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The Transfer of Development Rights in Center City Philadelphia

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The Transfer of Development Rights in Center City Philadelphia University of Pennsylvania ScholarlyCommons Theses (Historic Preservation) Graduate Program in Historic Preservation 1992 The Transfer of Development Rights in Center City Philadelphia James Morse Jones University of Pennsylvania Follow this and additional works at: https://repository.upenn.edu/hp_theses Part of the Historic Preservation and Conservation Commons Jones, James Morse, "The Transfer of Development Rights in Center City Philadelphia" (1992). Theses (Historic Preservation). 379. https://repository.upenn.edu/hp_theses/379 Copyright note: Penn School of Design permits distribution and display of this student work by University of Pennsylvania Libraries. Suggested Citation: Jones, James Morse (1992). The Transfer of Development Rights in Center City Philadelphia. (Masters Thesis). University of Pennsylvania, Philadelphia, PA. This paper is posted at ScholarlyCommons. https://repository.upenn.edu/hp_theses/379 For more information, please contact [email protected]. The Transfer of Development Rights in Center City Philadelphia Disciplines Historic Preservation and Conservation Comments Copyright note: Penn School of Design permits distribution and display of this student work by University of Pennsylvania Libraries. Suggested Citation: Jones, James Morse (1992). The Transfer of Development Rights in Center City Philadelphia. (Masters Thesis). University of Pennsylvania, Philadelphia, PA. This thesis or dissertation is available at ScholarlyCommons: https://repository.upenn.edu/hp_theses/379 UNIVERSlTYy PENNSYLVANIA. UBKAR1E5 THE TRANSFER OF DEVELOPMENT RIGHTS IN CENTER CITY PHILADELPHIA JAMES MORSE JONES A THESIS in The Graduate Program in Historic Preservation Presented to the faculties of the University of Pennsylvania in Partial Fulfillment of the Requirement for the Degree of MASTER OF SCIENCE 1992 K-^ V /c£x^' John C.Keene, Chairman, Department of City and Regional Planning, Advisor Donna Ann Harris, Vice President, Philadelphia Historic Preservation Corporation, Reader UNIVERSITY OF PENNSVlv/.nia LIBRARIES . TABLE OF CONTENTS CHAPTER ONE: INTRODUCTION A. THE PHILADELPHIA PLANNING COMMISSION PROPOSES AMENDING THE ZONING CODE TO INCLUDE THE TRANSFER OF DEVELOPMENT RIGHTS, THEREBY PROMOTING HISTORIC PRESERVATION 1 B. LANDI'lARK PRESERVATION PRESENTS TANGIBLE BENEFITS TO CENTER CITY 8 1 Landmarks Promote Tourism 8 2. Landmarks Promote the City's Film Industry. .9 3. Landmarks Assist the City in Attracting New Businesses and Residents 10 C. LANDMARK PRESERVATION PRESENTS INTANGIBLE BENEFITS TO CENTER CITY 1. Preservation of Landmark Buildings Exerts a Beneficial Influence on the Public 11 D. TRADITIONAL DIFFICULTIES ASSOCIATED WITH LANDMARK PRESERVATION PROGRAMS UNDERSCORE THE ADVANTAGES OF TDR IMPLEMENTATION 14 1. Government Landmark Acquisition is Economically Unfeasible 14 2. Municipal Designation Programs Generate Political Opposition 15 3 Municipal Landmark Preservation Agencies are Understaffed 16 4 TDR Programs Remedy These Traditional Difficulties 17 E. ADDRESSING THE PROBLEM OF LANDMARK PRESERVATION IN CENTER CITY PHILADELPHIA: AN OUTLINE OF THE THESIS 19 CHAPTER TWO: THE DEMOLITION PROBLEM IN CENTER CITY PHILADELPHIA A. CHAPTER INTRODUCTION 21 B. AN OVERVIEW OF DEMOLITION ACTIVITY IN CENTER CITY 21 1 . Current Demolition Proposals 21 a. 26-30 South 21st Street b. 1908 Chestnut Street c. Ninth & Chestnut Streets, Southeast Corner .. 2. Recent Victories in the Demolition Battle..., 22 a. Lit Brothers b. 17th & Locust Streets, Northeast Corner c. Holy Trinity Church 3 . Recent Defeats in the Demolition Battle 22 a. Gimbels Department Store b. McCrae Houses c. Finneas Meade Antique Store d. Victory Building e. 1600 Block Chestnut Street, North Side ECONOMIC AND GOVERNMENTAL FACTORS GENERATE DEMOLITION PRESSURE 23 1 . Market Forces a. High-Income/Efficient Land Uses Drive out less-remunerative Historic Buildings. .24 2 . Governmental Factors 27 a. 15 Million Square Feet in the Zoning Envelopes above City-certified, Historic Buildings 28 b Wide-Streets Incentive 28 c. Zoning Code Encourages Parcel Assemblage 29 CURRENT PROGRAMS AND THEIR SHORTCOMINGS 31 1. Historic Commission's Preservation Ordinance 31 a. Provides of Commission Review of Proposed Demolitions 32 b. Fails to Safeguard Historic Buildings in Many Situations 33 c. Commission is Understaffed 35 d. Ordinance Presents Regulation Without Incentive 35 2. Investment Tax Credit Credited with Revitalizing Several Philadelphia Buildings and Neighborhoods 36 a ITC History and Current Status 36 b. Decline of ITC Attributed to Changes in Federal Tax Law 41 c. National Register Listing does not Safeguard Buildings from Private- Sector Demolitions 44 3 . PHPC Facade Easement Program 44 a Program Explanation 44 b. Factors Causing Declining Rate of Facade Easement Contribution 45 1. Decline in ITC Activity 48 2 Tax Law Changes Decrease Demand for Tax Shelters and Complicate Easement Donation 48 3 . Lack of Clear IRS Regulation 48 . 4. Severe Perpetual Economic Burden... 49 5. Difficult to Enforce in Perpetuity. 49 4. Zoning and Height Controls May be Appealed by Developers 49 E . SHORTCOMINGS OF EXISTING PROGRAMS UNDERSCORE BENEFITS OF TDR IMPLEMENTATION 51 CHAPTER THREE: THE CONCEPT AND THE HISTORY OF TDRS AND ITS CURRENT APPLICATION IN URBAN HISTORIC PRESERVATION INITIATIVES A. INTRODUCTION TO TDRS 52 1 Urban Historic Preservation Programs 52 2. Theoretical Premises for and Benefits of TDR Implementation 55 3 . The Philadelphia TDR Proposal 56 B. OTHER CITIES' USE OF TDRS FOR HISTORIC PRESERVATION 58 1 . The New York City TDR Plan 58 2 . The San Francisco TDR Plan 67 3 . The Denver TDR Plan 70 C. DEVELOPMENT RIGHTS TRANSFERS IN CENTER CITY HAVE ALREADY OCCURRED WITHOUT THE TDR PLAN 74 Academy House, Four Seasons Hotel, 1529 Locust Street , and 1500 Locust Street 74 CHAPTER FOUR: CONSTITUTIONAL, STATUTORY, AND PLANNING ISSUES PRESENTED BY TDR IMPLEMENTATION A. CONSTITUTIONAL AND LEGAL ISSUES 1 . The Taking Issue 81 a. Penn Central v. City of NY 83 b Keystone 90 c. Nollan 95 d. First English 98 e United Artists 102 f Taking Issue Conclusions 103 2 . The Due Process Issue 105 a Penn Central 107 b. Fred F. French v. City of New York 109 3 . Equal Protection of the Laws 112 4. The Pennsylvania Code Indicates the Manner in which Implementation of a TDR Program in Philadelphia Must Occur 115 5. The Anti-Trust Liability of the City Limits the Role of the Municipal TDR Bank 116 B. TDR IMPLEMENTATION RAISES SEVERAL PLANNING ISSUES REQUIRING RESOLUTION 118 iv C. CHAPTER CONCLUSION 122 CHAPTER FIVE: PROPOSAL FOR A TDR PROGRAM AND SELECTION OF LANDMARK SENDING AND RECEIVING SITES IN CENTER CITY A. INTRODUCTION 123 B. THE OBJECTIVES OF THE TDR PROGRAM 123 1. Preservation Objective Safeguard Historic Architectural Resources in Perpetuity in the Central Business District of Philadelphia from Demolition, Neglect, and Improper Alteration 123 2. Aesthetic Objective Divert high-rise development away from areas where it will diminish visual enjoyment of historic architecture 123 3. Financial Objectives a. provide for the long-terra maintenance of sending-site structures by creating an endowment 123 b. relieve landmark owners from the financial burdens associated with maintenance 124 c. place minimal financial burden on the City of Philadelphia 124 4. Planning Objectives a, divert high-rise commercial development to areas where the transit and other accommodateinfrastructure is increasedsufficient to density 124 b. integrate the TDR Program into the comprehensive revision of the Philadelphia Zoning Code 124 5. Legal Objectives a. accomplish Program goals without interfering with Constitutionally guaranteed rights of property owners 124 b. implement the Program without violating anti-trust legislation 124 c. adhere to procedures set forth in the Statutes of the Commonwealth of Pennsylvania regulating the enactment of land-use regulations 124 C. PROPER TDR PROGRAM DESIGN WILL PROMOTE PROGRAM OBJECTIVES 125 . 1 . Program Components a. exclusive sending and receiving site selection criteria 125 b. receiving-site selection criteria that select properties unencumbered by landmarks and located where additional FAR is of significant financial value and desirable from a planning and aesthetic standpoint 125 c. integration of TDR Program with proposed revisions of Philadelphia Zoning Code 125 d creation of a TDR bank 125 e. Program administration by PHPC 125 f. inclusion of real estate brokers in transfer activity 125 g. provisions insuring compliance with Constitution and insuring competitive position of TDRs versus other zoning bonuses 125 D. TDR PROGRAM DESIGN COMPONENT NUMBER ONE: EXCLUSIVE SENDING SITE SELECTION CRITERIA 127 1 Sending Site Selection Criteria 127 a. Location within area bounded by Callowhill Street, the Delaware River, Locust Street, and the Schuylkill River 127 b. Location within C-4 or C-5 Zoning Classification 127 c. Listing on National Register of Historic Places 127 d. Listing on Philadelphia Register of Historic Places 127 e. Non-participation in Facade Easement Program 128 2 Exceptions are provided for endangered landmarks that do not automatically qualify for inclusion in Program 128 E. RATIONALE FOR SENDING SITE SELECTION CRITERIA 129 1. Boundaries focus on area of past and likely, future , land use conflicts 129 2. C-4 & C-5 zoning inflicts most acute pressure for landmark demolition 129 3. Criteria limit availability of development rights , promoting high prices levels 129 4 . Criteria possess flexibility 130 5. Criteria select numerous prominent
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