ARE ZONING LAWS CREATING BLIGHT?
Site Plan: Warren & Company
A home-grown success story with a deep commitment to community - Maple Street is just the kind of ownership group that would seem to be a perfect fit to take on the unique challenges of redeveloping a blighted, non-historic property like 2501/2510 Oak St. While various incentives are available to developers interested in designated historic properties within the neighborhood, aging and derelict sites like the Oak Street property continue to create eyesores throughout the district’s landscape as zoning laws lie in conflict with economic reality.
Offered for sale at slightly less than $1 million and requiring significant renovation costs, it is highly unlikely that an office or retail use could make the transaction economically viable.
Online retail, stagnant wage growth and an oversupply of space have all contributed to a long-term and sustained year-over-year reduction in retail square footage throughout the US. There is less shopping space per person today than at any point in the last 35 years. Additionally, long term trends favoring smaller footprints and shared office space have meant that office uses have posted some of the worst performing returns on investments in recent years.
If retail and office uses are not economically viable for a structure like 1502/1510 Oak, then what is? Well, a sector in which consumer spending has consistently remained strong is that of restaurants and entertainment. Besides multifamily housing, restaurants and bars have been one of growth areas within the commercial real estate market. Not surprisingly, most of the new commercial construction within Riverside and Avondale have been for this kind of use.
2502 Oak Street is a 1,940 square foot office building built in 1959 while 2510 is a 2,182 square foot office building built in 1942. The site sites within an area that is zoned for office use (CRO). Neither buildings are designated as ‘contributing structures’, a key differentiation in regards to parking exemptions within the Riverside Avondale Historic District- which is subject to a special zoning overlay.
The combined property sits at a signalized intersection, two blocks away from the St Vincents Medical Complex. A 15-space parking lot is located on site.
Both properties are zoned CN- which allows for the use of restaurants without drive-through facilities by right. Admissible uses for this site by exception includes an establishment which includes the sale of alcoholic beverages for on-premises consumption, as well as outside sale and service in conjunction with a restaurant.
Additionally, the Riverside Avondale Zoning Overlay allows for a restaurant use within an office character area by exception that includes the sale and service of alcoholic beverages for on-premises consumption provided that seating capacity does not exceed 60 and where food is ordered and prepared for consumption on premises.
As parking is a hot button topic in the surrounding area, conversions to commercial uses from an office use (or for new commercial construction) would require that the developer provide for only 65% of the required number of spaces than would be required for new commercial construction in say, a suburban location.
Generally, a restaurant requires one parking space for every four seats and one parking space for every two full time employees. The property along Oak would therefore be required to provide 65% of that formula. For a 60-seat restaurant, the site could potentially hold enough parking on-site for a renovated or newly-built restaurant. But, would a 60 seat café space that would not include a bar, outdoor seating and restrictions on operating hours (all conditions that RAP sought for a proposed restaurant on the same street) be able to generate the kind of return on investment to break even? Evidently, the market doesn’t seem to think so. And a blighted property remains empty.
For aging, non-contributing structures like 2502/2510 Oak Street- a strong argument could be made that zoning laws that are not responsive to market realities are hurting development and incentivizing blight throughout established neighborhoods like Riverside.