In re AZ Broad St. LLC

1

Appeal of: AZ Broad Street LLC From a Decision of: Zoning Board of Adjustment

No. 1354 C.D. 2021

Commonwealth Court of Pennsylvania

January 22, 2024

OPINION NOT REPORTED

Submitted: December 4, 2023

BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge, HONORABLE LORI A. DUMAS, Judge, HONORABLE BONNIE BRIGANCE LEADBETTER Senior Judge

MEMORANDUM OPINION

LORI A. DUMAS, JUDGE

The City of Philadelphia (the City) appeals from the order entered in the Court of Common Pleas of Philadelphia County (trial court), reversing the order of the Zoning Board of Adjustment (ZBA), which had denied an application for a use variance filed by AZ Broad Street, LLC (Applicant) in connection with the development of a vehicle equipment sales facility. After careful review, we deny Applicant's application to quash the City's appeal and reverse.

I. BACKGROUND^[1]

In 2019, Applicant purchased a 19,053-square foot lot located at the northeast corner of North Broad Street and Medary Avenue^[2] in the City of Philadelphia (Property). The Property is in a CMX-2.5 Commercial Zoning District but has been used for auto-related uses since 1933,^[3] including as a gas station and for new car sales. See Notes of Testimony (N.T.), 10/6/20, at 9-10; Agreement of Sale, 5/16/19. The surrounding area includes gas stations, used car lots, auto repair garages, collision shops, car washes, and tire shops, as well as near and adjacent residences. See N.T., 10/6/20, at 9, 46-48; N.T., 12/2/20, at 17-18. The Property currently consists of a "one story dilapidated structure defaced with graffiti and a parking lot that is filled with nonworking damaged vehicles, old tires and weeds . . . essentially a junk yard." See N.T., 10/6/20, at 9.

On January 22, 2020, Applicant filed a zoning/use registration application with the Department of Licenses & Inspections (L&I) for the proposed demolition of the existing structure on the Property and construction of a 6,000 square foot, one-story AutoZone retail building. The proposed use was identified as "vehicle equipment sales."^[4] L&I determined that the proposed use was prohibited in the CMX-2.5 zoning district and that the proposed side yard did not meet the Zoning Code's (Code) minimum 5-foot depth requirement. Accordingly, on February 17, 2020, L&I issued a notice of refusal.

Applicant timely appealed the denial to the ZBA, which held evidentiary hearings on October 6, 2020, and December 2, 2020.^[5] Of note, Applicant presented expert testimony asserting that it was impracticable to develop the Property for a permitted use. See N.T., 10/6/20, at 13-27. Further, given the Property's history of automotive-related uses, the City Planning Commission did not object to a variance. See N.T., 12/2/20, at 39. Nevertheless, the office of the local councilwoman, as well as the registered community organization (RCO) for the neighborhood, opposed the project.^[6] See id. at 8-12, 13-14.

The ZBA denied the appeal, concluding that Applicant had not proven an unnecessary hardship. See ZBA Decision, 12/9/20, at 10-13 (specifically rejecting Applicant's expert testimony as not credible). Applicant timely appealed to the trial court, and the City opposed the appeal.^[7] Following briefing and oral argument, the trial court issued an order finding that the ZBA had abused its discretion, reversing the ZBA's decision, and remanding with instructions to grant the variance. See Trial Ct. Op., 3/14/22, at 7-10.

The City timely appealed to this Court.^[8]

II. ISSUE^[9]

The City contends that substantial evidence supported the ZBA's conclusion that Applicant failed to establish an unnecessary hardship.^[10] See City's Br. at 3.

III. DISCUSSION

A. The Parties' Arguments

The City contends that Applicant was not entitled to a use variance because it failed to establish an unnecessary hardship. See City's Br. at 7. The City notes, for example, that an applicant must establish "unique physical circumstances or conditions" that preclude any possible use that conforms to the Code, thus necessitating a variance to enable a viable economic use of the subject property. Id. at 8-9 (quoting Philadelphia Zoning Code § 14-303(8)(e)(.2)). However, according to the City, Applicant limited its evidence to alleged difficulties with "certain permitted uses" but failed to account for "any of the other myriad permitted uses." Id. at 10.^[11]

Moreover, the City asserts that Applicant's emphasis on the abundance of similar, auto-related uses in the surrounding area "misses the point" because an applicant must introduce evidence demonstrating circumstances or conditions that are unique to the Property itself, not the surrounding area. Id. at 14. Relatedly, the City rejects Applicant's reliance on the history of the Property, in particular Applicant's reference to a 2005-approval for a similar use. Id. at 14-15. According to the City, these are not appropriate considerations when evaluating a claim of unnecessary hardship. Id.

In response, Applicant asserts that it established a hardship unique to the Property. See Applicant's Br. at 11-12. According to Applicant, even though the Property is zoned CMX-2.5, for nearly a century, it has never been used for a permitted use by right but, rather, always for auto-related uses.^[12] See id. Applicant contends that because the Property is surrounded by extensive auto-related uses, uses other than auto-related uses are nearly impossible. See id. at 12. In addition, due to its location, configuration, and size, development of the Property in strict conformance with the Code is infeasible. See id.

B. Decision of the ZBA

At the hearings in this case, the evidence established that the Property has been used for auto-related uses since 1933, including as a gas station and for new car sales. See N.T., 10/6/20, at 9-10. It is currently used as a junkyard storing inoperable vehicles. See id. Further, the majority of the surrounding uses are automotive related. See id.

In support of its application, Applicant presented testimony from Gregory Newell, a civil engineering and planning consultant for the project. Newell testified that he has appeared as an expert witness in nearly 500 different zoning hearings over the years. See N.T., 10/6/20, at 12-18. His testimony as an expert was not challenged by the ZBA. See id.

According to Newell, an auto-related sales use was the only viable option for the Property, due to the small size for a commercial lot and the other permitted uses in the area. See id. at 14. Newell testified regarding certain other uses permitted in the CMX-2.5 zoning district, including a building supply store, a convenience store, a pharmacy, a coffee shop, or a daycare facility.^[13] See id. at 15-18. However, he stated these uses were impossible due to space and parking constraints: the lot was not large enough for the curb cuts or drive-throughs that some of the proposed uses would require. See id. Newell stated that, logistically, the size of the lot and its limited accessibility options made it difficult to utilize the Property for purposes other than the proposed use. See id. at 18.

In addition to the testimony of Newell, Applicant presented the testimony of Marshall Cook, a regional manager of Auto Zone stores. See N.T., 10/6/20, at 24-26. His testimony concerned his familiarity with Auto Zone stores, generally. See id. Ron Bednar, representing the City Planning Commission, stated that given the historical and current use of the Property, the Commission had no objection to the application. See N.T., 12/2/20, at 39.

There was some disagreement at the evidentiary hearings regarding community support for the project, first in the October 2020 hearing and again in the December 2020 hearing. While the OLCAA RCO initially supported the project, it later withdrew its support. See N.T., 10/6/20, at 28; N.T., 12/2/20, at 28-29. Further, a representative of the local councilperson's office testified that near neighbors did not approve. See N.T., 10/6/20, at 28; N.T., 12/2/20, at 28-29. On the other hand, testimony adduced from one neighbor in December indicated that she and other neighbors on her block were not opposed to the project. See N.T., 12/2/20, at 23.

Based on this evidence, the ZBA concluded that the requested use was prohibited and that Applicant had not proven an unnecessary hardship. See ZBA Decision, 12/9/20, at 10-13. Specifically, the ZBA concluded that while the Property had historically been approved for auto-related uses, there were no physical impediments precluding a permitted use going forward. See id. at 12. The ZBA did not find Newell's expert testimony "valid" or "credible," particularly regarding other viable uses of the site. See id. at 13-14. The ZBA noted that the identification of similar surrounding uses was insufficient for the grant of a variance. See id. Specifically, the ZBA noted that although there are many automotive uses surrounding the Property, the lot itself is regularly shaped and there are a "myriad" of other retail and commercial uses permitted. See id. at 14. Therefore, the ZBA rejected Applicant's contention that the only possible use for the Property was a vehicle parts store as not credible or persuasive. See id. at 14. While the ZBA noted its general deference to the concerns of neighbors and RCOs, ultimately, it concluded that even unanimous support of the community would be insufficient where an applicant did not establish an unnecessary hardship. See id.

C. No Unnecessary Hardship

The party applying for a variance bears the burden of proof, and it is the function of the zoning board to determine whether the applicant has met the criteria for granting a variance. Metal Green Inc. v. City of Phila., 266 A.3d 495, 506 (Pa. 2021). "A variance is a...