Scenic Phila v. Zoning Bd. of Phil: 417 N. 7th St Wall Wrap

Scenic Philadelphia, Mary Crawley Tracy, Old City Civic Association, and Kensington South Neighborhood Advisory Council V. The Zoning Board of Adjustment, the City of Philadelphia, Callowhill Center Associates and Metro Lights, LLC

The Commonwealth Court affirmed a trial court decision reversing the Board’s decision to grant a variance because the applicants did not suffer an undue hardship. Noting that the property would maintain 70 – 80% occupancy without the variance, the Court determined that the fact that the variance would allow the property owner to raise additional funds to pay for needed renovations does not meet the level of undue hardship.

In making this determination, the Court noted relied on the rule that financial hardship alone is not a sufficient basis for granting a variance; a variance will only be granted if they are able to show that property will be rendered valueless. Thus, property owners do not have a right to utilize land for their highest and best financial gain. The loss of rental income from disallowed outdoor advertising signs was not an unnecessary hardship, so the Trial Court was correct in overturning the Board’s decision to grant a variance.

 

Case History and Timeline:

In 1999, Callowhill Center Associates (“CCA”) erected a 65 foot by 100 foot non-accessory sign on the wall of a building located on North 7th Street in Philadelphia. In February 2000, after the sign had been in place for one year, CCA applied for zoning and use permits for a proposed sign, which was identical in proportion to the existing sign. L & I rejected the application because the sign would violate the outdoor advertising requirements of Sections 14-506, 14-1604 and 14-1604.1 of the zoning code.

Applicants appealed to the Board but did not dispute that the sign violates the zoning code. Instead, they argued that a variance should be granted. They presented the testimony of a representative of the owner of the building upon which the sign is to be placed. The representative testified that the building had been purchased from the Philadelphia school district in 1986. He noted that, at the time of the hearing, the building was 70 to 80% occupied by commercial tenants. In 2000 the facade of the building required repair and replacement of windows at a cost of $ 4.8 million. He explained that rental income was insufficient to fund the building repairs and maintained that renovations to the building would not have been possible without the sign revenue.

In opposition, Scenic Philadelphia, the Olde City Civic Association, and the Kensington South Neighborhood Advisory Council (collectively Objectors) presented testimony that the sign was blight. They also presented the testimony of an architect and city planner who opined that the sign violated the zoning code and would reduce the quality of the visual and aesthetic environment. Additionally, the Philadelphia Planning Commission submitted a report recommending that the variance be denied in light of the numerous violations of the zoning code.

The Board granted the variance. The Board concluded that the applicants would suffer an unnecessary hardship if the variance was not granted as their ability to fund the building repairs would be compromised.

On appeal, the trial court reversed, concluding that applicants did not suffer the required hardship. The trial court reasoned that, because the building was 70 to 80% occupied by commercial tenants when the sign was erected, the loss of the sign revenue did not render the property valueless. In addition, the trial court found that applicants waived several arguments including a constitutional challenge to Sections 14-1604 and 14-1604.1 of the zoning code. Applicants filed a timely appeal to the Pa. Commonwealth court.

The appellate court concluded the applicants waived the constitutional arguments, questioning the validity of the zoning code as a prior restraint on commercial speech and as exclusionary zoning, by failing to raise them before the Board. Further, the appellate court disagreed with the applicants that the trial court erred by reversing the Board’s grant of the variance. The appellate court reasoned that the Board erred as a matter of law by granting the variance when the applicants did not demonstrate the required showing of unnecessary hardship. Finally, the appellate court’s review of the record revealed the applicants’ sign fell within the definition of the term “sign” under Philadelphia, Pa., Zoning Code § 14-102(86).

Relevant Rules of Law:

1. A party seeking a variance bears the burden of proving that an unnecessary hardship will result if the variance is not granted and also that the variance will not be contrary to the public interest.

2.Financial hardship alone is not a sufficient basis for granting a variance; a variance will only be granted if they are able to show that property will be rendered valueless. Thus, property owners do not have a right to utilize land for their highest and best financial gain. The loss of rental income from disallowed outdoor advertising signs was not an unnecessary hardship.

Analysis:

The Commonwealth Court affirmed a trial court decision reversing the Board’s decision to grant a variance because the applicants did not suffer an undue hardship. Noting that the property would maintain 70 – 80% occupancy without the variance, the Court determined that the fact that the variance would allow the property owner to raise additional funds to pay for needed renovations does not meet the level of undue hardship.

Thus, the C concluded that “a mere showing of economic hardship or that a property could be utilized more profitably is insufficient to support the grant of a variance,” and held that the trial court was correct in reversing the Board’s decision to grant a variance because the applicants did not suffer an undue hardship.

Click Here for the 2010 Commonwealth Court Decision.