Opinion
794 C.D. 2022 958 C.D. 2022
07-19-2024
In re: Appeal of Council Member Cindy Bass, & East Mount Airy Neighbors & Pleasant Advisory Council From Decision of City of Philadelphia Zoning Board of Adjustment Appeal of: Cindy Bass, East Mount Airy Neighbors, and Pleasant Advisory Council
Argued: April 11, 2024
BEFORE: HONORABLE ANNE E. COVEY, Judge HONORABLE CHRISTINE FIZZANO CANNON, Judge HONORABLE MARY HANNAH LEAVITT, Senior Judge
OPINION
MARY HANNAH LEAVITT, PRESIDENT JUDGE
Philadelphia City Council Member Cindy Bass, East Mount Airy Neighbors, and Pleasant Advisory Council (collectively, Objectors) have appealed an order of the Court of Common Pleas of Philadelphia County, Civil Division (trial court), that affirmed the grant of a variance by the Philadelphia Zoning Board of Adjustment (Zoning Board). The use variance will allow the development of a vacant and blighted property at 6717 Chew Avenue (Property) in Philadelphia with a multi-family residential use in a district zoned for commercial uses. Objectors contend that the trial court erred because the evidence presented to the Zoning Board did not satisfy the standards for a variance set forth in the Philadelphia Zoning Code.
See Philadelphia County, Pennsylvania, Zoning Code, as amended (2012) (Zoning Code).
Background
The Property at issue is a vacant parcel of land approximately 14,000 square feet in size. The Property is located in the "CA-1," "Auto-Oriented Commercial District," which is intended to accommodate "shopping centers and other destination-oriented uses in which a large percentage of customers will arrive by automobile." Zoning Code, §14-402(1)(c)(.7). The table of uses for commercial districts states that a multi-family residential use in the CA-1 District is "not allowed." Zoning Code, Table §14-602-2. The Property, formerly used as an auto repair shop, is abandoned and in need of substantial environmental remediation.
CA-1 uses include medical offices, convenience stores and restaurants. Notes of Testimony (N.T.), 5/5/2021, at 11; Reproduced Record at 84a (R.R__.).
The Property is owned by 6717 Chew Avenue, LLC (Developer). On August 20, 2020, Developer applied to the Philadelphia Department of Licenses and Inspections (Department of L&I) for approval to construct a 4-story apartment building with 37 residential units and accessory parking for motor vehicles and bicycles. Reproduced Record at 60a (R.R.__). On September 17, 2020, the Department of L&I refused the application for three reasons:
• Under Table 14-602-2, a multi-family household living use is expressly prohibited in the CA-1 commercial zoning district;
• Under Table 14-701-3, the maximum occupied area in the CA-1 commercial zoning district shall be 60% whereas 63.3% is proposed;
• Under Table 14-801-5, 97 parking spaces are required in the CA-1 commercial zoning district for the proposed building but only 21 will be provided.See L&I Notice of Refusal, 9/17/2020; R.R. 65a. On September 18, 2020, Developer appealed the Department of L&I's refusal to the Zoning Board.
While its appeal was pending, as required by the Zoning Code, Developer met with community residents and organizations, including the East Mount Airy Neighbors and the Pleasant Advisory Council, to discuss the proposed project. At a public meeting, residents and the above-listed organizations expressed concern about the impact of the project on traffic, stormwater, and the adjacent Pleasant Park. To address these concerns, Developer made changes to the design of the project, including: a reduction in the number of apartment units; a 10% reservation of units for affordable housing; a move of the parking garage entrance from Slocum Street to Chew Avenue; an increase in the proposed set back from Pleasant Park, which borders the Property; and a commitment to donate $6,000 annually to Pleasant Park for a period of 10 years.
Hearings on Developer's appeal were conducted virtually by the Zoning Board on May 5, 2021, and June 30, 2021. Developer's counsel, Hercules W. Grigos, began the hearing with an explanatory background on the variance application. He described the Property as abandoned, blighted, and in need of costly environmental remediation. This remediation will require the removal of underground petroleum storage tanks and contaminated soil, to be followed by ongoing ground water monitoring. In addition, the existing auto repair shop must be demolished in advance of any development. Grigos stated that, at present, there is no market for new commercial development in the area of Chew Avenue where the Property is located.
Developer presented the testimony of the project engineer and architect, David Plante of Ruggiero Plante Land Design, and a real estate developer, Jonathan Thomas. Plante and Thomas presented data and testimony on the physical condition of the land and on the market impediments to a CA-1 type use of the Property. Developer presented shadow studies to address the concern expressed by members of the community that the project would block sunlight from the Pleasant Park community pool during the summer months. Finally, Developer presented letters from members of the community who supported the project.
Both witnesses separately testified to the accuracy of counsel's statements about the Property in his opening statement.
Thomas confirmed that there was no capacity on this part of Chew Avenue for a new commercial development. The market rental rate for a CA-1 use would not generate a "positive return" given the "cost of construction." Notes of Testimony (N.T.), 5/5/2021, at 18; R.R. 91a. Thomas acknowledged the existence of commercial uses in the neighborhood but pointed out that these were all uses that had existed for many years and did not require ground-up construction. In any case, he did not know if "those places [were] making money." N.T., 5/5/2021, at 30; R.R. 103a. Thomas discussed the report of Brickhouse, an environmental firm, that estimated that the Property's environmental remediation would cost $175,000. Another firm estimated the cost at $250,000. Notably, the permitted CA-1 uses, such as a restaurant, doctor's office, and "7-Eleven-type uses have much more traffic and much more of an impact" on the neighborhood than would Developer's proposed project. N.T., 5/5/2021, at 11; R.R. 84a.
Thomas investigated commercial opportunities but determined that the market was either "saturated" by appropriate CA-1 uses, such as an urgent care center, or required a "more vibrant commercial corridor." N.T., 5/5/2021, at 14; R.R. 87a. His pro-formas produced a negative return using rents between $12 and $20 per square foot for 4,500-square-foot and 95,000-square-foot buildings of different heights. N.T., 5/5/2021, at 15; R.R. 88a.
David Plante testified. He pointed out that a parking lot in the front of a commercial building on Chew Avenue would generate 20 times more traffic than would a 33-unit apartment building. He pointed out that the proposed building would include a green roof, which would improve the neighborhood because presently the Property has no storm water management system. Further, were the Property to be developed for CA-1 use, a stormwater management system would not be required.
In addition to the letters of support for the proposed project, Developer produced a copy of the Philadelphia Planning Commission's 2035 Plan. That Plan proposed a revision to the zoning of Chew Avenue where the Property is located to authorize a multi-family residential use by right.
In opposition to the variance, Kevin Smith, Stephanie Reid, Lavern Foxan, and Bonnie Zuckerman, identified as "Near Neighbors," testified. They were joined in this opposition by the East Mount Airy Neighbors and the Pleasant Advisory Council. City Council Member Cindy Bass also testified in opposition to the project.
Bonnie Zuckerman, who resides five or six homes away from the Property, attempted to testify about the environmental conditions of the Property, which she did not believe to be as severe as reported by Brickhouse. However, her testimony was disallowed because she was not qualified as an expert in the field of environmental science or remediation.
Robert Dixon, who lives across the street from the tennis courts that are a part of the Pleasant Park playground, testified. He described the playground as having a community building, a little league baseball field, and a swimming pool, which is used for day camps. Noting that Developer's proposed four-story building would be placed next to the pool, Dixon expressed concern that the building would block the sun and interfere with the privacy of swimmers, who could be seen from the proposed building's windows. Dixon acknowledged that the shadow study done by Near Neighbors demonstrated that during the summer months, the building would not cast a shadow on the pool.
Kevin Smith, who lives on Vernon Street next to the Property, testified. He explained that the existing building is approximately 30 feet from his rear property line, but the proposed building will have no setback. Smith expressed concern that the proposed building would tower over his house, invade his privacy, and obstruct light onto his property. Smith acknowledged that by right a building on the Property can be constructed up to his property line.
Council Member Bass testified in her capacity as a member of City Council; as a resident who uses the recreation center and pool in Pleasant Park; and as a member of East Mount Airy Neighbors. She expressed concern that Developer's plan will burden the densely populated neighborhood; cause parking congestion for residents; and invade the privacy of children and families using the public pool, which will be immediately behind and below the proposed four-story building. In her discussions with community members, as many as 200 residents voiced opposition to the plan but fewer than 5 supported it. She noted that the members of the community wished to have the Property turned into a "green space and community land . . . a place where people can sit, meditate." N.T., 6/30/2021, at 58-59; R.R. 176a-77a.
In rebuttal, Developer presented the testimony of Jon Buzan, an environmental engineer and president of Comstock Environmental, which specializes in environmental remediation, including oil tank removal and remediation. Buzan was qualified as an expert witness. He explained that the two separate environmental reports prepared on the Property found closed underground storage tanks on the site; petroleum odors in the soil around the tanks; and petroleum compounds in the groundwater. The soil borings revealed the presence of petroleum compounds in excess of state standards.
Based on these findings, Buzan calculated a budget for the cleanup of the site. He agreed with the cost projections in the Brickhouse report but found them inadequate because they did not address the 600 to 700 cubic yards of contaminated soil that is polluting the groundwater. In addition, Buzan believed a soil study would reveal a vapor intrusion issue. Buzan added $100,000 to $110,000 to the Brickhouse estimate to address the removal of contaminated soil. In sum, he projected $206,000 for the removal of the storage tanks, hydraulic lifts, and soil remediation; $76,000 for groundwater monitoring; and $100,000 for the soil removal. He estimated the total cost at $382,000. Buzan explained that the contamination had to be addressed, regardless of whether the Property is developed with a commercial or residential use.
The Philadelphia Planning Commission recommended to the Zoning Board that it grant the requested variance. See Zoning Code, §14-303(8)(c) (requiring Planning Commission to review each application for a variance and "make a recommendation to the Zoning Board . . . "). The Commission noted that the City's 2035 Plan calls for revising the zoning district at this location to allow multi-family residential use. The use and height of Developer's proposed building was consistent with the City's 2035 Plan.
The Zoning Board voted to grant Developer a use variance. It concluded that Developer met its burden of showing an unnecessary hardship.
A CA-1 use cannot occupy more than 60% of the area of the parcel. Developer's project will occupy 63%, which, Developer's counsel argued, is a de minimis change from the requirements for a CA-1 use. Zoning Board Decision, Finding of Fact ¶11. Developer will provide 21 parking spaces, but a CA-1 use would require 97 spaces to accommodate an auto-oriented commercial use, which had no relevance to Developer's proposal. Zoning Board Decision, Finding of Fact ¶13. A RM-1 (multiple family) use may occupy up to 80% of the land area and does not have to provide any parking. Developer's project meets and exceeds the dimensional requirements of an RM-1 use. N.T., 5/5/2021, at 8; R.R. 81a. The trial court treated the Zoning Board's grant of the use variance as including a variance from the dimensional requirements for a CA-1 use. Objectors do not challenge the Zoning Board's grant of the dimensional variances to Developer.
Noting that the Planning Commission has recommended that the Property be rezoned as a multiple-family (RM-1) district, the Zoning Board concluded that the project would be in harmony with the character of the neighborhood, which presently has a mix of uses and zoning districts. Finally, the Zoning Board held that the variances constituted the minimum needed to afford relief.
Those districts include RSA-5 residential, RM-2 multi-family, RM-1, and CMX-2 mixed-use multi-family. Zoning Board Decision, Finding of Fact ¶6.
On July 30, 2021, Council Member Bass filed a timely appeal. East Mount Airy Neighbors and the Pleasant Advisory Council then filed their appeal, along with a praecipe to intervene in the Bass Appeal. The two appeals were consolidated by the trial court's order of September 23, 2021.
The parties submitted briefs, and the trial court heard oral argument. On July 7, 2022, the trial court issued an order affirming the decision of the Zoning Board. In its Pa.R.A.P. 1925(a) opinion, the trial court explained that viewing evidence in a light most favorable to Developer as the prevailing party, it concluded that the Zoning Board's factual findings were supported by substantial evidence; that no abuse of discretion or erroneous application of law had occurred; and that the decision was reached on the basis of a proper exercise of the Zoning Board's authority and expertise, to which deference was owed. Trial Court 1925(a) Op. at 9. Specifically, Developer demonstrated the existence of an unnecessary hardship associated with both the physical condition of the Property and the lack of a market for a CA-1 use at that location. The Zoning Board had properly evaluated Developer's application by considering the evolving nature of the neighborhood.
The July 7, 2022, Order and Opinion vacated a prior Order and Opinion dated July 1, 2022, which contained scrivener errors. Both orders affirmed the decision of the Zoning Board.
The trial court found that the opposition of Objectors stemmed from their "natural disappointment that the Property had not been decontaminated and converted to park or green space that would lie adjacent to the present community playground, buildings, and open-air summer swimming pool," but this understandable desire did not provide a legitimate basis to reverse the Zoning Board. Trial Court 1925(a) Op. at 9-10. More problematic was the failure of Objectors to offer cogent rebuttal evidence.
The trial court stated that Objectors' case relied solely on speculative apprehensions. It concluded that there was a dearth of objective evidence or expert testimony to support any of Objectors' positions.
The East Mount Airy Neighbors and the Pleasant Advisory Council appealed the trial court's order to this Court, and, thereafter, Council Member Bass appealed.
Where the trial court takes no additional evidence, we determine whether the zoning board committed an error of law or made findings of fact which are not supported by substantial evidence. Pequea Township v. Zoning Hearing Board of Pequea Township, 180 A.3d 500, 504 (Pa. Cmwlth. 2018). Substantial evidence is defined as relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Id. If the record contains substantial evidence, this Court is bound by the zoning board's findings that result from the resolution of credibility and conflicting testimony. Pohlig Builders, LLC v. Zoning Hearing Board of Schuylkill Township, 25 A.3d 1260, 1266 (Pa. Cmwlth. 2011).
Appeal
In their separate briefs, Objectors raise nearly the same issues, which we have reordered and combined for consistency. First, Objectors argue that the Zoning Board erred and abused its discretion in holding that the denial of a variance would result in an unnecessary hardship. Second, Objectors argue that the Zoning Board erred and abused its discretion in holding that the variance was the minimum necessary to afford relief from the Zoning Code's use regulation. Third, Objectors argue that the Zoning Board erred and abused its discretion in holding that the variance would not unduly burden the transportation, water, sewer, and park facilities in the neighborhood. We address these issues seriatim.
Analysis
We begin with the applicable legislation. Section 14-303(8)(e)(.1), "Zoning Variances," of the Zoning Code states, in relevant part, as follows:
The Zoning Board shall, in writing, set forth each required finding for each variance that is granted, set forth each finding that is not satisfied for each variance that is denied, and to the extent that a specific finding is not relevant to the decision, shall so state . . . . Each finding shall be supported by substantial evidence . . . . The Zoning Board shall grant a variance only if it finds each of the following criteria are satisfied:
(.a) The denial of the variance would result in an unnecessary hardship. The applicant shall demonstrate that the unnecessary hardship was not created by the applicant and that the criteria set forth in §14-303(8)(e)(2) (Use Variances) below, in the case of use variances, or the criteria set forth in §14-303(8)(e)(3) (Dimensional Variances) below, in the case of dimensional variances, have been satisfied;
(.b) The variance, whether use or dimensional, if authorized will represent the minimum variance that will afford relief and will represent the least modification possible of the use or dimensional regulation in issue;
(.c) The grant of the variance will be in harmony with the purpose and spirit of this Zoning Code;
(.d) The grant of the variance will not substantially increase congestion in the public streets, increase the danger of fire, or otherwise
endanger the public health, safety, or general welfare;
(.e) The variance will not substantially or permanently injure the appropriate use of adjacent conforming property or impair an adequate supply of light and air to adjacent property;
(.f) The grant of the variance will not adversely affect transportation or unduly burden water, sewer, school, park, or other public facilities;
(.g) The grant of the variance will not adversely and substantially affect the implementation of any adopted plan for the area where the property is located; and
(.h) The grant of the variance will not create any significant environmental damage, pollution, erosion, or siltation, and will not significantly increase the danger of flooding either during or after construction, and the applicant will take measures to minimize environmental damage during any construction.Zoning Code §14-303(8)(e)(.1) (emphasis added). In short, the grant or denial of a variance requires factual findings on the above-listed eight separate criteria, and to the extent "a specific finding is not relevant to the decision, [the Zoning Board] shall so state." Id.
Related thereto, the Zoning Code provides direction on the factual findings that must be made in relation to unnecessary hardship:
(.2) Use Variances.
To find an unnecessary hardship in the case of a use variance, the Zoning Board must make all of the following findings:
(.a) That there are unique physical circumstances or conditions (such as irregularity, narrowness, or shallowness of lot
size or shape, or exceptional topographical or other physical conditions) peculiar to the property, and that the unnecessary hardship is due to such conditions and not to circumstances or conditions generally created by the provisions of this Zoning Code in the area or zoning district where the property is located;
(.b) That because of those physical circumstances or conditions, there is no possibility that the property can be used in strict conformity with the provisions of this Zoning Code and that the authorization of a variance is therefore necessary to enable the viable economic use of the property;
(.c) That the use variance, if authorized, will not alter the essential character of the neighborhood or district in which the property is located, nor substantially or permanently impair the appropriate use or development of adjacent property, nor be detrimental to the public welfare; and
(.d) That the hardship cannot be cured by the grant of a dimensional variance.Zoning Code §14-303(8)(e)(.2) (emphasis added).
In Metal Green, Inc. v. City of Philadelphia, 266 A.3d 495 (Pa. 2021), our Supreme Court construed these provisions of the Zoning Code as follows:
[T]he Philadelphia Zoning Code, by its plain and unambiguous terms, contains a requirement that the variance be the "minimum variance that will afford relief and will represent the least modification possible of the use or dimensional regulation in issue." Philadelphia Zoning Code §14-303(8)(e)(.1)(.b). Thus . . . we initially make clear that a minimum variance inquiry is not limited to dimensional variances. It applies equally to use variances.Id. at 508 (emphasis added). In short, the minimum variance inquiry applies with equal force to a use and dimensional variance.
Also relevant to the scope and meaning of the Zoning Code's variance provisions is Marshall v. City of Philadelphia, 97 A.3d 323 (Pa. 2014). In Marshall, the Supreme Court took this Court to task for overruling the Zoning Board's grant of a use variance and not deferring to its judgment. The Supreme Court cautioned that the applicant for a use variance does not have to show that the property is "practically valueless as zoned" or that the property "cannot be used for any permitted purpose." Id. at 330. To be sure, showing that property is "practically valueless as zoned" will demonstrate hardship, but such a showing is "not the only factor nor the conclusive factor in resolving a variance request." Id. (quotations omitted). The Supreme Court further directed that "economic factors are relevant, albeit not determinative, in a variance assessment." Id. The financial burden must be considered notwithstanding the principle that a landowner is not entitled to the most lucrative use of his property. The Supreme Court concluded as follows:
We recognize and affirm our holding in O'Neill [v. Philadelphia Zoning Board of Adjustment], 120 A.2d [901,] 904 [(Pa. 1956)], that a zoning board's discretion is "not so circumscribed as to require a property owner to reconstruct a building to a conforming use regardless of the financial burden that would be incident thereto[, e]specially . . . where the change sought is from one nonconforming use to another more desirable nonconforming use that will not adversely affect but better the neighborhood."Marshall, 97 A.3d at 333 (emphasis added). In sum, financial burden is part of the analysis in any review of a variance application and "especially" where the variance sought is to a "more desirable" use that will "better the neighborhood." Id.
With these principles in mind, we turn to Objectors' issues on appeal.
I. Unnecessary Hardship
In their first issue, Objectors argue that the Zoning Board erred and abused its discretion in holding that Developer's evidence established an unnecessary hardship. They argue that the Property's need for environmental remediation is irrelevant because that was factored into the purchase price of the Property and, in any case, economic hardship cannot justify a variance. They argue that Developer failed to establish that not one of the myriad uses allowed in the CA-1 District was economically feasible, which was its burden.
Developer responds that its evidence, which was credited by the Zoning Board, showed that a CA-1 development of the Property is not viable given the blighted condition of the Property; the prohibitive cost of the necessary environmental remediation; and the lack of an active commercial market on Chew Avenue. Objectors offered no rebuttal evidence on these points. Developer contends that Objectors would have this Court invade the fact-finding responsibility of the Zoning Board and substitute its judgment for that of the Zoning Board.
In the context of a use variance, unnecessary hardship is "established by evidence that: (1) the physical features of the property are such that it cannot be used for a permitted purpose; or (2) that the property can be conformed for a permitted use only at a prohibitive expense; or (3) that the property has no value for any purpose permitted by the zoning ordinance." Hertzberg v. Zoning Board of Adjustment of City of Pittsburgh, 721 A.2d 43, 47 (Pa. 1998). The applicant need not show that his or her land is valueless without a variance, but "economic hardship will not of itself justify a grant of a variance." Wilson v. Plumstead Township Zoning Hearing Board, 936 A.2d 1061, 1069 (Pa. 2007) (citation omitted); Marshall, 97 A.3d at 330. Objectors contend that Developer's testimony established only an economic hardship.
Developer's witness, Thomas, opined that it was not feasible to develop the Property with a CA-1 use. He explained that Chew Avenue "is more of a secondary market for commercial and retail with the surrounding residential development," and the COVID-19 pandemic has caused even primary markets, such as that existing on Germantown Avenue, to experience increased vacancies and decreased rents. N.T., 5/5/2021, at 16-18; R.R. 89a-91a. Objectors assert that the trial court erred in holding that this testimony constituted substantive evidence, explaining that Thomas did not support his opinion with an in-depth study of the profitability of existing businesses on Chew Avenue. Specifically, "Developer presented no data or analysis as to why [a medical office] would not generate revenue. Also notably missing was any analysis of the myriad of possible uses under the present zoning classification." Bass Brief at 19. Objectors further note that the Property is located in a "densely populated residential neighborhood, making the opportunities to provide food, goods, and services nearly limitless." Id. at 20.
This Court's holding in Liberties Lofts LLC v. Zoning Board of Adjustment, 182 A.3d 513 (Pa. Cmwlth. 2018), is instructive on Objectors' argument. In that case, we considered the Zoning Board's grant of a use variance to allow the construction of a 26-unit, 5-story apartment building with one commercial space in the Industrial Commercial Mixed-Use Zoning District in Philadelphia. The property was vacant, blighted, surrounded by other multi-family residences, and located in an area where a retail market was not presently viable. In support of a variance, the applicant presented the testimony of a commercial realtor on the lack of an active market for a permitted commercial/industrial use. We affirmed the grant of a variance.
In doing so, we rejected the objector's claim that the applicant was required to show that it had tried to sell or rent the property before a variance could be granted. We explained as follows:
[W]e have never required a property owner seeking a variance to present direct evidence as to the value of the property as zoned. In addition, although evidence of a property owner's inability to sell may be probative, we have concluded that it is unreasonable to force a property owner to try to sell his property as a prerequisite to receiving a variance.Id. at 531. Rather, the testimony of a realtor was sufficient to establish the fact that the property could not be put to a permitted use. We further explained that the Zoning Board was "the sole judge of the credibility and weight of the evidence presented." Id. at 529. Likewise, "[i]t is the function of the [Zoning Board] to determine whether the evidence satisfies the criteria for granting a variance." Id. at 331 (quoting Marshall, 97 A.3d at 331).
Objectors have offered no authority for their argument that Developer's real estate expert had to conduct an in-depth financial study of existing commercial businesses in the area. Essentially, Objectors ask this Court to do the job of the Zoning Board with respect to the credibility and weight to assign Thomas's testimony. Objectors did not offer any evidence that a CA-1 type commercial use of the Property, which requires new construction, is viable. Further, it was not necessary for Developer to present evidence on each possible commercial use allowed in the CA-1 District. Our Supreme Court has "explicitly rejected the requirement that an applicant for a variance for a legally non-conforming property eliminate every possible permitted use." Marshall, 97 A.3d at 332.
Chosen 300 Ministries, Inc. v. City of Philadelphia Zoning Board of Adjustment (Pa. Cmwlth., No. 67 C.D. 2015, filed January 19, 2016) (unreported),is also instructive. In that case, the applicant sought a variance to build five residential houses on a vacant lot that was irregularly shaped and, though zoned industrial, was located in an evolving neighborhood. In affirming the Zoning Board's grant of a variance, we held that the applicant did not have to present evidence that there were no viable uses consistent with the light industrial zoning district. Rather, the evidence on the physical condition of the lot and the transition of the neighborhood to residential was sufficient to show unnecessary hardship.
An unreported panel decision of this Court, "issued after January 15, 2008," may be cited "for its persuasive value[.]" Section 414(a) of the Commonwealth Court's Internal Operating Procedures, 210 Pa. Code §69.414(a).
Here, the Zoning Board found that there were physical circumstances and conditions unique to the Property that created the unnecessary hardship. The Property is vacant, save for an abandoned and derelict building, and it is located in a neighborhood transitioning to a residential use. The Zoning Board also found that the need for costly environmental remediation, which was not a self-imposed hardship, was an important consideration in the assessment of unnecessary hardship. Marshall, 97 A.3d at 333.
Objectors contend, however, that the Zoning Board erred in considering the cost of remediation as part of the hardship analysis because that fact had been already factored into the purchase price of the Property. They also argue that because the contamination standards differ for residences than for non-residences, the higher cost of remediation needed for a residential use constitutes a self-imposed hardship. East Mount Airy Neighbors Brief at 34.
We reject this argument. First, the blight and environmental degradation of the Property constitute "unique physical circumstances or conditions" that are "peculiar to the property." Zoning Code §14-303(8)(e)(.2). Second, the "prohibitive" cost of environmental remediation must be factored into the consideration of the variance, whether commercial or residential. Hertzberg, 721 A.2d at 47; Marshall, 97 A.3d at 333. Developer's evidence in this regard was unrebutted. Essentially, that evidence showed that the Property is practically valueless without a variance, which exceeds the threshold for unnecessary hardship. The Zoning Board concluded that there "is no viable market for new commercial development on the Property." Zoning Board Decision, Conclusion of Law ¶14.
The Zoning Board's findings are supported by the credited testimony of Developer's witnesses, Thomas and Buzan. We discern no merit to Objectors' claim that the Zoning Board abused its discretion in its findings of fact and ultimate conclusion that the evidence established an unnecessary hardship.
II. Minimum Variance to Afford Relief
In their second issue, Objectors contend that the Zoning Board erred and abused its discretion in concluding that the variances requested by Developer represent the minimum necessary to afford relief and the least modification possible of the use regulation. Zoning Board Decision, Conclusion of Law ¶22. Objectors argue the Zoning Board offered no explanation of this conclusion. Objectors further argue that to satisfy the minimum variance requirement, the Zoning Board had to find that 33 units was the minimum number of units necessary for Developer's project to generate a positive return, but it made no such finding.
Developer responds that the Zoning Board found that Developer changed the location of the entrance to the parking garage and reduced the number of residential units from 37 to 33, to reduce the project's impact. Zoning Board Decision, Finding of Fact, ¶65. Developer's project meets, and exceeds, the dimensional regulations applicable to an RM-1 use. Id. at Findings of Fact, ¶¶11-14. The Zoning Board also found that the permitted CA-1 uses would have a greater impact on traffic, parking, and stormwater runoff than will Developer's residential project. Further, Developer's proposal will be similar to the uses in the surrounding neighborhood, which includes multi-family residences. Developer contends that these facts support the Zoning Board's conclusion that its proposal represents the minimum variance necessary to afford relief.
A CA-1 use is not required to reduce stormwater runoff, but a residential use is required to do so. Because Developer will reduce stormwater runoff, it argues that this demonstrates that its proposed use will be less intensive than a permitted CA-1 use.
This Court has observed that the minimum variance criterion is more difficult to apply to a use variance than to a dimensional variance. Paganico v. Zoning Hearing Board of Municipality of Penn Hills, 227 A.3d 949, 954 (Pa. Cmwlth. 2020). This is because a use variance "marks a qualitative rather than quantitative departure from an existing ordinance[.]" Id. at 955. In Paganico, the zoning board found that the applicant satisfied the minimum variance criterion for a use variance to develop a home for veterans because the proposed use was less intensive than the permitted uses and had a minimal impact on neighboring properties, which already included a group home. Id. Stated otherwise, credited evidence that the proposed use is less intensive and will have "less of an impact than some [permitted] uses" satisfies the minimum variance criterion. Id.
Here, the record contains evidence relevant to the Paganico paradigm. Developer's project will have less impact than the permitted CA-1 use, with respect to the traffic to be generated, the number of parking spaces, and management of stormwater runoff. R.R. 65a. Likewise, because the neighborhood already has multi-family residences, it will have minimal impact on the neighborhood. Paganico, 227 A.3d at 955. This Court has also explained:
[O]nce it is established that use of the property in strict conformance with the governing ordinance is unachievable, the minimum-necessary variance requirement can be satisfied "by showing that of all the viable alternatives, the proposed use is the least departure from the terms of the ordinance, or the most similar to the uses in the surrounding neighborhood."In re Garcia, 276 A.3d 340, 354 (Pa. Cmwlth. 2022) (quoting In re Ridge Park Civic Association, 240 A.3d 1029, 1034 (Pa. Cmwlth. 2020) (Ridge Park Civic Association)) (emphasis added).
Objectors contend, however, that in order to satisfy the minimum variance criterion in the Zoning Code, Developer had to demonstrate that the 33 residential units proposed is the minimum number needed to generate a reasonable profit. Objectors contend that no less is required under Ridge Park Civic Association.
The property in Ridge Park Civic Association consisted of two parcels in Philadelphia that were zoned for a single-family residential use with a limit of one structure per lot. The developer proposed to consolidate two parcels and construct three buildings, each with three townhouses. Based on the developer's evidence that geotechnical issues with the lots made strict compliance with the Zoning Code impossible, the Zoning Board granted both use and dimensional variances for the nine townhouses. The trial court affirmed, noting, inter alia, that the minimum variance criterion did not apply to the use variance but only to the dimensional variances needed for the project.
The dimensional variances in Ridge Park Civic Association related to the curb cuts, setback, and driveway requirements established for a single-family, one structure per lot zoning district. The increase in number of structures sought in the use variance required more curb cuts and driveways, and a reduction in the setbacks. Both the use and dimensional variances resulted in a more intensive use of the land.
On appeal, this Court agreed with the Zoning Board's holding that the property could not be viably developed in accordance with the strict terms of the Zoning Code and, thus, the developer demonstrated unnecessary hardship. Ridge Park Civic Association, 240 A.3d at 1037. On the other hand, we concluded the trial court had erred in holding that the minimum variance criterion did not apply to a use variance and ordered a remand for more fact finding. Nevertheless, given the geotechnical issues associated with the lots, we observed that it "[did] not seem unlikely" that the developer could make the demonstration that nine units was the minimum number to afford relief from the requirement of a single structure per lot. Id.
Objectors argue that Ridge Park Civic Association has established the principle that any variance for a multi-family residential use requires the applicant to show that the number of units proposed is the lowest number needed to generate a profit. Accordingly, here, Developer was required to prove that 33 units was the minimum number needed to generate a positive return. We disagree.
In Ridge Park Civic Association, this Court stated that in light of the "quantitative departure" from the use regulation in question, the Zoning Board's "inquiry required resolution of the factual issues of a reasonable profit and the minimum number of units necessary for it to be economically feasible to proceed." Ridge Park Civic Association, 240 A.3d at 1035. Notably, the record before the Zoning Board contained extensive and detailed financial information on the cost of the construction, which required supporting piers because of the contours of the land. Nevertheless, the Court's remand was for "appropriate findings as to the quantitative aspects of the minimum variances necessary for this to be a viable project." Id. at 1038. This included both the use and dimensional variances. Here, by contrast, there is no "quantitative departure" from the use regulation for the CA-1 zoning district. There is no limit, for example, on the number of offices that could be put into a medical office building.
Ridge Park Civic Association is distinguishable. First, the applicable use regulation contained a specific quantitative requirement because it limited the use to one single-family structure per lot. The variance for nine townhouses on two lots necessitated a "quantitative" departure from this use regulation, and it was this "quantitative" departure that informed the Court's analysis. Second, the use variance sought in Ridge Park Civic Association was for a more intensive use, i.e., multi-family, than the permitted use, i.e., single family. Here, the requested variance seeks a less intensive use than the permitted CA-1 commercial use. Nor have Objectors identified a quantitative feature to the relevant CA-1 use regulation. The Zoning Code does not limit the number of offices, or units, that can be placed in a by-right commercial building in the CA-1 district.
The only aspect of the instant matter that involves a quantitative-type regulation is that governing the size of the project's footprint on the Property, which is a purely dimensional requirement. The CA-1 District limits the structure to 60% of the lot, and Developer's project will occupy 63.3% of the land. Objectors have not challenged the Zoning Board's grant of a dimensional variance from the CA-1 requirements.
In any case, Ridge Park Civic Association did not establish the rigid principle, as suggested by Objectors, that every variance for a multi-family residential use, regardless of the use or dimensional regulation in the zoning ordinance, must demonstrate that the proposed number of units is the minimum necessary to generate a reasonable profit. Zoning boards evaluate land uses. They have not been constituted to regulate the financial returns of real estate developers. Notably, Metal Green, 266 A.3d 495, which was decided subsequent to Ridge Park Civic Association, did not require the applicant for a variance to establish a financial justification for the specific number of residential units for which a variance was requested. Rather, the Supreme Court directed a remand so that the Zoning Board could explain its belief that the proposed reuse of an industrial building into 18 residential units constituted an "overuse" of the property. Id. at 517.
Nevertheless, we agree with Objectors that the Zoning Board's determination did not explain its conclusion that the use variance granted represents the minimum variance that will afford relief from the hardship presented by the Property's zoning designation. This omission stands in stark contrast to the Zoning Board's full explanation of its determination on unnecessary hardship.
We return to Metal Green, 266 A.3d 495. In that case, the Zoning Board denied a variance for a multi-family residential use, inter alia, because the applicant did not satisfy the minimum variance requirement. This Court affirmed, reasoning that the Zoning Board, apparently, did not credit the evidence offered by the developer to show that the proposal satisfied the minimum variance criterion. The Supreme Court reversed this Court. It explained as follows:
This Court also suggested that in order to obtain a use variance to repurpose an industrial building into 18 residential units, there needed to be a finding on the minimum number of units needed for a viable use of the property in question, whether 16, 17, or some other number. See Metal Green, 266 A.3d at 516. However, this suggestion was not incorporated into the Supreme Court's remand order, which focused, instead, on whether the proposal would "overuse" the property, a more general directive.
Here, the Zoning Board neglected to make explicit credibility determinations, failed to weigh the evidence of record, and did not set forth its reasoning as to why it believed Metal Green did not meet its burden. These failures are especially notable in light of the largely uncontradicted expert testimony offered by Metal Green that seemingly spoke to the minimum variance requirement. In light of what we view as an insufficient determination below, precluding review of the minimum variance requirement issue on appeal, we reverse the Commonwealth Court's decision in relevant part.Metal Green, 266 A.3d at 517 (emphasis added).
Here, we face the same problem as in Metal Green, albeit in the context of the grant of a variance by the Zoning Board as opposed to its denial. The Zoning Board's "insufficient determination" precludes our "review of the minimum variance requirement issue on appeal." Metal Green, 266 A.3d at 517.
For these reasons, a remand must be ordered so that the Zoning Board can explain its conclusion that Developer's project satisfies the minimum variance criterion in the Zoning Code, considering all relevant factors.
III. Adverse Consequences on Neighborhood
In their third issue, Objectors strongly object to the trial court's dismissal of their assertions of harm as "disappointment." Trial Court 1925(a) Op. at 9. They contend that the needs of the neighborhood have been legislated as requiring the Property to be put to a CA-1 commercial use. They contend that the Zoning Board acted ultra vires because it placed the evidentiary burden on Objectors and then rezoned the Property.
Objectors note that residents, Council Member Bass, and the executive director of East Mount Airy Neighbors expressed concerns about crowding, traffic, schools, the need for quiet semi-private space in their community, and the overall density of the population. N.T., 6/30/2021, at 3-19, 36-51, 57-60; R.R. 121a-37a, 154a-69a, 175a-78a. Instead of addressing those concerns, the Zoning Board concluded that "the use variance, if granted, will not alter the essential character of the neighborhood . . . nor substantially or permanently impair the appropriate use or development of adjacent property, nor be detrimental to the public welfare[.]" Zoning Board Decision, Conclusion of Law ¶4(c). Objectors rejoin that their concerns should not have been so readily dismissed by those who have no connection to the community. As a consequence, the Zoning Board has acted ultra vires by effectively legislating a new zoning classification for the Property from CA-1 to RM-1, which is improper under South Broad Street Neighborhood Association v. Zoning Board of Adjustment, 208 A.3d 539 (Pa. Cmwlth. 2019).
In South Broad Street, the Zoning Board granted a variance to permit the expansion of a non-conforming three-unit apartment in the City of Philadelphia to five dwelling units. At the hearing, the owner testified that the block consisted mainly of commercial and multi-family properties and that the proposal would be permitted by right under the most restrictive RM-1 zoning designation in the Zoning Code. The Planning Commission testified that the City's comprehensive plan recommended rezoning of the area to RM-1. This Court affirmed the trial court, which had reversed the grant of a variance. We explained that the Zoning Board's findings on the "entire district" were not sufficient to support a conclusion of unnecessary hardship for a particular property. Id. at 550. Likewise, the Planning Commission's proposed rezoning did not support a finding of unnecessary hardship for a single property. South Broad Street is inapposite.
Here, the Zoning Board did not base its finding of unnecessary hardship upon the entire district or the Planning Commission's support or its intention to revise the zoning on Chew Avenue. Rather, the Zoning Board based the finding of unnecessary hardship upon the lack of a commercial market for a CA-1 use of the Property along with the prohibitive cost of remediating a blighted and environmentally damaged parcel.
The Zoning Board did not credit the testimony from the residents about the alleged adverse impact on the community. Under Nettleton v. Zoning Board of Adjustment of City of Pittsburgh, 828 A.2d 1033, 1041 n.10 (Pa. 2003), a zoning board may accept or reject the testimony of any witness, in part or in toto, and may even reject uncontradicted testimony. On the other hand, the Zoning Board credited Developer's evidence that its project would abate the present environmental hazards on the Property, improve stormwater runoff, and be consistent with the character of the neighborhood. As such, the public health and welfare will be served, not adversely impacted, by the grant of the variance.
Simply, Objectors' evidence did not provide a basis for the Zoning Board to conclude other than it did, i.e., that the variance "will not alter the essential character of the neighborhood . . . impair the appropriate use or development of adjacent property, [and not] be detrimental to the public welfare[.]" Zoning Board Decision, Conclusion of Law ¶4(c). We reject Objectors' argument to the contrary.
Conclusion
We affirm the Zoning Board's holding that the evidence demonstrated that the denial of a variance would result in an unnecessary hardship and that the variance will not adversely impact the public health and welfare, but we vacate its holding that Developer's proposed multi-family residential use represents the minimum variance needed to afford relief. Upon remand, the Zoning Board must explain its conclusion in this regard and, if it deems it appropriate, take additional evidence.
Judge Dumas did not participate in the decision in this case.
ORDER
AND NOW, this 19th day of July, 2024, we affirm the Court of Common Pleas of Philadelphia County's (trial court) order of July 7, 2022, upholding the Philadelphia Zoning Board of Adjustment's grant of a use variance on grounds that a denial of a variance would result in an unnecessary hardship and that a variance would not adversely affect transportation or unduly burden water, sewer, park, or other public facilities. We vacate that part of the trial court's order upholding the Zoning Board of Adjustment's decision that the variance for a multi-family residential use is the minimum necessary to afford relief. We remand the matter to the trial court for further remand to the Zoning Board of Adjustment to explain its conclusion in this regard and, if it deems it appropriate, to take additional evidence of whether the use variance represents the "least modification possible of the use . . . regulation at issue." Philadelphia County, Pennsylvania, Zoning Code §14-303(8)(e)(.1)(.b) (2012).
Jurisdiction relinquished.