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Home My WebLink AboutPZ - Flex Space Requirements letter 16 ADLER INDUSTRIAL REAL ESTATE MANAGEMENT & DEVELOPMENT August 6, 2025 Caleb Hood City of Meridian 33. E Broadway Ave Meridian, ID 83642 RE: Flex Use—Office/Showroom Requirements Caleb, Thank you very much for considering a change to the Flex Specific Use Standards, and for being open to feedback from the development community on the issue. While the currently proposed UDC change is headed in the right direction, it is still too strict and will force the majority of flex tenants to either apply for conditional use permits or find space in adjacent cities. To capture the majority of flex tenants,we would propose the minimum office/showroom space be adjusted to 15% in M-E Districts and 20% in C-G Districts. The currently proposed UDC change is pasted below for reference: 11-4-3-18-Flex space A.Office and/or retail showroom areas shall comprise a minimum of thirty(30)percent of the structure and/or tenant space in the C-C District,twenty-five(25)percent in the C-G and M-E Districts,and twenty(20) percent in the I-L and I-H Districts. B. Light industry and warehousing shall not comprise more than seventy(70)percent of the tenant space in the C-C District,seventy-five(75)percent in the C-G and WE Districts,and eighty(80)percent in the I-L and I- H Districts. THE MIXED EMPLOYMENT ZONING IS NOT DEVELOPABLE In the Ten Mile Interchange Specific Area Plan (TMISAP),the mixed employment(ME)area was envisioned to be a transition, a buffer, between commercial, residential and industrial uses. It was meant to"provide a variety of flexible sites for small, local or start-up businesses, as well as site for large national or regional enterprises". The ME zoning was later created to help fulfill this vision. Unfortunately, under the current code the uses allowed in the ME zone are so specific they do not appeal to enough tenants to justify developing. Because of this,while the rest of the commercial and residential areas of the TMISAP are developing nicely and generating jobs and taxes for Meridian,the 411 acres of ME area are either: • Not annexed or zoned - 139 acres, 34% (reference Figure 1 below) • Zoned I-L and developing as industrial- 176 acres,43% • Zoned C-G and developing as commercial- 15 acres, 4% • Zoned M-E but not developed -75 acres, 18% o Adler is about to start constructing the first two buildings built in an M-E zone, but these are only possible because of a CUP expanding the allowed uses in this zone 8665 W. EMERALD STREET STE. 200, BOISE ID 83704 1 208.506.7170 1 ADLER-INIDUSTRIAL.COM None of these options fulfill the vision of the TMISAP for the ME area to be a transition between commercial, residential and industrial uses. Rather the ME area is simply developing as industrial or commercial, or not developing at all. I MIXED EMPLOYMENT + AREAS FROM TMISAP I SHOWN IN BLUE ZONED I INDUSTRIAL IVL) 1 1 96 AG NOT ANNEM 10 OR ZONED I66 AC 1 ZONED INDUSTRIAL t I-L) BO AC cr ICNED ME NOT DEVELOPED 47 AC ZONED COMMERCIAL ;C-G)-15 AC 2014E0 M-E NOT ANNE1[E0 NOT OR ZONED DEVELOPED 73 AC 28 AC Figure 1:Current Zoning/Development in TMISAP Mixed Employment Areas So,what's the solution? Code needs to be updated to allow a broader range of transition uses in the ME zone. Flex Space is one of the best examples of a transition use, and is an ideal buffer between commercial, residential and industrial uses. Appealing to a broader range of flex tenants,will allow the ME zone to develop as intended. APPEALING TO MORE FLEX TENANTS So,what do flex tenants want? Most want to be 25-30%Office/Showroom 5% located near commercial areas since they have public facing showrooms;the ME area is ideally 410- e%Showroom 22/o located for them. They want a total tenant space of less than 25,000sf with office/showroom in the front and product storage and distribution in the back. Based on our portfolio,the majority of flex tenants , (83%)want less than 25%office/showroom. The currently proposed UDC language would still 10-15%Office/Showroom exclude 83%of our flex tenants in the C-G and M-E districts. These flex tenants would either have to: • Apply for a conditional use permit Figure 1:Adler Industrial's Flex Tenants 8665 W. EMERALD STREET STE. 200, BOISE ID 83704 1 208.506.7170 1 ADLER-INDUSTRIAL.COM 2 • Build more office/showroom than they need, resulting in less efficient space and higher rents • Look elsewhere for space Some of our flex tenants in Meridian include 84 Lumber(12%office/showroom), Codale Electric(20% office/showroom), and Motion &Flow(18% Office/showroom). We understand that Flex Space should be distinct Manufacturing from Warehouse Space. Adler Industrial owns or 2.8 manages more than 4,000,000 square feet of space R&D in the Treasure Valley,which is occupied by 126 �o.e% Auto tenants. As shown in Figure 1, about 82%of our total 1.0% space is used for warehouse&distribution with / office ranging from 3-7%of the space. As long as Flex has an office requirement greater than 10%, it I Flex will exclude typical warehouse and distribution 13.2% Distribution tenants. To allow the mixed employment area to develop as a transition between commercial, residential and industrial uses the code needs to appeal to a broader range of flex tenants. To appeal to the 66hhhh' majority of flex tenants,the minimum office/showroom space should be adjusted Figure 3:Adlerindustrial's Portfolio to 15%in M-E Districts and 20%in C-G Districts. Since this is a minimum requirement,the average office/showroom space will exceed these amounts and will likely be closer to 20-25%, similar to the percentages recommended by staff. Thankyou for your consideration on this matter, lWo4 0,stosc Will Goede VP of Development Adler Industrial 8665 W. EMERALD STREET STE. 200, BOISE ID 83704 1 208.506.7170 1 ADLER-INDUSTRIAL.COM 3 16 ADLER INDUSTRIAL REAL ESTATE MANAGEMENT & DEVELOPMENT August 6, 2025 Caleb Hood City of Meridian 33. E Broadway Ave Meridian, ID 83642 RE: Flex Use—Office/Showroom Requirements Caleb, Thank you very much for considering a change to the Flex Specific Use Standards, and for being open to feedback from the development community on the issue. While the currently proposed UDC change is headed in the right direction, it is still too strict and will force the majority of flex tenants to either apply for conditional use permits or find space in adjacent cities. To capture the majority of flex tenants,we would propose the minimum office/showroom space be adjusted to 15% in M-E Districts and 20% in C-G Districts. The currently proposed UDC change is pasted below for reference: 11-4-3-18-Flex space A.Office and/or retail showroom areas shall comprise a minimum of thirty(30)percent of the structure and/or tenant space in the C-C District,twenty-five(25)percent in the C-G and M-E Districts,and twenty(20) percent in the I-L and I-H Districts. B. Light industry and warehousing shall not comprise more than seventy(70)percent of the tenant space in the C-C District,seventy-five(75)percent in the C-G and WE Districts,and eighty(80)percent in the I-L and I- H Districts. THE MIXED EMPLOYMENT ZONING IS NOT DEVELOPABLE In the Ten Mile Interchange Specific Area Plan (TMISAP),the mixed employment(ME)area was envisioned to be a transition, a buffer, between commercial, residential and industrial uses. It was meant to"provide a variety of flexible sites for small, local or start-up businesses, as well as site for large national or regional enterprises". The ME zoning was later created to help fulfill this vision. Unfortunately, under the current code the uses allowed in the ME zone are so specific they do not appeal to enough tenants to justify developing. Because of this,while the rest of the commercial and residential areas of the TMISAP are developing nicely and generating jobs and taxes for Meridian,the 411 acres of ME area are either: • Not annexed or zoned - 139 acres, 34% (reference Figure 1 below) • Zoned I-L and developing as industrial- 176 acres,43% • Zoned C-G and developing as commercial- 15 acres, 4% • Zoned M-E but not developed -75 acres, 18% o Adler is about to start constructing the first two buildings built in an M-E zone, but these are only possible because of a CUP expanding the allowed uses in this zone 8665 W. EMERALD STREET STE. 200, BOISE ID 83704 1 208.506.7170 1 ADLER-INIDUSTRIAL.COM None of these options fulfill the vision of the TMISAP for the ME area to be a transition between commercial, residential and industrial uses. Rather the ME area is simply developing as industrial or commercial, or not developing at all. I MIXED EMPLOYMENT + AREAS FROM TMISAP I SHOWN IN BLUE ZONED I INDUSTRIAL IVL) 1 1 96 AG NOT ANNEM 10 OR ZONED I66 AC 1 ZONED INDUSTRIAL t I-L) BO AC cr ICNED ME NOT DEVELOPED 47 AC ZONED COMMERCIAL ;C-G)-15 AC 2014E0 M-E NOT ANNE1[E0 NOT OR ZONED DEVELOPED 73 AC 28 AC Figure 1:Current Zoning/Development in TMISAP Mixed Employment Areas So,what's the solution? Code needs to be updated to allow a broader range of transition uses in the ME zone. Flex Space is one of the best examples of a transition use, and is an ideal buffer between commercial, residential and industrial uses. Appealing to a broader range of flex tenants,will allow the ME zone to develop as intended. APPEALING TO MORE FLEX TENANTS So,what do flex tenants want? Most want to be 25-30%Office/Showroom 5% located near commercial areas since they have public facing showrooms;the ME area is ideally 410- e%Showroom 22/o located for them. They want a total tenant space of less than 25,000sf with office/showroom in the front and product storage and distribution in the back. Based on our portfolio,the majority of flex tenants , (83%)want less than 25%office/showroom. The currently proposed UDC language would still 10-15%Office/Showroom exclude 83%of our flex tenants in the C-G and M-E districts. These flex tenants would either have to: • Apply for a conditional use permit Figure 1:Adler Industrial's Flex Tenants 8665 W. EMERALD STREET STE. 200, BOISE ID 83704 1 208.506.7170 1 ADLER-INDUSTRIAL.COM 2 • Build more office/showroom than they need, resulting in less efficient space and higher rents • Look elsewhere for space Some of our flex tenants in Meridian include 84 Lumber(12%office/showroom), Codale Electric(20% office/showroom), and Motion &Flow(18% Office/showroom). We understand that Flex Space should be distinct Manufacturing from Warehouse Space. Adler Industrial owns or 2.8 manages more than 4,000,000 square feet of space R&D in the Treasure Valley,which is occupied by 126 �o.e% Auto tenants. As shown in Figure 1, about 82%of our total 1.0% space is used for warehouse&distribution with / office ranging from 3-7%of the space. As long as Flex has an office requirement greater than 10%, it I Flex will exclude typical warehouse and distribution 13.2% Distribution tenants. To allow the mixed employment area to develop as a transition between commercial, residential and industrial uses the code needs to appeal to a broader range of flex tenants. To appeal to the 66hhhh' majority of flex tenants,the minimum office/showroom space should be adjusted Figure 3:Adlerindustrial's Portfolio to 15%in M-E Districts and 20%in C-G Districts. Since this is a minimum requirement,the average office/showroom space will exceed these amounts and will likely be closer to 20-25%, similar to the percentages recommended by staff. Thankyou for your consideration on this matter, lWo4 0,stosc Will Goede VP of Development Adler Industrial 8665 W. EMERALD STREET STE. 200, BOISE ID 83704 1 208.506.7170 1 ADLER-INDUSTRIAL.COM 3