1708 COMBINED LOT DEVELOPMENT (DD)

1708.1 Two (2) or more lots may be combined for the purpose of achieving the required FAR equivalent for preferred uses as follows:

1. (a) The lots may be located in the same square or in different squares;
2. (b) A combined lot development shall be eligible for the density and area allowances permitted in §§ 1703, 1704, 1705, and 1706;
3. (c) The combined lot development shall be limited to lots located within the same subarea as defined in §§ 1703, 1704, 1705, and 1706, except as provided in § 1708.1(d);
4. (d) Notwithstanding the requirements of paragraph (c) of this subsection and of § 1706.9, a historic property that is identified and governed by § 1707.4 is eligible to serve as the location of required residential uses within a combined lot development, even if the historic properties are located outside the Housing Priority Area established in § 1706.2;
5. (e) The required gross floor area to be devoted to preferred uses may be transferred from the sending lot to a receiving lot, on which the required gross floor area for preferred uses shall be incorporated into the building design and occupied; provided, that any applicable ground level uses required on any affected lot shall not be transferred, but shall be provided on each sending lot and receiving lot;
6. (f) In a combined lot development that does not include the allocation of required residential uses, the certificate of occupancy for a lot sending FAR for required preferred uses to a receiving lot may be revoked if:
7. (1) No building permit for the receiving lot has been issued within three (3) years after the issuance of the certificate of occupancy for the sending lot; or
8. (2) No certificate of occupancy for the receiving lot has been issued within five (5) years after the issuance of the certificate of occupancy for the sending lot;
9. (g) The maximum permitted gross floor area for all uses, the minimum required gross floor area for preferred uses, and bonus density, if applicable, shall each be calculated as if the combined lots were one lot, and the total project shall conform with the maximum and minimum gross floor area requirements;
10. (h) A building constructed as of January 18, 1991 or that was under construction on that date is not eligible to utilize the combined lot development provisions;
11. (i) No allocation of gross floor area for required uses shall be effective unless an instrument, legally sufficient to effect such a transfer, is filed with the Zoning Administrator and recorded in the land records of the District of Columbia against all lots included in the combined lot development;
12. (j) The instrument shall be in the form of a declaration of covenants that:

13. (1) Is signed by the owners of all affected lots;

14. (2) Runs with the land in perpetuity;

15. (3) Burdens all lots involved in the allocation of gross floor area for required preferred uses;
16. (4) Binds the present and future owners of the lot receiving FAR to reserve, design, construct, cause to be occupied, and maintain in perpetuity an area on-site equal to the gross floor area of required preferred uses received; and
17. (5) States the maximum permitted gross floor areas for all uses on all lots, the minimum required gross floor areas for preferred uses on all lots, and the gross floor area allocated. The covenant shall further state that, after the transfer, the combined lots conform to the maximum and minimum gross floor area requirements on the lots;(k) If an escrow is to be funded pursuant to § 1708.2, the covenant shall include the attachments required by § 1708.2(c) and an acknowledgment by the owner of the receiving lot, on behalf of itself and its successors and assigns that:- (1) It has voluntarily established or consented to the establishment of an escrow account;
18. (2) The Government of the District of Columbia will be acting in reliance upon the establishment and funding of the escrow if a certificate of occupancy is issued for nonresidential uses on the sending lot prior to the issuance of a certificate of occupancy for residential uses on the receiving lot;
19. (3) The attached escrow agreement requires the release of the escrow funds and any accrued interest thereon to the D.C. Housing Production Trust Fund, or other entity as directed by the Zoning Commission, under the circumstances stated in § 1708.5 (b); and
20. (4) Such a release neither negates the present or future owners' obligations under the covenant and this chapter to reserve, design, construct, cause to be occupied, and maintain in perpetuity an area on the receiving lot equal to the gross floor area of required preferred uses received nor constitutes such an extraordinary or exceptional circumstance or condition as to justify the grant of a variance from the strict application of the requirements of this chapter;(l) The declaration of covenants shall require the owner of the receiving lot to reimburse the Government of the District of Columbia for such reasonable expenses as the District incurred to successfully enforce its rights under the declaration;(m) The declaration of covenants shall expressly state that it may be amended or terminated only with the approval of the Zoning Commission, after public hearing and only upon a finding that the proposed modification or termination is fully justified and consistent with the purposes of this chapter; and(n) The declaration of covenants shall be approved in content by the Zoning Administrator and certified for legal sufficiency by the Office of the Attorney General. The declaration shall also contain a written statement by the Director of the D.C. Office of Planning attesting to:

(1) The lots' eligibility to allocate residential and nonresidential uses;

(2) The accuracy of the computations with respect to the amount of required preferred uses allocated; and

(3) Whether, after the transfer, the combined lots will conform to the maximum and minimum gross floor area requirements on the lots before any such transfer.

1708.2 In accordance with 11 DCMR § 1706.13(b), a certificate of occupancy may be issued for nonresidential uses on a sending lot or lots that allocated required residential uses to a receiving lot, without regard to the status of the receiving lot, if:

(a) An escrow account is established with a financial institution, including a title insurance company, that is recognized to be in good standing by the District of Columbia or other jurisdiction in which it conducts business;

(b) The escrow account is funded in accordance with § 1708.3; and

(c) The following are attached to the combined lot development covenant recorded and filed in accordance with § 1708.1 (i):

(1) A certification by the financial institution of the amount of funds received;

(2) An acknowledgment by the financial institution that the funds will be disbursed only in accordance with the mandatory escrow terms in § 1708.5; and

(3) A copy of the agreement governing the escrow account.

1708.3 The escrowed funds shall be equal to the amount computed according to either the formula E = GFA (AV / LA) / NRFAR x 50%, or the formula E = GFA x $15, whichever is less. The values in these formulae shall have the following meaning:

(a) E = The amount deposited into escrow;

(b) GFA = The gross floor area of additional nonresidential uses that will be achieved on the sending lot as a result of the combined lot transfer, above that to which the sending lot would have been permitted as a matter of right, as measured in square feet;

(c) AV = The assessed value of the sending lot's land and improvements, as of thirty (30) days prior to the escrow funding date, as that value is indicated on the records of the Office of Tax and Revenue;

(d) LA = The number of square feet of land included in the sending lot;

(e) NRFAR = The permitted nonresidential FAR before the transfer; and

(f) 50% = The proportion of commercial value that has been determined to be appropriate for the escrow.

Illustration: A sending lot zoned DD/C-2-C wishes to transfer its entire residential requirement. The lot is 20,000 square feet in size. As a consequence of its DD/C-2-C zoning, the lot's permitted density is 8.0 FAR, of which at least 4.5 FAR (that is, 90,000 square feet of gross

floor area) must be devoted to residential uses. The lot's assessed value, as of 30 days prior to escrow funding, was $ 700,000.

Based upon this scenario, the following formula values apply: GFA = 90,000 sq. ft.; AV = $ 700,000; LA = 20,000 sq. ft.; and NRFAR = 3.5 (8.0 - 4.5 = 3.5 of permitted nonresidential FAR).

The escrow funding would be calculated under the formula E = GFA (AV / LA) / NRFAR x 50% as follows: 90,000 sq. ft. x ($ 700,000 / 20,000 sq. ft.) / 3.5 x 50% = $ 450,000. Under the E = GFA x $ 15 formula, the escrow would be calculated as follows: 90,000 sq. ft. x $ 15 = $ 1,350,000. Since the result of the first formula ($ 450,000) is less than result of the second formula ($ 1,350,000), the minimum escrow funding would be $ 450,000.

1708.4 Escrowed funds shall be invested in investment grade securities.

1708.5 The escrow account agreement shall include terms providing that:

(a) Upon certification by the project architect to both the financial institution holding the funds and the Zoning Administrator that construction of all the residential uses required for the combined lot are at least 50% complete on the receiving lot, the funds held in the escrow account shall be disbursed in accordance with the applicable terms of the escrow agreement.

(b) If the above certification is not made within five (5) years after the filing date of the combined lot development covenant, or such further period of time as may have been permitted by the Zoning Commission pursuant to § 1708.6, escrowed funds and any accrued interest shall be released to the District of Columbia Housing Production Trust Fund and designated for the financing of housing in the DD Overlay District in the same Housing Priority Area as the receiving lot. The escrow agent shall advise the Zoning Commission if the funds cannot be released in accordance with this provision and, in that event, shall release the funds as the Commission may thereafter direct, consistent with the purposes of this chapter.

1708.6 The owner of the receiving lot may request the Zoning Commission to allow an additional period, up to a maximum of three (3) years, to make the certification set forth in § 1708.5(a). The request shall identify why the certification could not be made within the five-year (5-year) period provided and be accompanied by a timetable for construction and occupancy of the residential uses required for the combined lot. The Commission may grant the request upon a showing that the owner has proceeded with due diligence and in good faith in constructing the required residential uses.

SOURCE: Final Rulemaking published at 38 DCR 612, 635 (January 18, 1991); as amended by: Final Rulemaking published at 39 DCR 8312, 8316 (November 13, 1992); Final Rulemaking published at 40 DCR 3749 (June 11, 1993); Final Rulemaking published at 47 DCR 9741-43 (December 8, 2000), incorporating by reference the text of Proposed Rulemaking published at 47 DCR 8335, 8482-83 (October 20, 2000) and Final Rulemaking published at 49 DCR 881, 883-89 (February 1, 2002); as corrected by Errata Notice published at 58 DCR 4314, 4315 (May 20, 2011).