High Court Tackles Minimum Variance Requirement in Philadelphia in ‘Metal Green’

Unlike other jurisdictions in the commonwealth, the city of Philadelphia has its own zoning code as it pertains to real estate development within city limits.

The city of Philadelphia’s Zoning Board of Adjustment (ZBA) decides whether to grant or deny a proposed variance request under the Philadelphia Zoning Code.

On many occasions, the ZBA confronts the merits of use variance requests regarding proposed real estate development on properties that have been neglected for generations.

In a ruling handed down last month, the Pennsylvania Supreme Court in Metal Green v. City of Philadelphia, 2021 Pa. LEXIS 4310 (Dec. 22, 2021) discussed how the existence of an abandoned or blighted building structure should affect whether a use variance request should be granted or denied under the Philadelphia Zoning Code.

In Metal Green, the property owner proposed the 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 opinion said.

Previously, the property was deemed blighted under the 2008 Abandoned and Blighted Property Conservatorship Act (Act 135) and the property owner was ordered to remediate the hazards that the property posed to the public, the opinion said.

In response, the property owner proposed to convert the former interior warehouse space into 19 indoor parking spaces on the first floor of the building structure, and an 18-unit apartment complex on the second floor of the building structure.

Since the property’s zoning classification of RTA-1 did not allow for the proposed use of the property as a matter of right under the Philadelphia Zoning Code, the city’s Department of Licenses and Inspections (L&I) denied the zoning permit application by way of the issuance of a notice of refusal, the opinion said.

Under the stated zoning classification, the property could be used, at most, as a residential duplex.

After receiving the notice of refusal, the property owner appealed the denial of the zoning permit application to the ZBA by seeking a use variance under the Philadelphia Zoning Code.

In addition to the property owner, Francis Wickham Kraemer III and Mary Kraemer intervened as interested parties, testified at the hearing and provided other evidence to the ZBA.

According to the opinion, the property owner provided various expert witnesses, such as an architect, traffic operations engineer, and certified real estate broker, who testified, inter alia, about the general nature and character of the dwellings in the building’s immediate neighborhood, traffic conditions and the proposed impact on the community.

At the hearing, the architect testified that the proposed property redevelopment would change nothing about the neighborhood except that the building structure would be improved and that it would have virtually no impact on neighbors, the opinion said.

When asked whether the proposed 18 residential dwelling units was a de minimis variance under the circumstances, the architect highlighted that the property was being renovated instead of being demolished to build a new structure, the opinion said.

The Kraemers and nearby neighbors opposed the variance citing concerns regarding the impact the real estate development would have on the historical nature and traditional character of the neighborhood as well as concerns regarding noise, traffic, congestion and on-street parking, the opinion said.

Citing the criteria set forth in Section 14-303(8)(e)(.1) of the Philadelphia Zoning Code, the ZBA denied the variance request.

In doing so, the ZBA referenced three specific sections of the Philadelphia Zoning Code—the first requires the ZBA to consider whether “the denial of the variance would result in an unnecessary hardship”; the second, mandates its consideration of whether “the 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”; and the third requires it to consider whether the grant of a variance would “endanger the public health, safety or general welfare.”

The property owner appealed the ZBA’s ruling to the Philadelphia County Common Pleas Court.

The trial court in Metal Green reversed the ZBA’s decision and granted the requested use variance, concluding that the ZBA committed an error of law by applying the minimum variance requirement in ruling on the requested use variance.

The trial court in Metal Green further determined that, even if the minimum variance requirement was applicable, the property owner, through testimony and evidence, had met the requirements of that test by demonstrating that construction of the 18-unit apartment complex was the least modification possible from the Philadelphia Zoning Code’s permitted use, in that the proposed real estate development would be consistent with the character of the neighborhood and would result in an apartment complex with less density per acre than either of the surrounding properties that had already been converted to apartments.

The Kraemers appealed to the trial court’s ruling to the Commonwealth Court, which reversed the trial court’s ruling in a published opinion.

The Commonwealth Court’s ruling was appealed to the Pennsylvania Supreme Court.

On appeal, the Supreme Court addressed, among other things, whether the minimum variance requirement, which, in the past, has been applied only to dimensional variances, is applicable to a use variance, and if so, the parameters for such a requirement as applied to blighted or abandoned property.

While acknowledging that, under the Philadelphia Zoning Code, it is proper to apply the minimum variance requirement for a use variance request, the property owner in Metal Green asserted that the minimum variance requirement should be relaxed to include an adjustment for properties designated as blighted under Act 135.

The property owner in Metal Green suggested that a reviewing court should use the multi-factor test which the Supreme Court applied in Hertzberg v. Zoning Board of Adjustment of the City of Pittsburgh, 721 A.2d 43, 47 (Pa. 1998), to determine whether a proposed use is the minimum variance for development of a blighted property.

In Hertzberg, the Supreme Court determined that it was appropriate for a reviewing court to consider the economic detriment to the applicant if the variance was denied, the financial hardship created by any work necessary to bring the building into strict compliance with the applicable zoning requirements, and the characteristics of the surrounding neighborhood.

Regarding the property owner’s assertion that, because the property was declared as blighted under Act 135, its variance application should be subject to a relaxed standard, the Kraemers proposed that the blighted status of a property should only be relevant only to the extent it relates to showing an unnecessary hardship, but it has no relevance in determining whether a proposed use is the minimum variance required.

In its opinion, the Supreme Court in Metal Green first highlighted that for both dimensional and use variances, the Philadelphia Zoning Code, by its plain and unambiguous terms, now contains a requirement that the variance be the “minimum variance that will afford relief and will represent the least modification possible of the use or dimensional regulation in issue.”

In addressing the property owner’s argument regarding the relation of the minimum variance requirement, the Supreme Court in Metal Green stated that, while the redevelopment of blighted and abandoned buildings is favorable, and Act 135’s purpose beneficial, the Philadelphia Zoning Code’s minimum variance requirement does not consider such characteristics.

Instead, according to the Supreme Court in Metal Green, there is nothing in the Philadelphia Zoning Code suggesting that the blighted or abandoned nature of a property should be a factor when considering whether the requested use “will represent the minimum variance that will afford relief and will represent the least modification possible of the use or dimensional regulation in issue.”

Lessons Learned

The Supreme Court’s ruling in Metal Green confirms that an applicant of a proposed use variance request in Philadelphia must meet the burden of establishing the minimum variance requirement.

Furthermore, the Supreme Court in Metal Green emphasized that the burden of proof under the minimum variance requirement should not be relaxed no matter the condition of the property, while acknowledging that the condition of the property could be utilized for the applicant to meet the burden of proof under the undue hardship requirement.

— Clementa Amazan, an associate at Nochumson P.C., is the co-author of this article.

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