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Commission narrows C3R rules, agrees to conditional path for some third‑floor conversions
Summary
After extensive testimony from property owners, retailers and the BID, the Planning Commission approved permanent C3R controls for Union Square while adding a conditional-use path for third‑floor office conversions and grandfathering pending applications.
The Planning Commission on Oct. 18 moved to adopt permanent zoning changes for the Downtown C3R district that limit large-scale non-retail conversions of upper floors while allowing smaller, publicly accessible professional and retail-service uses on the second and third floors.
Staff and Supervisor Peskin’s office framed the package as a data-driven effort: a field survey showed most second- and third‑floor uses remain public-facing and that 80% of C3R spaces are 5,000 square feet or smaller. Planners proposed a threshold that would make non‑retail sales and services under 5,000 square feet principally permitted on floors 4–6 and conditionally permitted above that size.
Property owners, Macy’s and the Union Square BID urged more flexibility for third-floor conversion, arguing large-format retail rarely occupies those floors and that vacancies harm the retail ecosystem. The BID sought treating the third floor like floors four to six; retailers warned that over‑strict rules risk long vacant upper levels.
The compromise: commissioners voted to recommend the ordinance with a modification to allow third‑floor office uses via conditional-use authorization and to grandfather a set of pending applications so they may proceed through the CU process. The commission also approved a small adoption of a conversion fee targeted at office development above 5,000 square feet to fund public-realm improvements in Union Square. The motion passed 5–1 on the CU‑for‑third‑floor amendment and otherwise passed unanimously.
