Opinion
No. 870 C.D. 2013
02-21-2014
Hamilton Township, Appellant v. Zoning Hearing Board of Hamilton Township, and Pacona Corporation D/B/A Gluco Lodge
BEFORE: HONORABLE ROBERT SIMPSON, Judge HONORABLE ANNE E. COVEY, Judge HONORABLE JAMES GARDNER COLINS, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY SENIOR JUDGE COLINS
Appellant Hamilton Township (Township) appeals from the opinion and order of the Monroe County Court of Common Pleas (trial court) that affirmed the Zoning Hearing Board of Hamilton Township's (ZHB) grant of the application of Pacona Corporation, d/b/a Gluco Lodge (Gluco) for an expansion of a non-conforming use. We affirm.
Gluco operates a 32-room personal care facility on a 9.3-acre lot in a rural area of Hamilton Township on Kemmertown Road, in Cherry Valley. The property is located in Zoning District A, which makes the personal care facility a non-conforming use in that District. The existing structure is in the shape of a "T" with the horizontal part of the "T" fronting on Kemmertown Road and the stem of the "T" pointing toward the Cherry Creek tributary. At present, the horizontal part of the "T" and part of the stem of the "T" are a two-storied structure - the addition at issue here would be cantilevered over the existing first floor of the remaining part of the stem of the "T" and make the entire structure a two-story structure. At present, the 32 available rooms are a mix of semi-private and private rooms, with an occupancy of between 40 and 42 residents. Ten rooms, each with a private bath, are proposed, to bring the number of residents up to the maximum licensed capacity of 51 residents. Gluco is bordered by farmland to the West, a vacant field owned by Gluco's principals to the South, a field with two buildings to the North, and the principals' residence sits on property to the East of the facility. (October 2, 2012 Decision of the ZHB (ZHB Decision), Reproduced Record (R.R.) Item 1A, at 1a, 5a.)
In 1996, the ZHB granted approval for a 50% expansion (5,094 square feet) of the then-existing 10,202 square-foot facility, as permitted by Section 703.1 of the Township's Zoning Ordinance, and that expansion was constructed. In October 2011, the property owners submitted an application for the instant 10-room addition (an additional 3,910 square feet of second floor space), which was denied by the Zoning Officer on the grounds that it would establish an additional expansion of the already permitted 50%. Gluco timely appealed from the denial, requesting a variance from the 50% enlargement of a non-conforming use or structure. The ZHB held hearings in January, March, April, May, and September of 2012.
At the May 2012 hearing, the ZHB expressed concern about the location of a new stair tower at the rear of the stem of the "T" part of the structure closest to the Cherry Creek tributary and within the 100 year floodplain. In response to this concern, at the September 2012 hearing, Gluco presented a revised plan relocating the stair tower to the east of the stem of the "T." (May 1, 2012 Hearing Transcript at 230, R.R. Item 2I at 343a; September 4, 2012 Hearing Transcript at 241, Applicant's Exhibit A-33, R.R. Item 2J at 368a.)
Jerry Perry, a principal of Gluco, testified that due to changing market conditions, residents prefer private rooms, and he has converted some semi-private rooms (which may previously have held three or four residents) into single, private rooms, but he needs additional private rooms to remain competitive. (ZHB Decision, Summary of Evidence, R.R. at 12a-13a.) Betsi Olmstead, part-time Marketing Director at Gluco, testified that she studied seven facilities in the area, including the preferences for unit types within those facilities; she testified that private rooms are needed to satisfy market demands, and Gluco has been forced to turn potential residents away due to lack of available private rooms. (Id.)
Jerry Perry testified that in today's market, room size is critical, with new facilities building rooms of no less than 220-250 square feet; the proposed new private rooms would be larger than the existing rooms, and would be equipped with kitchenettes, which would provide them with an option to apply for a change in their licensure to add an assisted living facility use to their existing personal care facility license. He indicated that the income generated from the current number of residents necessarily limited the services and amenities that could be provided by Gluco to its residents (such as bus transportation for doctor visits and to other events) as well as limiting the rates of pay and benefits that could be provided to staff. (April 3, 2012 Hearing Transcript (April H.T.) at 203, R.R. Item 2H at 313a.)
At the May 1, 2012 hearing, the Board expressed its concern with Ms. Olmstead's expertise to support Gluco's alleged business necessity justification for the 10-room addition. Consequently, at the September 4, 2012 hearing, Gluco called John Perry, of P.E.P.P. Unlimited, a provider of services in the assisted living and personal care industry, who was accepted as an expert in personal care, to testify. John Perry (who is unrelated to Jerry Perry), prepared a study of the facility entitled "Gluco Lodge Opinion Paper," reviewed a report prepared by Ms. Olmstead, and contacted other personal care facilities in the Monroe County area. (ZHB Decision, Summary of Evidence, R.R. at 13a-14a.) John Perry testified that individuals today prefer private rooms, and that sharing rooms leads to conflicts between residents. He stated that Gluco presently has a waiting list for the limited number of private rooms. (September 4, 2012 H.T. at 288-89, R.R. Item 2J at 416a-417a.)
In addition to setting forth the need for private living spaces, the Gluco Lodge Opinion Paper includes an analysis of Gluco's rate of pay and fringe benefits offered to staff, and compares them to nationally averaged pay rates and benefits; it states that Gluco has a high staff turnover due to its comparatively low wages and lack of benefits. It also compares Gluco's revenue data, based on existing room style and number of beds (with 20 beds in private rooms and 22 beds in semi-private rooms) to projected revenue after the proposed addition (with 31 beds in private rooms and 20 beds in semi-private rooms). It concludes with the statement:
Gluco has been proactive in keeping its expenses in line with their [sic] competitors in the area except for staffing wages and benefits. Upon review of the cost and income it became clear that there is a need to match the competition in the staffing area in order to retain the dedicated long term staff. By keeping staff it will reduce the cost of orientation and training. P.E.P.P. feels that the additional beds will give Gluco Lodge the edge it needs to be competitive in the area and continue to be an active member of the business community.
The ZHB found that the testimony was clear that Gluco is in a competitive personal care provider market, and most of Gluco's competitors can offer more private rooms than Gluco. (ZHB Decision, Findings of Fact and Conclusion of Law ¶16, R.R. at 30a.) The ZHB found that although Gluco desires to have more private rooms available, it does not intend to increase its 51-resident license capacity. (Id. ¶17.)
The ZHB found that Gluco's position is based upon the doctrine of natural expansion of a non-conforming use and the decisions of this Court in, inter alia, Domeisen v. Zoning Board of O'Hara Township, 814 A.2d 851 (Pa. Cmwlth. 2003), and Jenkintown Towing Service v. Zoning Board of Upper Moreland Township, 446 A.2d 716 (Pa. Cmwlth. 1982), and that the Township's position is based upon our Court's decision in West Central Germantown Neighbors v. Zoning Board of Adjustment of the City of Philadelphia, 827 A.2d 1283 (Pa. Cmwlth. 2003); the ZHB then distinguished West Central Germantown Neighbors, highlighting a number of facts it deemed dissimilar to the facts in the instant matter. (Id. ¶¶19-21.) The ZHB found:
[I]n West Central Germantown Neighbors, the nursing home operator proposed an enlargement of 167% to enable the nursing home operator to serve 35 more residents. The location of the proposed enlargement in West Central Germantown Neighbors was in a National Historic District within the City of Philadelphia and included demolition of an existing structure, the creation of a new 31-space parking lot the area of the demolished structure, and the construction of a new three story addition, all in a 2.15 acre lot.(Id. ¶21.) The ZHB found that Gluco had established to its satisfaction that the proposed addition and variance from the 50% limit on expansion is "justified by the nature of [Gluco's] business and is necessary for the long term sustainability of [Gluco's] personal care business." (Id. ¶23 at 32a.) The ZHB concluded that Gluco had established the criteria delineated by our Court in the Jenkintown Towing Service and Domeisen line of cases to support a variance based upon the doctrine of natural expansion of a non-conforming use. (Id. ¶27 at 33a.)
The ZHB granted the variance subject to various conditions, including the condition that Gluco must obtain all required permits and approvals, and the condition that Gluco limit the number of residents to the 51 currently licensed for care. (ZHB Decision, Order of the Board, R.R. Item 1A at 34.) --------
The Township appealed to the trial court, which took no additional evidence and affirmed the ZHB. In a well-reasoned opinion by the Honorable Arthur L. Zulick, the trial court reviewed the law in Pennsylvania dealing with variances to non-conforming uses, and found that the Township's argument that a variance should only be granted where the business would not otherwise remain financially viable is not persuasive in a case such as this, where extensive testimony supported the ZHB's findings that the proposed addition is justified by the nature of the personal care business, and is necessary for its long term survival in a highly competitive market - "[a] business that is not competitive is not viable." (Trial Court Opinion at 7.) . The trial court determined that the ZHB had correctly distinguished West Central Germantown Neighbors, noting that:
[T]here is no argument that the proposed expansion by Gluco will alter the essential character of the neighborhood, nor impair or harm the public interest, safety, or welfare. Gluco seeks to add a second story to an already existing structure, where most of the rest of the structure is presently two stories. None of Gluco's few neighbors objected to the requested variance.(Id. at 8.) The trial court further addressed the Township's other objection, that the ZHB erred by failing to mention or address the last of the factors to be considered in granting or denying a variance, i.e., that the requested variance must be the least intrusive solution. The trial court opined that while the ZHB did not explicitly state that the requested variance was the least intrusive option, its decision contains substantial evidence that such was the case and it is implicit in the ZHB's conclusions - "[t]he ZHB stated it was following the Jenkintown-Domeisen line of cases, and so by implication was following the requirements for a variance discussed therein." (Id. at 9.) The trial court reiterated the ZHB's finding that Gluco has housed approximately 41 to 42 residents since the previous expansion, and noted that this is approximately 10 fewer residents than the desired 51, which represents the facility's maximum licensed capacity. Coupled with the ZHB's finding that there was a waiting list for private rooms and vacancies in the semi-private rooms, the trial court concluded that the evidence thus supports adding 10 private rooms to bring the facility up to licensed capacity.
This appeal followed. Where, as here, the trial court does not take additional evidence, this Court's review is limited to determining whether the ZHB committed an abuse of discretion or an error of law. JoJo Oil Co. v. Dingman Township Zoning Hearing Board, 77 A.3d 679, 685 n.6 (Pa. Cmwlth. 2013); In re Brickstone Realty Co., 789 A.2d 333, 338 (Pa. Cmwlth. 2001). An abuse of discretion will be found where the ZHB's findings of fact are not supported by substantial evidence. JoJo Oil Co., 77 A.3d at 685 n.6; Brickstone Realty Co., 789 A.2d at 338.
Municipalities may limit the expansion of a non-conforming use and structure by specific percentage limitations, and where a property owner seeks to expand that use in conflict with zoning ordinance restrictions, the property owner must seek a variance. Jenkintown Towing Service, 446 A.2d at 719. To obtain relief in the nature of a variance as applied to a pre-existing non-conforming use, an applicant must establish four factors: (1) that an unnecessary hardship exists that is not created by the applicant and that is caused by unique physical circumstances of the property for which the variance is sought; (2) that a variance is needed to enable the party's reasonable use of the property; (3) that the variance will not alter the essential character of the district or neighborhood, or substantially or permanently impair the use or development of the adjacent property such that it is detrimental to the public's welfare; and (4) that the variance will afford the least intrusive solution. Larsen v. Zoning Board of Adjustment of City of Pittsburgh, 543 Pa. 415, 421, 672 A.2d 286, 289 (1996). The first and third factors are not at issue sub judice.
Before this Court, the Township argues first that there is neither substantial nor conclusive evidence that Gluco could not remain viable if it could not expand as requested. The Township highlights the fact that at the May 2012 hearing, the ZHB's solicitor indicated that Gluco's part-time Marketing Director, who had provided testimony at an earlier hearing, had not been called as an "expert," and the ZHB was not satisfied at that point in the hearings that the requested expansion was required for "business survival;" the ZHB then agreed to allow Gluco to provide additional, expert testimony at the September hearing, where the expert, John Perry, did in fact testify. (May 1, 2012 H.T. at 229-230, R.R. at 342a-343a.) The Township contends that John Perry agreed, on cross-examination, that he was not there to testify that if Gluco continues without the expansion, it will "go under." (September 4, 2012 H.T. at 301, R.R. at 428a.)
However, we reject the Township's argument that it was necessary for Gluco to demonstrate, by financial data or other evidence, that it will fail without the requested expansion. Indeed, in no case has this Court required that an applicant do so; rather, we have consistently required that an applicant demonstrate that expansion is necessary in order to remain competitive and grow, allowing a reasonable use of the property, especially where market conditions have evolved. In Domeisen, where the applicant was a family-owned retail and wholesale landscaping business, we opined that among other things, the doctrine of natural expansion protects a change in the business mix among preexisting components; we determined that the zoning hearing board there, by placing conditions upon the approval such as limits to hours of operation, had "properly balanced the rights of the business person to accommodate business needs and reasonable use of the property." Domeisen, 814 A.2d at 857. Further, we stated that the applicant's lawful, preexisting, nonconforming use created a concomitant right "to develop and to continue its business by adapting to changing market conditions, notwithstanding the technical requirements of the zoning code." Domeisen, 814 A.2d at 859 (emphasis supplied.)
In Jenkintown Towing Service, we stated that entitlement to a variance for expansion beyond a stated percentage limitation must be based upon a showing that "the proposal involves a modernization or other revision essential to the continued viability of the business as distinguished from merely 'taking advantage of the normal increase' of the business." Jenkintown Towing Service, 446 A.2d at 722 (emphasis supplied.) In our recent decision in Bernotas v. Zoning Hearing Board of the City of Bethlehem, 68 A.3d 1042 (Pa. Cmwlth. 2013), this Court upheld the grant of a variance to expand a farmer's market with the addition of several buildings to permit purchase of bulk goods, reduce store deliveries, and allow for greater operational efficiencies. We stated, "the evidence establishes that the requested variance represents a reasonable adjustment of the zoning standards necessary to allow a reasonable use of the property without affecting the public, health, safety and welfare." Bernotas, 68 A.3d at 1052. Here, there is ample record evidence to support the Board's finding that Gluco's proposed expansion was justified by the nature of its personal care business, and necessary for its long term sustainability.
The Township's other argument on appeal is that the ZHB made no findings, and there was no substantial evidence, that the addition of 10 rooms and 3,600+ square feet was the least intrusive option. However, the record is clear that the proposed expansion will simply add a second floor to the only part of the building that remains a single story, without expanding the footprint of the building, the least intrusive method of expanding the number of rooms. There will be no discernible effect on the surrounding area, as in West Central Germantown Neighbors, infra, nor were there objections from neighbors, and testimony established that there will be no increase in the sewage treatment facility or the required number of parking spaces. The Board's order granting the variance is expressly subject to the condition that Gluco limit the number of its residents to 51, the maximum number currently licensed. The Board found that Gluco established the criteria delineated by our Court in the Jenkintown Towing Service and Domeisen line of cases to support a variance, and the record sub judice supports this finding.
For the foregoing reasons, we affirm.
/s/_________
JAMES GARDNER COLINS, Senior Judge ORDER
AND NOW, this 21st day of February, 2014, the Order of the Monroe County Court of Common Pleas is AFFIRMED.
/s/_________
JAMES GARDNER COLINS, Senior Judge
(Record Exhibit A-36, Gluco Lodge Opinion Paper at 10-11, Supplemental Reproduced Record at 18b-19b.)