more spaces be built with a change of use;
Expand Multi-family Residential Development allowances within the C-1 and C-2 zoning districts to allow more than existing R-3 density and development standards (15 du/acre-30 feet-up to 48-feet with building step-backs). Explore up to R-5 density and development standards (43 du/acre-48-feet). Parcel size limits, height step-back requirements and use permit provisions will be explored as part of this process;
Evaluate Landscape Standards for reuse of older commercial centers/buildings. This effort will streamline responses on existing conflicts between policies and ordinances regarding landscape requirements for older shopping centers;
Review all special permit and use permit applications filed in the last three years and propose to modify some of them to make it a use by-right subject to performance standards or make it a use permit instead of a special permit public hearing process. Examples of potential uses include Licensed Massage Therapy and Self-storage.
Development Process Recommendations
These will require modifications to existing policies, additional staff training and resources, depending upon the exact program expansion and/or popularity:
Expand use of the existing Annual Facility Program (AFP) to include larger shopping centers. This is a premium program that combines plan review and inspections for projects that are embedded in larger existing industrial and manufacturing buildings. Staff proposes to create a new shopping center program that will allow for quicker review and on-site work for tenant improvements and other commercial permits for existing centers or portions of existing centers;
Expand the Office of Customer Advocacy (OCA) Program to include conversion of older shopping centers to assist with smaller multi-family developments and for centers deemed no longer economically viable;
Develop a retail team for site plan and civil plan reviews to assist the expanded AFP and OCA programs;
Develop a generic fact-finding meeting process to make it easier for developers to gather some basic information prior to expending funds on site plans and other development details. This will provide a basic list of possible uses, along with known parking and infrastructure data;
Work with CEDD to conduct outreach to a few shopping center parcel owners that are ready for redevelopment to help identify big picture issues and areas where the City can offer help to encourage private investment in the center;
Provide additional staff training on development process requirements to ensure compliance with relevant case law, improve the appeal process and ensure timely staff decisions;
Evaluate Policies and Ordinances regarding on-site trash/recycling pick-up and Fire lane requirements when redeveloping some smaller shopping centers into multi-family uses;
Refine process to better help customers obtain a Certificate of Occupancy for existing uses in older buildings.
Other Market and Financial Considerations
Staff also identified other potential solutions for City Council consideration that will help address this issue. These include City tracking and marketing, potential additional sources of funding for required infrastructure improvements, and enhancement or expansion of existing programs. If the City Council directs staff to explore these options staff will further develop program criteria and potential costs and return to City Council for additional discussion and direction. That direction could then be incorporated into the budget discussions for next year. Ideas to consider include the following:
Create a Vacant Store Front Registry to help connect brokers, investors, site selectors and business owners;
Explore creation of additional financial solutions such as construction sales tax reimbursement, or infrastructure reimbursements to help address unique development challenges for aged shopping centers;
Explore creation of additional demolition/site preparation resources to remove/minimize some of the risks with redeveloping aged shopping centers. These resources could include cataloging existing programs/grants related to Phase I environmental, or archeology resources. In addition, if funding is allocated an annual grant program could be created to allow for property owners/developers to apply for grants to cover some of these costs so the properties are better able to be marketed for reuse or redevelopment of the site;
Explore creation of infrastructure/street/sidewalk/landscaping funding to create a grant program for improvements in the right-of-way that typically are requirements of shopping center owners when they redevelop. A grant program could be developed to work with adjacent property owners to spur investment in their parcels. This would encourage private investment that builds upon the public investment to create a better appearance for the larger community. The scope of the grant would be determined by City Council funding but conceptually it could address extenuating water/sewer requirements, street requirements, cracked curb/gutter/sidewalks, or landscaping in the right-of-way;
Install public infrastructure such as streets, sidewalks, water/sewer infrastructure for designated areas through Capital Improvement Plan or bonds to revitalize the public infrastructure in an area. This will help attract private investment in an area and the larger community will benefit from an improved appearance of the area. The areas would be chosen with City Council input and market analysis to maximize the potential to capture private reinvestment in these centers.
Expansion of the Neighborhood Commercial Rehabilitation Program in areas designated by CEDD to increase funding and the eligibility scope for more participation.
Department
Responsible Department
This item is submitted by Deputy City Managers Ginger Spencer and Gina Montes and the Planning and Development, Community and Economic Development, and Neighborhood Services departments.