Development Department
City Council Working Session – May 14, 2015
STAFF REPORT – CONVERTIBLE SPACE
The Issue:
In March, 2015 the Mayor and City Council directed staff to prepare a report on the implications
of incorporating a definition of the term “Convertible Space” in the newly adopted Unified
Development Ordinance and discuss how the practice might be used in development projects in
Chamblee that are required to incorporate nonresidential development on the ground floor of
mixed-use developments with residential apartments on upper floors. This report is derived from
a variety of sources including web-based research and interviews.
Definition
The term “convertible space” is an unqualified term. However the way it has been used in
Chamblee is not to be confused with the term, “flex-space”. The term “flex space” is used most
often to refer to large warehouse buildings with long spans and high ceilings that can be readily
subdivided and fitted for changing tenants needing variable proportions of unconditioned and
unfinished warehouse/storage space and also finished conditioned space to be used for of
offices, showrooms and commercial sales floors. The flexibility to move partitions and building
systems within these cavernous rooms makes them easier to rent as tenant mixes change over
time. Chamblee has a large supply of these buildings and probably does not need to build more.
Another use of the term “flex space”, found in Wikipedia, refers to open-floor offices designed
with furnished “cubes” that may be occupied by different staff during the same workday. An
example would be an office that has a morning crew that leaves at noon to make sales calls the
rest of the day, being replaced by an afternoon shift that comes in later in the day and uses the
same cubes for their office work. There are even commercial office spaces that are designed
like office/hotels for travelling sales staff who rent them by the day or by the hour. Such
furnished spaces provide all the comforts of a personal office space with the convenience of
shared networks, copiers, break rooms and meeting rooms.
Still another use of the term “flex-space” is for the conversion of parking garages into habitable
space. The practice has been widely applied in Singapore and was the recent subject of a
student design project by the Savannah College of Art and Design in Atlanta. For more see ULI
article. “Universal Structures as Long-Term Sustainable Assets” by Will Macht (January 23,
2015).
However in Chamblee, we are using the term “convertible space” to refer to space in the
ground floor of multi-family residential buildings that is designed to readily convert from
their initial use as apartments to retail and commercial uses at a later time when the real
estate market matures in a developing mixed-use environment. Another recent article by
Will Macht published by ULI in 2014 is titled “Avoiding Retail Vacancies with Flexible
Retail/Residential Design”. This article extolled the virtues of this form of “convertible space” and
described two examples that I will refer to later.
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Council Work Session: May 14, 2015
Need
Professor Macht attributes the need for convertible space to the emergence of contemporary
zoning policies that require multi-story buildings to become mixed-use developments with
continuous, active storefronts lining their street frontages. He says this can be difficult for the
real estate development industry: “If these city centers do not have existing viable retail cores,
the introduction of the kinds of retail shops that mix with more urban housing becomes difficult.
Retailers are reluctant to open stores in places without a critical mass of other stores and
shoppers. Retail space built under housing is more difficult and expensive to develop than either
space alone. Lenders are especially wary of having vacant stores below rental housing.
Housing developers are reluctant to hold, lease, and operate small retail spaces that are
peripheral to their principal development business.”
I became familiar with this problem at least 10 years ago in other cities where I consulted,
including Tallahassee and Orlando, Florida. I was told of multi-story mixed-use buildings in
Orlando in which the required ground-floor retail spaces were built as “whiteboxes” less than 20
feet deep, and for years their storefronts were lined with brown paper or mock displays in a 5 ft.
deep ‘window-box’ because there were not enough merchants to lease all the commercial
space that had been required by local zoning.
According to Professor Macht, apartment developers are reluctant to build commercial space
because “retail spaces must comply with more stringent zoning and building code requirements,
require more durable materials and storefronts, and cost more to build. And architects strain to
accommodate both the taller ceiling heights and parking requirements associated with retail
space and the predominant housing components in such projects.”
This has been borne out in discussion with our Building Official, Mark Mitchell of SafeBuilt, who
reviews Chamblee’s multi-story residential, commercial and mixed-use buildings for compliance
with national building codes and fire codes. One of the principal issues would be fire safety. The
Fire Safety Code requires fire rated partitions to separate residential and commercial
occupancies. Residential and commercial spaces that adjoin each other on the same floor of a
building must be separated by two-hour rated fire walls and fire doors that are sealed from the
floor to the underside of the roof or floor structure above. In addition, commercial uses that are
below residential uses must provide a fire-rated barrier between the commercial first floor and
the residential second floor. The International Building Code also limits the floor area, building
height (in feet) and number of stories for these mixed-use structures based on the materials
used for their structural frame (wood, fire-retardant wood, steel or concrete) and whether or not
they are sprinkled.
Scenarios
In order to illustrate these limitations, Mark and I prepared three scenarios for incorporating
convertible space into a multi-story building:
Scenario one: All concrete and steel frame. This form of construction is unlimited in height and
horizontal expanse. According to George Reid of CBRE the construction cost ranges from $205
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Council Work Session: May 14, 2015
to $ 215 per square foot. However due to the relatively high construction cost, this form of
structure is seldom used unless the building will be more than 5 stories in height.
Scenario two: Podium construction with/without sprinklers. Podium construction starts with a
ground floor framed in concrete topped with a concrete floor above that provides a 3 hour rating.
However the upper 3 – 4 floors would be framed in wood. The table below provides a summary
of what is allowed in terms of floor area per story and building height. The floor areas per story
could be increased substantially with sprinkler and road frontage modifiers.
Podium Design
Not sprinkled
Sprinkled
Height in
stories
4
5
Height in feet
Max. floor area
70
70
12,000 sq. ft.
36,000 sq. ft.
According to George Reid of CBRE the construction cost ranges from $155 to $165 per square
foot.
Examples of Podium Construction Method
Scenario three: All wood framing with/without fire sprinklers. The table below provides a
summary of what is allowed in terms of floor area per story and building height. Again, the floor
area per story could be increased substantially with sprinkler and road frontage modifiers.
All Wood Frame
Not sprinkled
Sprinkled
Height in
stories
3
4
Height in feet
Max. floor area
50 ft.
50 ft.
12,000 sq. ft.
36,000 sq. ft.
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According to George Reid of CBRE the construction cost ranges from $ 110 to $130 per square
foot. This makes Scenario three the choice of most builders when they have this option.
Example of Retail on Ground Using
Wood Framing Source: ULI; William Macht
In summary, the comparison of these scenarios shows that requiring concrete and / or steel
frame in these buildings results in a construction cost that is about 75 percent higher than all
wood frame construction and about 30 percent higher than podium style construction. However,
the podium style construction allows the building to have an extra story and up to 20 feet of
additional height. When the first floor height is intended to be 18 feet, as required for Storefront
Streets in Chamblee, the extra strength and height of podium construction is useful for a 4 or 5
story building. The concrete frame of the podium style allows larger spans that allow more
flexible space arrangements for a variety of ground floor commercial tenants. Also, a podium
form of construction provides a relatively rigid base so that wood framed construction above can
be flexible in its arrangement of load-bearing walls. The main issue is that it results in a
construction cost that averages about one-third more per square foot than an all wood framed
building of the same height.
Issues
In addition to fire protection there are several other issues that need to be considered when
building mixed-use multi-story buildings with “convertible space”:

Floor height – Commercial spaces need higher ceilings. Our ordinance requires them to be
18 ft. along certain storefront streets. If the ground floor is first built out with “convertible”
residential uses with this requirement, it may be possible to build two-story lofts initially and
then take out the second floor of these units when they are converted to commercial use.
Alternatively the residential uses could be built on a raised floor in order to provide raised
entrances with low balconies or entrance stoops to provide more privacy for the ground floor
apartments.

Column spacing and joist spans – residential units need a column spacing and joist span of
about 24 feet, while most retail and restaurant uses would like to have clear spans of 30-40
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Council Work Session: May 14, 2015
feet. If parking garages are below, their span is typically 60-65 ft. Vertical mixed-use often
has to resolve this structural issue of stacking uses that need varying column spacing and
joist spans. Podium construction or concrete/steel framing gives more design flexibility but is
much more expensive than wood framing.

Electrical systems – Romex wiring may be used for residential construction. More expensive
metal-sheathed conduit is required for commercial construction. Breaker systems are also
different.

Plumbing systems – Residential floors have plumbing for kitchens and bathrooms on a
regular spacing across the entire floor. General commercial uses have many fewer plumbing
fixtures. Restaurants have large, concentrated areas of plumbing but only in the kitchen
area. Kitchen sinks in restaurants require external grease traps that are not required by
other uses.

HVAC/mechanical systems – The number, size and duct distribution used for air handling
equipment is often very different for residential and commercial uses. Restaurants require
special ventilation for kitchens. Residential and commercial HVAC systems cannot be
combined without fire dampers.

Parking - In the UDO, parking ratios are different for apartments, offices, general
commercial, and restaurant uses. The table below shows how the parking requirements vary
for a building floor of 10,000 sq. ft. used for each type of use. It assumes that apartments
average a net of 800 sq. ft. per unit, with a gross area of 1,000 sq. ft. per unit when corridors
and stairs are included in the floor area.
Minimum Off-street Parking Requirements for a 10,000 sq. ft. floor, by use
Use: Apartments
Spaces/1000 sq. ft.
Total parking spaces for 10,000
sq. ft.
1.5/unit
15
Commercia
l
5
50
Office
4
40
Restaura
nt
10
100
This chart shows that a ground floor of 10,000 sq. ft. that is initially built as residential
apartments then converted to space that is half retail and half restaurants would require
about 5 times as much parking (going from 15 to 75 required spaces) after the conversion is
made. These 60 additional spaces would have to be built in to original project or added off
site unless the residential leases allowed the parking spaces to be shared with the
commercial tenants when they move into the project later.

Ground-floor residential push-back: At the same time, the developers of multi-story apartment
buildings face extra challenges in designing and leasing the residential units on the ground floor when
they open directly onto downtown streets because of the need to provide privacy and security at
grade level.
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Case Studies
Here are two case studies that provide examples of the use of convertible space in mixed-use
projects similar to ones we see coming in Chamblee.
Case Study #1: Oaks 5th Street Crossing - Garland, TX
This is a mixed-use development with 189 apartments in a four-story building with four street
frontages totaling 1300 linear feet. The entire building is built with wood framing and is sprinkled
so it could be no more than four stories in height. The market would not support the 90,000 sq.
ft. of retail that it would take to fill 1300 linear feet of street frontage. So they cut the retail depth
down to just 30 ft. to cover as much frontage as possible and were able to put in 12,000 sq. ft.
or retail along one of the four street frontages. The rest had to be built as convertible residential
space. Although the column spacing was set at 24 ft. x 30 ft., a spacing that makes retail uses
difficult, they used engineered wood truss-beams to enable larger spans and to provide space
through which mechanical systems can be re-arranged. They also added extra plumbing lines
under the slab to provide chases for future grease traps located outside under the parking
spaces in order to facilitate conversion of the residential space to restaurants.
Case Study #2: Union at Carrollton Square – Carrollton, TX.
This is a larger mixed use project with 295 apartments and 10,500 sq. ft. of convertible space
for future retail. This project is done through a joint public/private partnership in which the public
sector is building the structured parking and the public improvements. The ground floor plans
provide for 60 ft. deep retail spaces using a combination of steel framing and wood framing for
non-load-bearing walls, a compromise between the construction methods of podium design with
concrete and all wood framing on the ground floor. Half the ground-floor space was
programmed as live/work units planned for cost-effective conversion to retail space. It was
designed with tall ceiling heights, divided glazing systems and a covered arcade that can be
either retail or residential.
Take-aways from case studies:
1. The retail modules that derive from convertible residential units in most convertible
spaces are relatively small and less flexible than retail space in typical strip centers. This
is risky today because the retail market is being threatened by booming on-line retail
sales and retail consolidation from big box competitors. However these smaller
“boutique” scaled spaces can be large enough to house many of the services that intown residents want in their walkable lifestyle centers, such as cafés, pubs, and bistros;
and these kinds of establishments cannot be replaced with online or big-box alternatives.
2. The author points out that installing deep header beams under the residential bearing
walls above the first floor would enable them to knock out partitions between dwelling
units on the ground floor, thus increasing the spans to 36 ft. or 48 ft. later when
converting the ground floor to retail.
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3. Another concern is how to design the ground floor residential units in busy downtown
areas. With proper design, apartments on the ground floor can have advantages. For
example, residents and their pets can reach units and parking without having to use an
elevator. Home offices are more accessible to daytime visitors. Ground-floor spaces can
have significantly taller ceilings, which might accommodate small loft spaces and, when
the market improves, retail conversion. Floors can be solid concrete, lending more
permanence and providing more choices for floor finishes for residents. However,
privacy on the ground floor can be a major detraction for units that open directly onto the
street. Ground floor residential units need to have a buffer from the public realm of the
street. The solution in Garland was to create a transition zone around the exterior that
was comprised of diagonal parking. Accessible, convenient short-term parking is
important for retailers and creates a protective barrier from the automobile traffic on the
street. Next, 15 feet of streetscape was provided to create more space between the
residential units and the street and to allow room for outdoor dining when restaurants
take the place of the residential units. Some doorways to the ground floor residential
uses were elevated – accessed by short stairs and stoops. Store windows were reduced
in size to a more residential scale. Foundation planters were sited to create more private
separations for the spaces from each other and from the street. Street furniture was
used to direct pedestrian traffic closer to the curb.
4. There appears to be a lack of regulation designed to address convertible space. None of
the jurisdictions we have seen published formulated special regulations for these
situations. However Chasidy Allen, Community Development Director of Garland, Texas
says that their City is considering the following new language in their Development
regulations:
‘Required Flex Space at Grade. Where required “Flex Space” is designated on the
Framework Plan, the ground floor adjacent to the street shall be constructed to retail
building standards, including a minimum floor to ceiling height of sixteen feet. The
minimum height may be reduced to twelve feet by Minor Waiver. These ground floor
areas may be occupied by any allowed use, but shall be constructed to accommodate
retail and restaurant uses in response to market demand.’
5. Finally, Will Macht suggests that mixed use developments in untested markets may
need active public partners in order to make it to self-sufficiency. In the case of Oaks 5th
Street Crossing, the City plans to lease some of the space in the second phase since
City Hall is right across the street.
The Role of the UDO
The primary purpose of this report is to point out the role of the Unified Development Ordinance
in managing the potential application of convertible space to mixed-use developments in
Chamblee. In summary, staff recommends that the following issues be discussed by the Mayor
and Council to give staff further directions concerning amendments to the UDO to address
convertible space:
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1. Definitions – The UDO can define “convertible space” so that the term has a precise
meaning when used elsewhere in the UDO or in conditions of approval drafted by staff or
Council members. Another uncertain term that may need a definition is ‘non-residential’
space. The question here is whether the City wants to consider the leasing offices, onsite
storage facilities, parking decks, and fitness centers of multi-family buildings to count as
non-residential space.
2. Design standards for convertible space – If desired, the UDO can use text and graphics to
identify several design features that buildings with convertible space must incorporate in
order to show that they are truly built for conversion from residential to commercial space.
The ground-floor residential units need extra consideration for privacy. Residential space
that is truly convertible needs to meet building codes for fire separation between uses, have
higher floor-to-ceiling heights, structures that can allow longer spans, and extra chases for
mechanical and plumbing systems.
3. Parking – Convertible space needs to have explicit arrangements for shared parking or
provide excess parking that can be used for restaurants and retail uses that have greater
parking needs than the residential spaces that they will replace.
Two more policy questions need discussion and direction from the Mayor and Council:
1. Limits on the amount (or percentage) of ground floor area that would be permitted to be
“convertible space”. Does the Council want to set a minimum amount or minimum
proportions of mixed use buildings that have to be non-residential? In so doing, how would
convertible space be treated?
2. Limits on the time period for converting from residential to commercial use. The research we
have done consistently shows that the timing for converting ground-floor residential space to
commercial space has been left to the discretion of the developer based on market factors.
However, we have found no documentation of this conversion actually occurring. Although
the explanation may be that “convertible space” is a relatively new idea, it would appear that
if the conversion timetable is indefinite it may never happen.
Staff Recommendation:
Staff has prepared this report for discussion by the Mayor and City Council and is prepared to
seek their input and direction prior to making further changes to the UDO.
___________________________________________________________________________
CITY COUNCIL ACTION:
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