A friend asked me if every good urban building had to come up precisely to the property line i.e. the sidewalk, in accordance with the Three Rules. I can understand his concern.
The answer is "No."
Can there be any setbacks and small plazas here and there? "Absolutely yes."
The Three Rules outline a "default position." In legal terms (and since we assume the continued existence of zoning etc etc., that's not an inconsiderable consideration) Rule #1 ("build to the sidewalk") is a "rebuttable presumption." That means that the expectation is that a building will adhere to a consistent streetfront. But if the developer wants, for his own reasons, to set back from the property line to create a plaza, the legal burden will be on him to show that such a deviation from the default position will create a successful pedestrian environment.
Sounds legalistic and bureaucratic. And it is. No way around that. But it lays out a clear expectation of how a streetfront is to be built, makes permitting "as-of-right" under that condition, and reasonably places the effort on anyone who wishes to do something different. Doesn't mean you can't create an open space of some kind but you certainly don't get any bonus points and you actually have to demonstrate why and how it works to create a better streetfront.
The end result will be fewer huge plazas (most of which were created to satisfy a "bonus" program in which the developer was able to build a bigger building in exchange for providing the public with useless "open space") and thus a more traditional pedestrian environment.