Liberties Lofts LLC v. Zoning Bd. of Adjustment

• Decision Date: 02 April 2018
• Docket Number: No. 827 C.D. 2017,827 C.D. 2017
• Parties: LIBERTIES LOFTS LLC, Appellant v. ZONING BOARD OF ADJUSTMENT
• Court: Pennsylvania Commonwealth Court

182 A.3d 513

LIBERTIES LOFTS LLC, Appellant

v.ZONING BOARD OF ADJUSTMENT

No. 827 C.D. 2017

Commonwealth Court of Pennsylvania.

Argued March 8, 2018

Decided April 2, 2018

Sean P. Whalen, Ardmore, for appellant.

Michael V. Phillips, Philadelphia, for appellee.

BEFORE: HONORABLE ROBERT SIMPSON, Judge, HONORABLE ANNE E. COVEY, Judge, HONORABLE JAMES GARDNER COLINS, Senior Judge

OPINION BY JUDGE SIMPSON

In this zoning appeal, Liberties Lofts LLC (Objector) asks whether the Court of Common Pleas of Philadelphia County¹ (trial court) erred in affirming a decision of the Philadelphia Zoning Board of Adjustment (ZBA) that granted a use variance to Hightop Brown, LLC (Applicant) to permit construction of a 26–unit multi-family residence with one commercial space in an ICMX Industrial Commercial Mixed–Use Zoning District in the City of Philadelphia (City). Despite raising numerous issues, Objector essentially argues that: (1) Applicant lacked standing to seek the requested zoning relief; and, (2) the ZBA erred in granting the variance where Applicant did not satisfy the requisite variance criteria. Upon review, we affirm.

I. Background

The ZBA made the following findings. In April 2016, Applicant, the equitable owner of the property located at 723–729 North Sixth Street (subject property), applied to the Philadelphia Department of Licenses and Inspections (L & I) for a zoning/use registration permit for the proposed construction of a 5–story, 26–unit, multi-family residence with one commercial space, garage parking for 14 cars, and a roof deck and pilot house. L & I determined the proposed use was prohibited in the ICMX zoning district in which the subject property lies pursuant to the Philadelphia Zoning Code (Zoning Code). Thus, L & I issued a notice of refusal. Applicant appealed to the ZBA. A hearing ensued.

The hearing record revealed that the subject property is an 8,762–square foot lot located at the southeast corner of North Sixth and Brown Streets in the City. It is improved with a one-story structure that Applicant's counsel described as a "blighted ... former industrial building" that was "mostly vacant for some time." ZBA Op., 11/23/16, Finding of Fact (F.F.) No. 8 (quoting ZBA Hr'g, 6/22/16, Notes of Testimony (N.T.) at 3). The area surrounding the subject property is comprised of a mix of Residential Multi–Family–1 (RM–1), Residential Single–Family Attached–5 (RSA–5), Industrial Residential Mixed–Use (IRMX), and Neighborhood Commercial Mixed–Use–2 (CMX–2) zoning districts. Applicant's counsel described the surrounding area as including a number of residential uses:

To the north there is a series of single family houses. To our west there is a school. To the east there are multi[-] family houses. And directly to the east is a large 61–unit, multi[-]family building. And to our south is also a couple of multi[-]family properties as well.

F.F. No. 10 (quoting N.T. at 5–6).

Applicant's counsel submitted a list identifying 11 multi-family residential uses in the immediate vicinity, including a 61–unit multi-family building located adjacent to the subject property, which was approved by virtue of a use variance granted in 2001.

Applicant's counsel described Applicant's proposal as "a five story building, 26 condo units, 14 parking spaces at the ground floor, as well as a small commercial space on the corner." F.F. No. 12. He indicated that two 700–square foot one-bedroom units would be located on the ground floor and the remaining 24 units—a mix of one and two-bedroom units ranging from 1,000 to 1,300 square feet—would be located on the upper floors. Applicant's counsel described the building as designed "to an IRMX standard" and stated the height of the building is intended to "match the height of the adjacent building." Id. (quoting N.T. at 4, 47).

Applicant's counsel further stated Applicant had numerous meetings with the community prior to appearing before the ZBA, and Applicant revised its proposal in response to community requests for more on-site parking and "activity along North 6^th Street." F.F. No. 13 (quoting N.T. at 4).

In support of its variance request, Applicant presented the testimony of project architect Michael Skolnick (Applicant's Architect) regarding the design and use of the proposed building and its compatibility with surrounding uses. Applicant's Architect stated that, in designing the proposed multi-family dwelling, Applicant "looked at adjacent land uses and the adjacent zoning" then "tried to ... design this project based on an IRMX use." F.F. No. 16 (quoting N.T. at 5–6). Applicant's Architect described the proposal as "pretty consistent with everything around us" and stated "we believe that we comply with that IRMX use with the area, the [height], the uses that are in the buildings, as well as our adjacent property." F.F. No. 16 (quoting N.T. at 12). Applicant's Architect estimated the height of the adjacent multi-family building as approximately "55 feet to the roofline." F.F. No. 17 (quoting N.T. at 7).

Applicant also presented the testimony of its corporate representative David Landskroner (Applicant's Representative). Applicant's Representative testified that he "reviewed leases [and] seller documentation[,]" "did an inspection of the [subject] property and ... ran financial analyses to make sure that the project made sense from an economic standpoint." F.F. No. 19 (citing N.T. at 8).

Describing the subject property's rental history, Applicant's Representative stated, "the [subject] property consists of four spaces, and there is a long history of vacancy." F.F. No. 20. He then identified the prior uses by space, stating that space A "was a kitchen business that went out of business in 2009," space B was a "grocery store that went out of business in 2014," space C was a "gym and karate space" that was "vacated in January of 2016," and space D was occupied by tenants who chose not to renew their lease when it expired in 2015 and remained at the subject property "on a month-to-month lease" while "looking for a new space." F.F. No. 20 (quoting N.T. at 9). Applicant's Representative noted that the prior tenants in space B "were delinquent in their rent month after month" and the prior tenants of space C "were three to six months in arrears in rent" and in default on their lease when they vacated the property in January 2016. F.F. No. 21 (quoting N.T. at 9).

Applicant's Representative described the existing structure as "a single story, old, dilapidated, outdated warehouse" and the rental spaces as needing "extensive renovations." F.F. No. 22 (quoting N.T. at 8–9). When questioned about the viability of ICMX uses for the subject property, and specifically asked if "after the cost of renovation, of demolition" he could "find a tenant to pay any kind of market rent that would make this project work," Applicant's Representative responded "absolutely not." F.F. No. 23 (quoting N.T. at 10).

Applicant's Representative also submitted documents pertaining to the feasibility of retail, industrial, and residential uses of the subject property using a range of purchase prices, including a purchase price of zero. The results supported his conclusion that retail and industrial uses were not viable, even assuming a zero cost. F.F. No. 25. When asked if there was "any scenario where [he] could utilize the property with an ICMX use and not lose money, [Applicant's Representative] responded 'Absolutely not. The property, as it is zoned currently, is valueless. There's no value.' " F.F. No. 26 (quoting N.T. at 11).

In addition, Applicant presented the testimony of Jacob Cooper, the managing director of MSC Retail, a commercial real estate brokerage firm based in the City (Applicant's Commercial Real Estate Broker), who testified he was familiar with the Northern Liberties neighborhood in which the subject property is located. When asked to describe the type of retail, commercial and industrial uses commonly located there, Applicant's Commercial Real Estate Broker stated: "Depending on the street it's a variety of neighborhood goods and services, food and beverage uses, fitness uses, ground floor offices. As you move more north to Fishtown, there is more entertainment-driven uses. Also specifically along the Delaware Avenue corridor as well." F.F. No. 30 (quoting N.T. at 13).

When asked if there was "a particular area in Northern Liberties where the retail market is stronger," Applicant's Commercial Real Estate Broker replied:

North Second Street is really the main corridor of retail activity in Norther[n] Liberties. Other prime intersections are Frankford Avenue and Girard Avenue, which [go] into Fishtown. Specifically in Northern Liberties it is the larger streets, so it's Spring Garden, it's North Second Street, largely between Fairmount and Girard, as well as West Girard Avenue to the north of Northern Liberties.

F.F. No. 31 (quoting N.T. at 13).

Further, when asked if there was a strong market for retail use at the corner of Sixth and Brown Streets, Applicant's Commercial Real Estate Broker opined it "is not a viable retail location or one that I would characterize with any significant retail value." F.F. No. 32 (quoting N.T. at 15). Applicant's Commercial Real Estate Broker testified the existing building on the subject property is not, in any case, rentable in its current condition. Applicant's Commercial Real Estate Broker opined the subject property also was not "a viable industrial site ... [l]argely because of the physical nature of the building, the lack of high ceilings, the lack of loading, the lack of parking, as well as the surrounding nature of the building in the neighborhood." F.F. No. 34 (quoting N.T. at 17).

In opposition to the requested variance, Howard Silverman, an attorney and the managing member of Liberties Lofts (Objector's Representative), testified regarding Objector's opposition to the proposed development. When questioned by Applicant's counsel, Objector's Representative acknowledged that the...