Agenda - Planning Commission - 12/06/2007

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For multiunit commercial development, some communities may consider establish- ing a mandatory use list. Based on commu- nity objectives for the downtown or central business district, a use list may be drafted to implement a desired mix. So, for example, a new commercial development with 10 units must have two units with uses from help offset rent revenues that are below market rate. LEGAL ISSUES Like any zoning or land-use regulation, special provisions aimed at creating vibrant yet afford- able downtowns and central business districts must be sensitive to a number of legal issues. use list A (that may include desired uses such as pharmacies or grocery stores, or affordable commercial space) and the rest may be from the more open commercial cat- egory (use list B). This could be a straightfor- ward, effective approach if planners carefully consider local market conditions. As with a strictly incentives-based approach, the success of a linkage or mandatory approach likely will depend on the degree to which it can help the devel- oper recoup some of the costs of compli- ance. For example, local governments might draft regulations so that projects required to provide affordable commercial space or pay an in-lieu fee also receive an increase in density. If increased density is not feasible on-site, then perhaps affordable commercial regulations could be tied to a transferable development rights program. Similarly, local governments may need to provide owner incentives such as property tax breaks to 66 Fortunately, these legal issues are not difficult to address. For example, constitutional issues such as substantive due process and equal protection require that land-use regulations be rationally related to legitimate objectives and not discriminatory. Another constitutional con- cern is the "takings" issue. However, regula- tions like the ones discussed above should not pose takings problems since they do not threaten to wipe out all economically viable use of the subject property. With respect to tak- ings, however, these regulations are on safer legal ground if they are legislatively adopted and uniformly applied, as opposed to being applied on an ad Iioe, discretionary basis. Affordable-space requirements should also have a sufficient nexus to the community's need to accommodate a variety of commercial users and should be roughly proportional to such need. Interstate Commerce As discussed above, several communities have implemented formula or c~ain business restrictions to protect community character. The courts, however, have a long history of striking down state laws and local ordinances that discriminate against out-of-state busi- nesses. The reasoning behind such cases is that Congress has exclusive authority to regu- late interstate commerce. If local governments were free to create disadvantages for out-of- state businesses, interstate commerce would suffer overall. As a result, zoning regulations must be aimed at creating a healthy mix of commercial uses rather than simply prohibit- ing national chain restaurants on the belief thatthere are quite enough Starbucks coffee shops in the world. The goal should be to assure that key areas such as downtowns and business districts feature a variety of uses that serve local residents and visitors, as well as people of various income groups. Case Law A 2003 case from California, Coronadans Organized for Retail Enhancement v. City of Coronado, demonstrates the importance of regulating local and out-of-state businesses with an even hand. The City of Coronado adopted certain restrictions on formula retail businesses, defined as "a type of retail sales activity or retail sales establishment (other than a 'formula fast food restaurant') that is required by contractual or other anrangement to maintain any of the following: standardized ('formula') array of services and/or merchan- dise, trademark, logo, service mark, symbol, The goal should be to assure that k~y areas such as downtowns and business districts feature a variety of uses that serve local residents and visitors, as well as people of various income groups. ZONINGPRACTICE 10.07 AMERICAN PLANNING ASSOCIATION I page 6