Metal Green Inc. v. City of Phila.

Citation266 A.3d 495
Decision Date22 December 2021
Docket NumberNo. 9 EAP 2021,9 EAP 2021
Parties METAL GREEN INC. and NOA Properties Inc. v. CITY OF PHILADELPHIA and City of Philadelphia Zoning Board of Adjustment and Wickham Kraemer III and Mary Kraemer, Husband and Wife Appeal of: Metal Green Inc.
CourtUnited States State Supreme Court of Pennsylvania

Stephen G. Pollock, Philadelphia, PA, Vincent B. Mancini, Mancini & Kodumal PLLC, Media, PA, for Appellant.

Sean Patrick Whalen, David Paul Dean, Vintage Law, LLC, Ardmore, PA, for Appellee.

BAER, C.J., SAYLOR, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.

OPINION ANNOUNCING THE JUDGMENT OF THE COURT

JUSTICE TODD

In this appeal by allowance, we consider the proper legal standard to be applied when considering an application for a "use variance"1 under the Philadelphia Zoning Code, as well as the appropriate standard of review for such determinations. For the reasons discussed below, we hold that the minimum variance requirement, as set forth in the Philadelphia Zoning Code, applies to use variances. Additionally, in determining the entitlement to a use variance, we conclude considerations of property blight and abandonment are more properly evaluated under the Code's unnecessary hardship requirement, rather than under the minimum variance requirement. Finally, we reaffirm our Court's traditional abuse of discretion or error of law standard of review with respect to a court's review of a variance determination; however, as a component thereof, we allow for review for a capricious disregard of the evidence under certain circumstances. Accordingly, we affirm in part, reverse in part, and remand.

I. Background

This matter involves the proposed redevelopment of a 90-year-old abandoned two-story industrial building, consisting of approximately 14,000 square feet, formerly used as a garage/warehouse facility. The property is located on a "flag lot"2 at 6800 Quincy Street, within the City of Philadelphia ("City"). In 2013, Appellant Metal Green Inc. ("Metal Green") purchased the property at a sheriff's sale for approximately $90,000. Thereafter, in August 2016, Mt. Airy USA, a local nonprofit organization whose goal is to transform blighted and underutilized areas into property that benefits the community, commenced a legal action against Metal Green pursuant to the 2008 Abandoned and Blighted Property Conservatorship Act ("Act 135").3 After legal proceedings in the Philadelphia Court of Common Pleas, the court declared the property to be blighted and abandoned and ordered Metal Green to remediate the hazards that the property posed to the community. While the court possessed the authority to order the demolition of the building, it held such action in abeyance, allowing Metal Green to not only make necessary repairs, but to pursue redevelopment of the property.4

Metal Green, along with NOA Properties, the owners of the property at that time, envisioned revitalizing the building on the property as apartments. Specifically, the plan proposed the conversion of the former interior warehouse space into 19 indoor parking spaces on the first floor, and an 18-unit apartment complex on the second floor. Metal Green ultimately submitted to the City Department of Licenses and Inspections the redevelopment plan and application for the approval of a building permit. The property, however, sits in the City's residential two-family RTA-1 zoning district, which permits, as a matter of right, residential two-family attached dwellings, i.e. , duplexes.5 As the project's use for the property as multi-family residential was not permitted as of right in a RTA-1 district, and thus constituted a non-conforming use, the Department of Licenses and Inspections denied Metal Green's application for a building permit. Metal Green and NOA Properties appealed the denial of the permit application to the Philadelphia Zoning Board of Adjustment ("Zoning Board") seeking a use variance. The Zoning Board conducted a hearing on the matter on September 19, 2017.6

At the hearing, both Metal Green and Appellees Francis Wickham Kraemer, III and Mary Kraemer (collectively, the "Kraemers"), as intervenors, presented testimony and other evidence. For its part, Metal Green offered various expert witnesses who testified, inter alia , about the general nature and character of the dwellings in the building's immediate neighborhood, traffic conditions, and the plan's impact on the community. Specifically, George Ritter, a licensed landscape architect, asserted that the redevelopment would change nothing about the neighborhood except that the building would be improved, and that it would have virtually no impact on neighbors. Ritter testified that the renovation of the building would only improve the value of the neighborhood, and not change its character. Because of the property's limited street frontage, Ritter opined that if the building were demolished, only one home would be allowed under the RTA-1 district – a single or dual family dwelling.

Relevant to the question before us involving the standard to be applied to use variance determinations, Ritter, when asked on cross examination whether 18 units represented the least amount of variance that was required for the plan, responded that "the choice that's being asked is to tear down the existing structure, abandon its use, and rebuild it ... this is the least that should be considered given the fact that the structure is there ... that it's being renovated ... and the hope is to retain it." Zoning Board Determination, 8/31/2018, at 4. Ritter also established the presence of other non-conforming structures, such as seven duplexes that had each been converted after the grant of prior variances into family apartment buildings, each containing 40 units, as well as two adjacent 9-story and 4-story apartment buildings, which contained 155 units and 94 units, respectively. However, the latter two buildings, though in close proximity, were located in a separate zoning district in which such uses were permitted as of right. Finally, Ritter offered unrebutted testimony that the previously converted duplexes had an average density of 62 units per acre, and the existing multi-story apartment complexes had an average density of 143 units per acre; by contrast, Metal Green's proposed redevelopment would result in a lower density of 55 units per acre.

Frank Montgomery, a traffic operations engineer, also testified. Montgomery described his review of the traffic surrounding the property and opined that Metal Green's proposal would not affect transportation in the area. Further, David Polatnick, a project architect, discussed the current building and plans for redevelopment. The President of Metal Green, Jack Azran, also testified as to the due diligence engaged in before and after the purchase of the property, as well as the steps taken to improve the property.

Finally, John J. Coyle, III, a certified real estate broker, testified regarding the physical dimensions of the building, the manner in which it occupied the rectangular lot on which it was situated, the character of the neighborhood, and his opinion that the proposal would increase the value of neighboring lots. According to Coyle, the RTA-1 district requirements imposed a burden on the property that could not be met without demolishing the building, the building was unsuited to commercial or industrial use, and it would not be commercially feasible to place two semi-detached single-family dwellings or two semi-attached dual family dwellings on the property. As discussed more fully below, Coyle also opined as to the relative square footage of neighboring apartment complexes compared to those proposed by Metal Green.

The Kraemers, along with other neighborhood residents who live in single-family dwellings in the same district, opposed the variance, and offered testimony that the proposed conversion would alter the historical nature and traditional character of their neighborhood, a community consisting mainly of single-family dwellings. Additionally, witnesses objected to the granting of the variance on the basis of predicted noise, traffic, congestion, and difficulties with on-street parking. Furthermore, witnesses expressed their concern that the proposed redevelopment project would increase the neighborhood's population density, that the 18 units did not satisfy the minimum variance requirement, but that they would be open to a less dense redevelopment.

After reviewing the testimony adduced at the hearing, the Zoning Board denied the variance request. Zoning Board Determination, 8/31/2018, at 1. In issuing its denial, the Zoning Board relied on the criteria set forth in Section 14-303(8)(e)(.1) of the Philadelphia Zoning Code regarding the requirements for a variance. The Zoning Board referenced three specific sections of that Code: the first requires the Zoning Board to consider whether "[t]he denial of the variance would result in an unnecessary hardship," Philadelphia Zoning Code, § 14-303(8)(e)(.1)(a); the second, of particular importance herein, mandates its consideration of whether "[t]he 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," id . § 14-303(8)(e)(.1)(b);7 and the third requires it to consider whether the grant of a variance would "endanger the public health, safety, or general welfare," id . § 14-303(8)(e)(.1)(d). Zoning Board Determination, 8/31/2018, at 7-9.

The Zoning Board concluded that, "[a]lthough the Property is an irregularly shaped lot improved with an existing structure, [Metal Green] did not establish that the requested variance represents the least minimum variance necessary to afford relief. It specifically did not establish that conversion to a less dense use, with fewer units, was not possible." Zoning Board Determination, 8/31/2018, at ¶ 9. Additionally, the Zoning Board found...

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