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Committee splits file on Union Square zoning: send fee increase to planning, forward alternate version to Board
Summary
Supervisors debated C3R zoning changes to allow limited third‑floor non‑retail uses and create a Union Square conversion fee. Sponsor Aaron Peskin proposed duplicating the file: a $6 per square‑foot fee version sent back to Planning Commission and a $4 per square‑foot version forwarded to the full Board.
The Land Use & Transportation Committee on Jan. 7 took up an ordinance to amend C3R zoning rules for Union Square, permitting certain non‑retail sales and service uses on the third floor with conditional‑use authorization and creating a Union Square park recreation and open‑space conversion fee.
Sponsor Supervisor Aaron Peskin said the amendments aim to protect the district's retail character while allowing flexibility where third‑floor retail is impractical. "Retail is doing quite well," Peskin said, and the amendments are intended to prevent "office creep" while giving the Planning Commission latitude to evaluate whether proposed third‑floor uses would harm adjacent retail.
Peskin distributed language prepared with property‑owner and business stakeholders and proposed raising the conversion fee to $6 per square foot based on a Nexus study; he proposed duplicating the file and sending the $6 version back to the Planning Commission for review while forwarding a $4 per square‑foot version to the Board. Deputy City Attorney John Givner located a reference to the Nexus study (file 180916) in the record.
Planning Commission staff reviewed its October 2018 hearing and recommended four amendments, including applying the conversion fee only to office development over 5,000 square feet and grandfathering certain pending applications. Public testimony from retailers and property owners, including Macy's counsel and commercial brokers, urged flexibility for third‑floor conversions where physical limitations make retail infeasible.
Supervisor Peskin said he wanted to preserve the chance to reconvert to retail in future market conditions but strike a balance that prevents permanent loss of retail space. The committee agreed to duplicate the file (send $6 fee version back to Planning Commission and advance a $4 version to the Board) and to continue or clarify referrals as staff determine whether the $4 version also triggers rereferral.
Next steps: staff will determine referral requirements and the Planning Commission will review the $6 fee version; the $4 version may go forward to the full Board depending on staff referral determination.
