Council studies development agreements, incentive zoning

A city can use both incentive zoning and development agreements to promote developer interest in properties
By Pat Ratliff | Jan 24, 2013

The long running discussion about development agreements and incentive zoning is again on the front burner in Edmonds.

On Tuesday, City Attorney Jeff Taraday gave a presentation to the City Council and answered questions.

Mostly a learning session, the discussion included potential legal issues connected with these zoning tools.

A city can use both incentive zoning and development agreements to promote developer interest in properties that otherwise might remain undeveloped or underdeveloped.

The city “offers” something extra to the developer, such as increased density, with the condition that the city will gain something in return, perhaps a park or other public amenities.

A developer can always “opt out” of an incentive zone agreement, but not a development agreement.

The two methods are used very differently, even though the benefits can be similar.

According to a memo prepared by Taraday and Beth Hilliard, which accompanied the presentation, “Incentive zoning and development agreements can be differentiated by the type of incentive they offer to developers and their nature as planned or ad hoc.

“Through incentive zoning, cities may create an overlay incentive zoning district wherein developers build public amenities or provide other substantial public benefit in exchange for regulatory bonuses such as extra density.”

In development agreements, the city can make “contractual agreements with developers whereby the developer receives a vested right to develop a property subject to current regulations.”

But development agreements are more of a “big ticket item” and don’t work well with smaller parcels, Taraday said. They also often include a longer time period or extended buildout.

“It’s important to get the right balance of what is important to the developer and what is important to the city,” Taraday said.

“And an incentive zone is important if you don’t want the incentive to be available city wide.”

Taraday said that while the techniques may be similar, the development agreement doesn’t give the developer flexibility unless the flexibility is written into the code.

Incentive zoning is more flexible, and allows a city to obtain public benefits from private developers in exchange for modifications of specified zoning requirements. Often this means developers can build more intensely, while providing a service or amenity to the public.

Benefits cities could receive include parks, plazas, overhead weather protection, outdoor performing venues, public art, public restrooms, decorative street lighting, road improvements, public parking or any number of other amenities a city desires.

In exchange for those amenities, cities give up incentives such as increases in residential or nonresidential unit density, changes in setback requirements, changes in height requirements, or even fee waivers or expedited processing.

Cities also can use incentive zoning to meet a need for more affordable housing, historic preservation of urban landmarks, promoting the use of solar energy or preservation of trees.

The key to implementing incentive zoning is knowing what the city wants and making sure the incentives offered are worth the trade-off with the developer.

“If you tie a developers hands too tightly, what you might end up with is a vacant space,” Taraday said.

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