726 Market Street — 831 A.2d 1255 (Pa. Commw. 2003)

Scenic Philadelphia, Center City Residents Association (CCRA), Mary Cawley Tracy, and Councilman David Cohen, Estate of Samuel Rappaport v. Zoning Board of Adjustment, City of Philadelphia, and Outdoor Works and Estate of Samuel Rappaport. Appeal of: Outdoor Works

Case History

May 3, 2004: The wall wrap was finally removed.

September 8, 2003: The Commonwealth Court of Pennsylvania, like the trial court, found that a financial hardship is not sufficient to establish a hardship. Further, should any hardship exist, it is from the owner’s failure to rehabilitate the property. Additionally, granting a variance was against public interest because allowing such signs could provide a disincentive for property owners to rehabilitate their properties.

October 8, 2002: Court of Common Pleas reversed the decision on Appeal, finding that the Board abused its discretion in granting the variance.

July 11, 2000: ZBA grants a variance for the wall wrap display.

February 22, 2000: L&I denies permit request.

Facts

On February 22, 2000, applicant submitted an application for a use permit to L&I to “install one wall-mounted, single-face, non-illuminated wall-wrap display (62′ wide by 100′ high) approximately 142′ from grade to top of wall-wrap display” on the building located at 726-728 Market Street, which is in a C-5 Commercial District.

L&I denied the application pursuant to Sections 14-305 and 14-1604 of the Zoning Code finding that, non-accessory general outdoor area sign is prohibited in the district . . . this sign is not permitted unless another general outdoor advertising sign or signs encompassing equal or greater sign area are removed . . . this sign exceeds the maximum allowable height of 20 feet above the road surface and . . . this sign exceeds the maximum allowable height of 25 feet from the bottom edge to the top of the sign

Applicant appealed L&I’s decision to the Board and a hearing was held on July 11, 2001. Applicant presented the testimony of a civil engineer who conducted a visual, structural inspection of portions of the subject wall and prepared a structural engineering report. He testified that the wall wrap itself was not within 300 feet of any residentially-zoned property, 500 feet of any other non-accessory sign, 600 feet of a ramp to a major highway, or 660 feet of a bridge, registered historic district, park, or a school. He further testified that, based upon his structural inspection of the wall, it could support the wall wrap. However the engineer acknowledged that the wall wrap did not comply with the height and area restrictions set forth in Section 14-1604 of the Zoning Code. Further, on cross-examination, he testified that he was not aware that the wall wrap was located within the East Center City Historic District.

The company that managed the property for the owner of the building, testified that the building was purchased in the mid-1970s; that it was nine stories high; and that the floors above the first floor were sealed off and not used. The first floor contained a beauty salon, which occupied approximately one-third of the rental space available on that floor. The income generated from this lone tenant was not sufficient to cover the expenses associated with the property, including real estate taxes, insurance, maintenance and security. Most of the available first floor space had been previously occupied by a McDonald’s restaurant.

According to this company, they had actively marketed the building to secure other tenants, but those efforts had been unsuccessful. The manager opined that the upper floors were “not economically feasible to be brought into an income producing stream. Finally, he indicated that various signs and advertisements had been displayed on the building for many years and that the current wall wrap was not a detriment to the integrity of the building structure itself.

On cross-examination, the manager testified that when the building was purchased, there were no tenants above the second floor and that RRR primarily made improvements to the first floor to attract tenants. He added that none of the building’s three elevators worked and that the building lacked air conditioning. He also stated that he was unaware of certain tax credits and abatements that could be used to help fund repairs to the building.

The president of applicant, testified that he became interested in putting a wall wrap on the building in 1998 or 1999 and, as a result, he entered into an agreement with the Estate. He indicated that he was aware that a license had been granted to paint a mural on the wall and that one had been situated on the building for some time. He also stated that his long term plan for the building was to place a wall wrap on it that would complement “what is eventually developed” at Eighth and Market Streets.

During cross-examination, the applicant’s president was asked to comment about a letter issued by L&I on July 15, 1999, granting provisional permission for a wall wrap as long as the wrap promoted the development of Market Street. He indicated that while the current wrap did not specifically promote Market Street, it did complement the civic orientation of Philadelphia. In any event, the current wall wrap was not a result of that application.

In opposition, SCRUB, the Center City Residents Association, and Councilman David Cohen (collectively Objectors), presented the testimony of the Director of Advocacy for the Foundation for Architecture, a City-wide non-profit organization whose According to Ms. Potter, the wall wrap raised several issues that had not been thoroughly explored by the City of Philadelphia, its agencies or its citizens. Although her group typically did not take a particular position with respect to outdoor signs, in this case, it was concerned that the income generated by such wall wraps would create a disincentive for building owners to repair, maintain, and/or rehabilitate their properties. She envisioned “temporary wall wraps turning vacant properties into nothing but long-term permit props for mega-sized outdoor advertising. Accordingly, she believed that further thought and study were necessary for the public to understand the effect of wall wraps on the City.

Objectors also presented the testimony of a licensed architect and community planner who prepared a preliminary report regarding the property. He testified that the buildings on the south side of the 700 block of Market Street were in good to excellent condition and that renovations had taken place on the upper floors of many of the properties. He also noted that the commercial properties on both sides of the 700 block of Market Street were substantially occupied.

The architect also testified that he obtained various maps from the Philadelphia Historical Commission during the course of preparing his report, including maps of the Society Hill Historic District and the East Center City Historic District. The maps indicated that the wall wrap was within the latter and within 660 feet of the former. The wrap, according to him, was also within 660 feet of the Declaration (Graff) House, a park under the jurisdiction of the National Park Service. He also referred the Board to his report, in which he identified nine features of the wall wrap that were not in conformity with the Zoning Code.

Finally, the Board was presented with a letter from the Philadelphia Planning Commission dated June 29, 2001, wherein the Commission indicated that it opposed the grant of a variance because the application involved what it considered to be major departures from various applicable City ordinances and would not be in the public interest.

The Board granted applicant’s variance for a wall wrap display. SCRUB appealed the Board’s decision. Specifically, it concluded that applicant satisfied all of the requirements of Section 14-1604 of the Zoning Code “except the maximum square footage requirement for the sign face under Section 14-1604(5) and the height restrictions under Section 14-1604(6),” and that these “square footage and height restrictions are dimensional requirements and may be remedied by the grant of a dimensional variance.

The Board further concluded that the proposed changes to the subject property are not contrary to the public interest because they do not infringe on the purposes served by applicable zoning requirements or otherwise detrimentally affect the members of the public, neighborhood or adjacent property owners. In addition, the proposed changes will result in an unnecessary hardship on the subject property and its owner if the requested variance is not granted because the subject property has been vacant notwithstanding diligent efforts of the owner to secure tenants for alternative uses over an extended period of time encompassing more than two decades.

The trial court reversed the board’s decision, finding that the Board abused its discretion in granting the variance. Specifically, it found, first, that the Board’s finding of facts, were not supported by substantial evidence. Next, it found that applicant did not prove the required hardship because financial hardship, without more, is not sufficient to grant a variance. Further, to the extent there was a hardship, it was the product of the owner’s failure to rehabilitate the property and make it attractive to tenants, as opposed to any unique problems associated with the property itself. The trial court also found that granting the variance was against the public interest because, among other things, Section 14-604 of the Zoning Code specifically disfavors such signs and allowing them could provide a disincentive for property owners to rehabilitate their properties.

The applicant appealed the trial court’s decision to the Pa. Commonwealth court.

On appeal, the applicant argued that the trial court erred by reversing the Board’s grant of a variance because the Board heard substantial evidence demonstrating unnecessary hardship to the property attributable to the location of the property, the neighborhood’s rental market, and the obsolete condition of the building. The Objectors responded that the record was devoid of any evidence of unnecessary hardship.

Issue

Whether the trial court erred in reversing the decision of the Board to grant the applicant a dimensional variance?

Whether the trial court erred in ruling the Board abused their discretion in finding that the applicant suffered an undue hardship and therefore granting a variance?

Rule of Law

In Pennsylvania, where the trial court takes no additional evidence, an appellate court’s scope of review is limited to determining whether the Zoning Board of Adjustment abused its discretion or committed an error of law. The appellate court may conclude that the Board abused its discretion only if its findings are not supported by substantial evidence. Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.

A party seeking a variance bears the burden of proving, inter alia, that an unnecessary hardship will result if the variance is not granted. Absent a finding that property will be rendered valueless, financial hardship alone is not a sufficient basis for granting a variance. Typically, the loss of rental income from disallowed outdoor advertising signs is not an unnecessary hardship. Under the Zoning Code § 14-1802(1)(b), (d), the applicant must also present evidence that the conditions on which the appeal for a variance is based are unique to the property and that the special conditions or circumstances forming the basis for the variance did not result from the actions of the applicant.

Holding

To the extent the Board granted a dimensional variance, it clearly erred. We have repeatedly held that variances from Section 14-604 of the Zoning Code are not dimensional. Granting a dimensional variance for the wall wrap was error because variances from the zoning Code § 14-1604 were not dimensional. In addition, the only hardship asserted by the applicant was a financial hardship. However, this hardship was created by the property owner’s failure, over a period of more than 25 years, to take any steps to rehabilitate the property beyond the first floor. There was not a unique problem with the property undermining its rental value. Finally, even if the applicant did show the requisite hardship, that hardship would not support the erection of a wall wrap that did not comply with the area and height requirements of City of Philadelphia, Pa., Zoning Code § 14-1604(5), (6).

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