South Broad St. Neighborhood Assoc. v. ZB of Adjustment & City of Philadelphia ~ Appeal of: Great Real Estate, LLC

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
South Broad Street Neighborhood :
Association :
:
v. : No. 1454 C.D. 2017
: Argued: March 12, 2019
Zoning Board of Adjustment :
and City of Philadelphia :
and Great Real Estate, LLC :
:
Appeal of: Great Real Estate, LLC :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE P. KEVIN BROBSON, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION BY JUDGE BROBSON FILED: May 7, 2019
Great Real Estate, LLC (Owner) appeals1 from an order of the Court of
Common Pleas of Philadelphia County (common pleas), dated September 6, 2017.
Common pleas reversed the decision of the Zoning Board of Adjustment of the City
of Philadelphia (Board), which granted Owner’s application for a use variance. For
the reasons discussed below, we affirm common pleas’ order.
I. BACKGROUND
In 2016, Owner purchased the real property at issue in this
case, 1244 South Broad Street in the City of Philadelphia (property). The property
is located in South Philadelphia between Wharton and Federal Streets on Broad
1
The Court precluded the Board and City of Philadelphia, who are also named as appellees
in this case, from filing briefs in this matter due to their failures to conform to this Court’s order
directing them to do so.
Street. The surrounding area consists primarily of multi-family residential buildings
and commercial uses, with a few single-family residential buildings and one
large, 50-unit residential building.
The property is improved with a three-story building of
approximately 4,400 square feet and is located in Philadelphia’s RSA-5 zoning
district, within which no multi-family uses are permitted under the applicable
provisions of the Philadelphia Zoning Code (Zoning Code). On or about
July 16, 2013, the Board granted a variance to the prior owner of the property,
allowing use of the building as a three-unit multi-family dwelling, with each of the
three floors of the building as a separate dwelling unit. On March 29, 2016, shortly
before it closed on its purchase of the property, Owner applied to the Philadelphia
Department of Licenses and Inspections (L&I) for a zoning/use registration permit
to convert the building from three residential units into five. L&I denied the request,
noting that multi-family housing is not permitted in the RSA-5 zoning district.
Owner then applied to the Board for a use variance to allow conversion of the
building from three residential units into five (the proposal). The Board required
that Owner meet and confer with the South Broad Street Neighborhood Association
(Association), a registered community organization for the neighborhood in which
the property is located. Thereafter, the Board received a letter from the Association,
unanimously opposing the proposal, and scheduled a hearing on the matter.
At the hearing on November 16, 2016, Owner presented the testimony
of David McArthur (McArthur), a licensed architect who worked with Owner on the
proposal. (Reproduced Record (R.R.) at 181a.) McArthur testified that the block
surrounding the property consists mainly of commercial and multi-family properties
2
and that the proposal would be permitted by right under the most restrictive
multi-family zoning designation (RM-1) in the Zoning Code. (Id. at 182a-83a.)
Regarding the proposal specifically, McArthur testified that the
building on the property consists of three floors. The first floor is
approximately 1,500 square feet, which McArthur said was “fairly unfeasible” for
use as a one-bedroom apartment—a configuration necessitated, in McArthur’s
opinion, by the absence of windows along the side walls of the first floor.
(Id. at 183a.) Regarding the first floor, McArthur testified that it is “not really usable
as a single-family unit” and that it is vacant because it is an unfinished space with
some incomplete framing. (Id. at 186a-87a.)
McArthur also testified that the second floor is
approximately 1,400 square feet, which McArthur said is “a little larger than the
typical unit sizes in [the] area” and that the third floor is 870 square feet.
(Id. at 184a.) He added that tenants occupied the second and third floors at the time
of the hearing. (Id. at 187a.) According to McArthur, Owner altered its proposal in
response to comments from the community and ultimately decided on a proposal
that includes dividing each of the first and second floors into two separate units,
adding exterior light and ventilation access to the first floor unit, and leaving the
third floor untouched. (Id. at 184a-85a.)
Owner then presented the testimony of Al Greenberg (Greenberg), a
principal of Owner. Greenberg testified that the surrounding area consists primarily
of multi-family buildings. Owner’s counsel asked Greenberg to explain why Owner
was seeking a variance, to which Greenberg responded: “The size of the units would
be very large compared to what would make sense. So we’re looking to have it
divided to make more sense for the demographics of the area.” (Id. at 188a.) He
3
testified that the “building itself is very large” and described the second floor unit as
“very, very large.” (Id.) In response to a question about how he will find a tenant
for the vacant first-floor space, Greenberg also testified that, if Owner is granted the
requested variance, “[i]t will be much easier and make more sense for the
demographics and affordability of those types of units.” (Id. at 191a.)
Regarding the first floor specifically, Greenberg testified that the space
is unoccupied and that Owner had not yet attempted to find a tenant for that space.
(Id.) He opined that the previous owner had kept the first floor unfinished for the
previous two or three years because it “is so unreasonable to try to use it as a unit.”
(Id. at 189a.) In conclusion, Greenberg also reviewed Owner’s efforts to address
community concerns about the proposal, including by reiterating Owner’s offer to
“clean up the front of the property and the sides.” (Id. at 192a, 205a.)
The Association presented the testimony of several witnesses in
opposition to the proposal. First, Anthony Bruttaniti (Bruttaniti), the Association’s
zoning chairman, testified that, though Owner had satisfied some of the community
concerns about the proposal in earlier revisions to its plans, there remained a concern
about the added density the proposal would bring to the neighborhood. The
Association’s board, therefore, continued to oppose the proposal unanimously, as it
had prior to the hearing (and as had all members of the community in attendance at
the prior public meeting). (Id. at 193a-95a, 201a.) Bruttaniti also reviewed the
contents of a letter of opposition that the Association submitted to the Board before
the hearing. The letter indicated that, because Owner was aware of the variance
allowing three units when Owner purchased the property three years ago, Owner
cannot demonstrate a hardship that would justify a variance. (Id. at 195a.)
4
Bruttaniti also testified about problems in the neighborhood created by
absentee landlords and generally poor building maintenance. He noted partially
collapsed buildings, perpetual vacancy, and a lack of participation by tenants in the
Association’s community-wide volunteer cleanup efforts. (Id. at 199a-203a.) He
concluded that Owner’s proposal lacks “quality units that we would expect to have
on South Broad Street that would attract professional people.” (Id. at 203a.)
In response to the Board’s question about the number of units in
surrounding multi-family buildings, the Association presented the testimony of
Christopher Todd Chadwick (Chadwick), who is affiliated with the Association.
Chadwick testified that most of the multi-family buildings on the surrounding block
have fewer than five units and that the Association is concerned that the block is
“approaching an extremely high density.” (Id. at 196a-98a.) He also expressed his
preference for increasing the number of “higher-end tenants” that rent larger
properties—a goal which he claimed Owner’s proposal would not further. He
expressed his doubts that Owner’s proposal would add value to the neighborhood,
adding: “I just don’t think that [Owner’s] design is good.” (Id. at 198a.)
The Association concluded its presentation with the testimony of two
city officials. First, Dillon Mahoney, from the office of Philadelphia City
Councilman Kenyatta Johnson, confirmed the Board’s receipt of a letter from
Councilman Johnson’s office opposing the proposal. He also testified that the
Association was more nearly affected by the proposal than another registered
community organization that supports the proposal. (Id. at 205a.) Second, Martin
Gregorsky (Gregorsky) of the Philadelphia City Planning Commission testified that
the South District portion of the city’s comprehensive plan recommends rezoning
5
the area in which the property is located to be included in the city’s most restrictive
multi-family zoning district (RM-1). (Id.)
On November 16, 2016, the Board issued an order granting Owner’s
request for a variance. To reach that result, the Board made the following relevant
findings of fact and conclusions of law:
Findings of Fact
....
16. Both [McArthur and Greenberg] described the area
immediately surrounding the [p]roperty as primarily
a mix of commercial uses and multi-family dwellings.
....
20. [McArthur] noted the characteristics of the existing
building that made its first floor unsuitable for use as
a single dwelling unit.
....
25. When asked by [Owner’s counsel] if decreasing the
size of the first and second floor units would enable
him to find tenants for that space, [Greenberg] said
yes and added “it will be much easier and make more
sense for the demographics and affordability of those
types of units.”
....
39. The Board found [Owner’s] witnesses’ testimony
regarding the nature of surrounding uses, the layout
of the existing building, and the feasibility of using
the [p]roperty as a three-family dwelling to be
credible.
Conclusions of Law[2]
....
8. The Board concludes that [Owner] here established
entitlement to the requested variance.
2
We note that some of the Board’s written “Conclusions of Law” address questions of both
law and fact.
6
....
11. The Board found [McArthur’s and Greenberg’s]
representations regarding the marketability of the first
and second floor units as currently configured
credible, persuasive, and sufficient to establish
unnecessary hardship.
12. The Board rejects [the Association’s] suggestion that
any hardship is self-inflicted because [Owner]
purchased the [p]roperty knowing it was approved for
three-family use.
....
14. The Board additionally concludes the variances [sic]
requested are the minimum necessary to afford relief.
Applicant does not propose expanding the existing
building and the number of units proposed would,
based on the [p]roperty’s lot size, be permitted by
right under RM-1 zoning.
15. The Board finally concludes that the requested
increase in dwelling units will not adversely affect the
public health, safety or welfare. With respect to this
criterion, the Board finds arguments raised by
opponents to be vague and not supported by credible,
relevant evidence.
....
19. For all of the above stated reasons, the Board
concludes that the requested variance was properly
granted.
(Appellant’s Br., Appendix 1 at 1-9.) The Association appealed the Board’s decision
to common pleas. By order dated September 6, 2017, common pleas reversed the
Board’s decision. Owner then appealed to this Court.
7
II. ISSUES ON APPEAL
On appeal,3 Owner raises the following three issues for our
consideration: (1) whether the Board abused its discretion and/or committed an error
of law by concluding that Owner demonstrated the existence of an unnecessary
hardship associated with its use of the property; (2) whether the Board abused its
discretion and/or committed an error of law by concluding that Owner demonstrated
that the proposal would not be detrimental to the public welfare or to the appropriate
use of surrounding properties; and (3) whether the Board abused its discretion and/or
committed an error of law by concluding that Owner demonstrated that the proposal
represented the minimum variance necessary to afford relief.
With respect to its first issue on appeal, Owner specifically argues that
the Board properly concluded that Owner demonstrated the existence of an
unnecessary hardship associated with its use of the property. Specifically, Owner
asserts that there are three bases, each supported by substantial evidence in the
record, that support the Board’s determination of unnecessary hardship: (1) the uses
of surrounding properties; (2) the physical condition of the property; and (3) the
proposed rezoning of the property.
III. DISCUSSION
A. Effect of the 2013 Variance
We first address the effect of the 2013 variance on Owner’s present
variance request, because, as we will explain, the existence of an applicable variance
3
“Where a trial court takes no additional evidence in an appeal from a decision of the
Board, this Court is limited to considering whether the Board erred as a matter of law or abused
its discretion.” German v. Zoning Bd. of Adjustment, 41 A.3d 947, 949 n.1 (Pa. Cmwlth. 2012).
“A zoning board abuses its discretion if its findings are not supported by substantial evidence.”
Arter v. Phila. Zoning Bd. of Adjustment, 916 A.2d 1222, 1226 n.9 (Pa. Cmwlth.), appeal denied,
934 A.2d 75 (Pa. 2007).
8
informs our analysis of Owner’s request for variance relief. The well-established
case law of this Court provides:
An owner [that] wishes to obtain a modification of a
condition [attached to a previously granted variance] . . .
can obtain relief if [the owner] establishes:
(1) Either grounds for traditional variance or changed
circumstances which render the condition
inappropriate; and
(2) Absence of injury to the public interest.
German, 41 A.3d at 950 (citations omitted) (quoting Ford v. Zoning Hearing Bd. of
Caernarvon Twp., 616 A.2d 1089, 1092 (Pa. Cmwlth. 1992) (“The approach this
[C]ourt has taken with regard to . . . conditions placed on . . . special exceptions is
also appropriate in cases involving conditions placed on the grant of variances.”));
see also Saber v. Zoning Hearing Bd. of Borough of Roaring Spring, 526 A.2d 464(Pa. Cmwlth. 1987) (applying traditional variance criteria to owner’s request to
modify condition attached to existing variance); Amoco Oil Co. v. Zoning Hearing
Bd. of Middletown Twp., 463 A.2d 103, 104 (Pa. Cmwlth. 1983) (holding that
showing of change in circumstances can support modification of condition attached
to special exception). Thus, an owner seeking relief from a condition attached to an
existing variance may decide whether to demonstrate changed circumstances or meet
the traditional standard for granting variances. In either case, the owner must also
show that the request to modify the condition is not contrary to the public interest.
As we have explained, this standard “reflects a respect for the finality of an
administrative body’s initial analysis of a particular set of circumstances when it
decides to grant a variance with conditions, but [it] also acknowledges that changes
in circumstances sometimes make conditions no longer appropriate.” German,
41 A.3d at 950.
9
For changed circumstances to support modification of a condition, the
record must contain substantial evidence of exactly “what changes in circumstances
render the [previously imposed] conditions no longer appropriate.” Id. (emphasis
in original). In German, an owner sought to expand the operating hours of his
restaurant, where his existing variance was subject to a condition restricting
operating hours. The owner argued that increased late-night competition from
nearby restaurants and an economic downturn were the changed circumstances
supporting his request for modification of the condition. The Court concluded that
the record did not contain evidence of the alleged economic downturn or evidence
of a change in competitors’ operating hours since the time owner obtained its
variance. The Court, accordingly, held that the Board’s finding of changed
circumstances was not supported by substantial evidence. Id. at 950-52. Thus, the
record must contain substantial evidence to show that the claimed change in
circumstances occurred between the time the condition was imposed and owner’s
request for modification. See id.; see also Emery v. City of Phila. Zoning Bd. of
Adjustment (Pa. Cmwlth., No. 725 C.D. 2013, filed Mar. 21, 2014) slip op. at 6 (“The
only change evinced in the record was the passage of time and that was insufficient
to meet the standards enunciated in Ford and German.”).4
An owner that does not show changed circumstances may still obtain
modification of a variance condition by meeting the standard to obtain a new
variance. See German, 41 A.3d at 950; Saber, 526 A.2d at 465-66. In Saber, a
printing business held a variance allowing construction of a loading dock on its
property, with a condition limiting operation to times between 7:30 a.m. and
4
Pursuant to Section 414(a) of this Court’s Internal Operating Procedures, 210 Pa. Code
§ 69.414(a), an unreported panel decision issued by this Court after January 15, 2008 may be cited
“for its persuasive value, but not as binding precedent.”
10
5:30 p.m. After the zoning hearing board granted the owner’s request to extend the
permitted operating hours to 9:30 p.m., this Court reversed that decision, holding
that the owner had failed to establish unnecessary hardship.
Significantly, we described the cognizable hardship in Saber as that
which was imposed by the condition prohibiting operation after 5:30 p.m., rather
than the hardship imposed by the zoning ordinance (which prohibited the loading
dock entirely and from which the board had granted the existing variance).
Saber, 526 A.2d at 465-66. We took the same approach in analyzing the effect of
the proposed modification upon the welfare of the community—another element of
the traditional variance standard—and discussed whether there was evidence that
permitting additional operation after 5:30 p.m. would harm the public interest.
Id. at 466. This approach is sensible, for a use variance is fundamentally a legislative
determination that an otherwise nonconforming use, when approved under specific
circumstances and subject to specific conditions, is entirely lawful. See Scalise v.
Zoning Hearing Bd. of Borough of W. Mifflin, 756 A.2d 163, 167-68
(Pa. Cmwlth. 2000). Courts and zoning boards must, therefore, recognize the legal
effect of an existing variance when considering an application for a new variance.5
Thus, we hold that when a court applies the traditional standard for variance relief
to a request to modify or remove a condition attached to an existing variance, the
court must consider the use of the property as permitted by the current variance and
5
That is not to say that an existing variance somehow controls or limits a zoning board’s
discretion when considering a new variance request under different circumstances for the same
property. To the contrary, the prior grant of a variance cannot create entitlement to or precedent
for further relief. Kensington S. Neighborhood Advisory Council v. Zoning Bd. of Adjustment of
Phila., 471 A.2d 1317, 1320 (Pa. Cmwlth. 1984) (“The fact that a prior variance was issued for
this property does not in any way lessen [a]ppellant’s burden in the instant case.”).
11
associated conditions to be the legally permitted use of the property from which the
owner is seeking a new variance.
In order to apply the foregoing law to the instant case, we must first
address Owner’s argument that the 2013 variance should not be considered because
Owner abandoned that variance. (Appellant’s Br. at 26-27.) This argument appears
to be disingenuous, as Owner applied for a permit and now seeks a variance to
increase the density of its multi-family use of the property from three (not one or
two) units to five. (R.R. at 3a.) Furthermore, Owner’s counsel represented on
several occasions during the hearing that the property is already subject to a
three-unit variance and that Owner is simply “seeking to increase the number of units
[from three] to five units.” (R.R. at 180a, 208a.) Regardless, Owner did not raise
this argument before the Board. We, therefore, do not reach the merits of this issue
because Owner has waived it. Soc’y Created to Reduce Urban Blight v. Zoning Bd.
of Adjustment, 804 A.2d 116, 119 (Pa. Cmwlth. 2002) (“If parties do not request that
the trial court hear additional evidence, they waive arguments which were not raised
before the [B]oard.”), appeal denied, 814 A.2d 679 (Pa. 2002).
Accordingly, we will treat Owner’s variance request as a request to
modify a condition attached to the 2013 variance—specifically, to increase the
number of units permitted under the 2013 variance from three to five, according to
the plans Owner submitted with its application. Under the case law set forth above,
Owner could have pursued its requested modification by claiming a change in
circumstances requiring a modification of the conditions of the 2013 variance. It
appears, however, that Owner did not take that approach, for the record contains no
evidence of a change in circumstances between 2013 and 2016. Reflecting this
absence of evidence, the Board made no finding or conclusion concerning a change
12
of circumstances during that specific period. Accordingly, because the record
cannot support a claim of changed circumstances, we will analyze Owner’s request
for modification using the same standard applicable to variances generally, and we
next address whether Owner has demonstrated unnecessary hardship sufficient to
justify granting a variance.
B. Unnecessary Hardship
A variance is a departure from the exact provisions of a zoning
ordinance. Brennen v. Zoning Bd. of Adjustment of the City of Connellsville,
187 A.2d 180, 182 (Pa. 1963).6 The party seeking the variance must show
substantial, serious, and compelling reasons for the variance request, including “that
unnecessary hardship will result if the variance is denied.” Singer v. Phila. Zoning
Bd. of Adjustment, 29 A.3d 144, 148-49 (Pa. Cmwlth. 2011). “The hardship must
be unique to the property at issue, not a hardship arising from the impact of the
zoning regulations on the entire district.” Marshall v. City of Phila., 97 A.3d 323,
329 (Pa. 2014). An applicant “is not required to show that the property at issue is
valueless without the variance or that the property cannot be used for any permitted
purpose.” Id. at 330 (emphasis in original). Mere economic hardship, however,
“will not of itself justify a grant of a variance.” Id. (quoting Wilson v. Plumstead
Twp. Zoning Hearing Bd., 936 A.2d 1061, 1069 (Pa. 2007)). In other words, “[m]ere
hardship is not sufficient; there must be unnecessary hardship.” Chestnut Hill,
155 A.3d at 668 (emphasis in original) (quoting Pincus v. Power, 101 A.2d 914, 916
6
This and some other authorities cited in this opinion address variances as governed by the
Municipalities Planning Code, Act of July 31, 1968, P.L. 805, as amended,
53 P.S. §§ 10101-11202 (MPC). Though the MPC does not apply to the City of Philadelphia,
which is instead governed by the Zoning Code, we cite relevant precedent from the MPC context
where there are no important differences between the provisions of the MPC and the Zoning Code.
See In re Chestnut Hill Cmty. Ass’n, 155 A.3d 658, 663 n.5 (Pa. Cmwlth. 2017).
13
(Pa. 1954)). Evidence that the property’s legally allowed use is less profitable than
the property’s proposed use is not sufficient to justify a variance. Marshall,
97 A.3d at 330. As we explained in discussing the effect of the 2013 variance, the
cognizable hardship is hardship that persists after considering the legal effect of an
existing variance, together with any conditions it imposes.
“When an applicant seeks a variance for a property located in
Philadelphia, the Board must also consider the factors set forth in the [Zoning
Code].” Singer, 29 A.3d at 148. Section 14-303(8)(e)(.1)(.a) of the Zoning Code
sets forth specific criteria that must be satisfied before the Board may grant a
variance. One of those criteria is that “[t]he denial of the variance would result in
an unnecessary hardship.” Zoning Code § 14-303(8)(e)(.1)(.a). With respect to a
use variance, Section 14-303(8)(e)(.2) of the Zoning Code further requires that the
Board, in order to reach a conclusion of unnecessary hardship, must make the
following factual 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
14
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.
Owner first claims that the evidence of record regarding the uses of
surrounding properties supports the Board’s conclusion of unnecessary hardship as
a matter of law. Owner essentially argues that the neighborhood’s transition from
single-family to multi-family use (which Owner demonstrated with testimony at the
hearing) imposes an unnecessary hardship on Owner if it is not allowed to
reconfigure its building from three units to five. In response, the Association argues
that Owner’s desired increase in the number of authorized units merely reflects
Owner’s wish to make the highest, most profitable use of its property that the
surrounding area will support, which does not demonstrate unnecessary hardship. In
its opinion issued pursuant to Pa. R.A.P. 1925(a) opinion, common pleas agreed,
noting that “the fact that two smaller units on the first and second floors would make
it ‘much easier and more sense for the demographics and affordability of those types
of units’ cannot—as matter of law—support a finding of unnecessary hardship.”
(Appellant’s Br., Appendix 3 at 8.)
While it is true that “the course of time may effect changes to [the]
property and the surrounding area, which may ultimately result in the creation of
an unnecessary hardship that did not previously exist,” S. of S. St. Neighborhood
Ass’n v. Phila. Zoning Bd. of Adjustment, 54 A.3d 115, 120 (Pa. Cmwlth. 2012)
(emphasis added), appeal dismissed as improvidently granted, 97 A.3d 1200(Pa. 2014), the nature of surrounding uses is typically not dispositive of the
unnecessary hardship issue. See Zoning Code at § 14-303(8)(e)(.2)(.a) (requiring
physical circumstances unique to property, rather than conditions created by Zoning
15
Code in area of property); Spadaro v. Zoning Bd. of Adjustment of Phila.,
147 A.2d 159, 161 (Pa. 1959) (holding that grant of variances to four neighboring
properties does not, in itself, demonstrate unnecessary hardship). But see Valley
View Civic Ass’n v. Zoning Bd. of Adjustment, 462 A.2d 637, 642 (Pa. 1983)
(holding that property’s dense commercial and industrial surroundings make it
“virtually unusable” as residential property and are sufficient grounds for conclusion
of unnecessary hardship).
Here, the Zoning Code requires a factual finding that the unnecessary
hardship is due to “unique physical circumstances or conditions . . . peculiar to the
property,” rather than to “circumstances or conditions generally created by the
provisions of this Zoning Code in the area or zoning district where the property is
located.” Zoning Code § 14-303(8)(e)(.2)(.a). Accordingly, that a hardship is
“unique to the property” remains a key requirement for a conclusion of unnecessary
hardship. Marshall, 97 A.3d at 329. Owner did present evidence to the Board
regarding the surrounding area’s transition toward multi-family use (R.R. at 183a),
but this case does not present unusual circumstances like those in Valley View.
Accordingly, Owner’s argument that surrounding uses have imposed an unnecessary
hardship is not persuasive without also examining the extent to which the property
is uniquely burdened by circumstances or conditions peculiar to the property. We
now turn to that question.
With respect to the physical condition of the property, Owner argues
that the physical condition itself imposes an unnecessary hardship that should justify
a variance. Specifically, Owner claims that it presented testimony that the property
is not marketable as it is currently configured, that the Board credited that testimony,
and that this finding is sufficient to establish unnecessary hardship. In response, the
16
Association argues that Owner did not present evidence that the property was
unmarketable as currently configured and admitted that tenants occupied two of the
three floors at the time of the hearing, demonstrating that the property was not, in
fact, unmarketable. As described above, common pleas held that Owner’s hardship
evidence supported only a finding that its use of the property would be easier or
more convenient if the variance were granted. Common pleas concluded that such
a finding is not legally sufficient to support the Board’s conclusion of unnecessary
hardship. Given the following analysis, we agree.
The Board’s conclusion of unnecessary hardship rests entirely on the
testimony of Greenberg and McArthur at the hearing before the Board:
11. The Board found [McArthur’s and Greenberg’s]
representations regarding the marketability of the first
and second floor units as currently configured credible,
persuasive, and sufficient to establish unnecessary
hardship.
(Appellant’s Br., Appendix 1 at 8.) Accepting as true all such “representations
regarding . . . marketability,” together with the other relevant factual findings on
which the Board’s determination rests, the Board’s findings are, as a matter of law,
insufficient to establish unnecessary hardship. The Board failed to make the factual
findings required by the Zoning Code—that the unnecessary hardship arises from
unique physical characteristics of the property, and that the property cannot be used
in conformity with the Zoning Code. See Zoning Code § 14-303(8)(e)(.2)(.a)-(.b).
The marketability findings the Board made concern “the impact of the zoning
regulations on the entire district” and are, therefore, insufficient as a matter of law
to support a conclusion of unnecessary hardship. Marshall, 97 A.3d at 329. While
an applicant “is not required to show that the property at issue is valueless without
the variance,” we note that, to the contrary, Owner admitted that tenants occupied
17
two of its three units at the time of the hearing. See id. At most, the Board found
that the property would be more easily marketable and more profitable if the Board
were to grant the requested variance. This mere economic hardship is insufficient
as a matter of law to demonstrate the unnecessary hardship required for a variance.
Id. at 330.
The evidence on which the Board relied for its findings similarly
suggests mere economic hardship and, thus, supports our conclusion. There was no
detailed testimony that the units in the building are larger than surrounding
multi-family buildings or that the permitted configuration of Owner’s property is
somehow different from nearby properties in a way that imposes hardship. There
was no comparison of square footage, rental rates, or rental prospects with similar
properties in the area. Instead, the Board credited testimony that (1) with respect to
the first floor only, because of its size, it is “fairly unfeasible” for use as a single
unit, and that it is “not really usable as a single-family unit,” (R.R. at 186a-87a)
(emphasis added); (2) with respect to the second floor only, it is “a little larger than
the typical unit sizes in [the] area,” (id. at 184a) (emphasis added); (3) in the
three-unit configuration, the units would be “very large compared to what would
make sense,” (id. at 184a) (emphasis added); (4) smaller units would “make more
sense” for the demographics of the area, (id. at 188a) (emphasis added); (5) the
“building itself is very large” and the second floor unit is “very, very large,” (id.
at 188a); (6) the five-unit variance would make renting units “much easier,” and
would “make more sense for the demographics and affordability” of the area, (id.
at 191a) (emphasis added); and (7) the first floor had remained vacant because it “is
so unreasonable to try to use it as a unit,” (id. at 189a) (emphasis added). This
testimony may speak to which uses are appropriate, convenient, or reasonable for
18
the property, but it does not address how unique aspects of the property impose an
unnecessary hardship on Owner, given the three-unit use already permitted by
the 2013 variance. Based on the foregoing analysis, we conclude that the Board’s
factual findings are legally insufficient to support its conclusion that Owner suffers
unnecessary hardship.
Our conclusion in this case is also supported by a comparison of the
facts here with those of cases where courts upheld variance relief. In Marshall, the
conclusion of unnecessary hardship rested upon credited testimony that an existing,
vacant school building—which was physically unique and uniquely situated—
would suffer disuse without “major, prohibitively expensive renovation.” Id.
at 332-33. Our Supreme Court held that such testimony was sufficient to establish
unnecessary hardship. This Court has more recently noted:
[I]n . . . cases where the hardship related to the
building itself and there was undue financial burden on the
applicants to bring the structure into conformance with the
applicable zoning ordinances, the structure was blighted or
a legal non-conforming use. Additionally and notably, the
expense associated with the extensive reconstruction or
demolition of the building was required in order to make
use of the property in conformance with the [Z]oning
[C]ode. In other words, unless the variances were granted,
the applicants would not have been able to make reasonable
use of the property without undue financial burden. Those
circumstances are not present here.
Pequea Twp. v. Zoning Hearing Bd. of Pequea Twp., 180 A.3d 500, 508 (Pa.
Cmwlth. 2018). Here, there is no allegation that the property will suffer disuse if the
variance is not granted, nor that Owner must incur expenses to comply with the
Zoning Code. The property is already subject to the 2013 variance, which permits
three-unit use, and the only unoccupied portion of the property cannot be occupied
because Owner has intentionally left it untenantable. While those facts are not
19
dispositive under Marshall, they do confirm our earlier conclusion that the Board
improperly granted the variance, given the lack of support for the Board’s conclusion
of unnecessary hardship.
Finally, Owner argues that the evidence of record regarding the
proposed rezoning of the property supports the Board’s conclusion of unnecessary
hardship as a matter of law. Owner argues that the Planning Commission’s proposed
rezoning of the property to RM-1 (the city’s most restrictive multi-family zoning
district) would permit five-unit use of the property as of right and that, therefore,
denial of a variance imposes an unnecessary hardship. In response, the Association
argues that proposed future zoning changes are irrelevant in determining whether a
variance is appropriate.
Testimony regarding the proposed rezoning addresses “hardship that
arises when outdated zoning prohibits the most productive use of property[, which]
affects the entire neighborhood and is not unique to the property for which a variance
is sought.” Jenkins v. City of Phila. (Pa. Cmwlth., No. 1470 C.D. 2014,
filed Aug. 3, 2015), slip op. at 10. Because zoning applicable to the entire zoning
district is, by definition, not unique to the property, it does not support a conclusion
of unnecessary hardship. Whether an area should be rezoned is a legislative
determination that the Board is not empowered to make. Comm’rs of Plymouth Twp.
v. Wannop, 320 A.2d 455, 458 (Pa. Cmwlth. 1974). Thus, Gregorsky’s testimony
regarding the proposed rezoning is not relevant to the Board’s determination of
whether Owner’s particular property suffers unnecessary hardship.
IV. CONCLUSION
For the foregoing reasons, the Board erred when it concluded that the
property is subject to an unnecessary hardship. Because the Board committed an
20
error of law, common pleas did not err in reversing the Board’s decision and order.7
Accordingly, we affirm common pleas’ order.
P. KEVIN BROBSON, Judge
Judges Cohn Jubelirer and Fizzano Cannon did not participate in the decision of
this case.
7
Given our disposition above, we need not address Owner’s remaining arguments on
appeal, because, without establishing unnecessary hardship, Owner cannot obtain the requested
use variance.
21
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
South Broad Street Neighborhood :
Association :
:
v. : No. 1454 C.D. 2017
:
Zoning Board of Adjustment :
and City of Philadelphia :
and Great Real Estate, LLC :
:
Appeal of: Great Real Estate, LLC :
ORDER
AND NOW, this 7th day of May, 2019, the order of the Court of
Common Pleas of Philadelphia County is hereby AFFIRMED.
P. KEVIN BROBSON, Judge