Chicago Mayor Rahm Emanuel has introduced an ordinance to the Chicago City Council that makes transformative changes to the Downtown districts and available floor area bonuses.

The following is a summary of some of the key provisions in the introduced ordinance.

Key changes

  • The introduced ordinance replaces all existing floor area bonuses with a new Neighborhood Opportunities Bonus. The new floor area bonus is based on a financial contribution calculated as follows:

[cost of 1 square foot of floor area] = 80% x [median cost of land per buildable square foot]

Note: The cost of land is to be determined periodically by the Chicago Department of Planning and Development.

  • The minimum floor area bonus for any project in any downtown zoning district is 1.0 FAR. The maximum floor area bonus for each district is as follows:
    • DR-3, DX-3, DS-3 = 2.5 FAR
    • DR-5, DX-5 = 2.7 FAR
    • DR-7 = 4.0 FAR
    • DX-7 = 6.2 FAR
    • DX-12, DC-12 = 5.6 FAR
    • DX-16, DC-16 = Undetermined, but potentially no cap

It remains to be seen what the interplay will be between the maximum available bonuses set forth above and the ability to re-zone to a higher density zoning district. For example, if a property is currently zoned DX-3 and a developer proposes a project with an 7.0 FAR, will the developer be able to up-zone to a DX-7 or will it be required to up-zone to a DX-5 and utilize the bonus for an additional 2.0 FAR?

  • All projects utilizing floor area bonuses require approval as a planned development. As detailed in our previous alert on the 2015 Affordable Requirements Ordinance (the ARO, available here), all planned developments in the downtown districts are subject to the ARO.
  • The downtown area, which was previously established by the 2004 Zoning Ordinance, is expanded to encompass the area bounded by Division Street; Lake Michigan; the Stevenson Expressway; the CTA red line right-of-way; Cermak Road; Stewart Avenue; the South Branch of the Chicago River; 16th Street; the Dan Ryan Expressway; the Eisenhower Expressway; Ashland Avenue; Ogden Avenue; Ada Street; Carroll Street; Sangamon Street; Wayman Street; Halsted Street; the Kennedy Expressway; Ogden Avenue; Chicago Avenue; the North Branch of the Chicago River; the North Branch Canal; and Halsted Street. The Department of Planning and Development has released additional information about the initiative, including maps of potential FAR parameters for specific areas within the expanded downtown area, available here.
  • Properties within the new downtown area boundaries but outside of the original downtown area boundaries are not automatically rezoned to a “D” zoning district, but would need to be rezoned upon an application filed and approved by the City Council.
  • A new Neighborhood Opportunities Fund is established, into which 80% of the funds collected from the floor area bonus are deposited. The remaining 20% of the funds are divided equally between a City-wide Adopt-a-Landmark Fund and a Local Impact Fund. As an alternative, applicants may make payments directly to sister City agencies or landmark owners or undertake specific local improvements themselves, subject to review and approval by the Department of Planning and Development in consultation with the local alderman.
  • The introduced ordinance applies to all planned development applications filed on or after April 13, 2016. Previously-approved planned developments remain in full force and effect, provided any amendment will be subject to the provisions of the 2016 ordinance.

The ordinance as introduced makes significant changes to the Zoning Ordinance as it relates to development in the downtown district and facilitates investment in neighborhoods outside of downtown.

This summary addresses only the ordinance as it was introduced. Further updates will be provided upon final approval of the ordinance.