        IN THE COMMONWEALTH COURT OF PENNSYLVANIA


4th & Bainbridge Associates and         :
Jason Winig,                            :
                        Appellants      :
                                        :
            v.                          :   No. 1069 C.D. 2019
                                        :   Argued: June 8, 2020
Zoning Board of Adjustment and          :
HR Bainbridge LP                        :


BEFORE: HONORABLE P. KEVIN BROBSON, Judge
        HONORABLE MICHAEL H. WOJCIK, Judge
        HONORABLE CHRISTINE FIZZANO CANNON, Judge


OPINION NOT REPORTED


MEMORANDUM OPINION
BY JUDGE BROBSON                        FILED: July 30, 2020


      4th & Bainbridge Associates and Jason Winig (Appellants) appeal from an
order of the Court of Common Pleas of Philadelphia County (common pleas), dated
June 19, 2019. Common pleas affirmed the decision of the Zoning Board of
Adjustment of the City of Philadelphia (Board), which granted the application of HR
Bainbridge LP (Owner) for dimensional variances. For the reasons discussed below,
we will reverse common pleas’ order.
      This matter concerns Owner’s property located in the City of Philadelphia
(City), which was formerly 10 contiguous parcels of real estate located at
413-431 Bainbridge Street and 629-631 East Passyunk Avenue (the Property). The
Property totals about two-thirds of an acre and is bounded on the north by other
properties and on the other three sides by Bainbridge Street, East Passyunk Avenue,
and Leithgow Street. Owner’s principals have owned a portion of the Property and
operated it as a 59-car public parking lot for many years.                     Owner acquired
the 10 contiguous parcels between 2015 and 2018, prepared and obtained City
approval of a lot consolidation plan, and, on May 18, 2018, executed a deed of
consolidation combining the parcels to form the Property. (See Reproduced Record
(R.R.) at 483a-89a.) Concurrently with that acquisition and consolidation, Owner
created a plan to develop the Property with a six-story,1 mixed-use building with
ground-floor retail space, 149 parking spaces on the second, third, and fourth floors,
and residential apartments on the remaining floors (the proposed use). The Property
is located in the City’s Community Commercial Mixed Use zoning district (CMX-3
district), which permits mixed-use buildings like the proposed use as of right.
See Section 14-402(c)(.4) of the Philadelphia Zoning Code (Code).
       On April 12, 2018, Owner filed an application for zoning and use approval
with the City’s Department of Licenses and Inspections (L&I), requesting a permit
to proceed with the proposed use. On April 21, 2018, L&I issued a notice of refusal
on the bases that the proposed use provided: (1) no setback of the building’s balcony
from the front lot line, whereas Section 14-604(5)(a) of the Philadelphia Zoning
Code (Code) requires a five-foot setback; (2) only 6% open space, whereas
Section 14-701(3) of the Code requires 20% open space; and (3) a floor area ratio
of 510%, whereas Section 14-701(3) of the Code allows a maximum floor area
ratio of 500%. (See R.R. at 500a.) On April 24, 2018, Owner filed an appeal of
L&I’s refusal with the Board. In the appeal, Owner sought variance relief based on


       1
          Owner’s proposed use initially called for seven stories, but Owner rearranged the building
into six stories at the request of the community. (R.R. at 28a.)

                                                 2
an alleged unnecessary hardship imposed by strict application of the Code to the
Property. Specifically, Owner requested dimensional variances from the three
provisions of the Code upon which L&I relied in issuing its refusal.
      On July 25, 2018, the Board held a hearing on the matter. Owner first
presented the testimony of Jerry Roller, the architect who prepared the plan for the
proposed use. He testified that, because the CMX-3 district has no height restriction,
Owner could have constructed up to a nine-story building as of right but chose to
construct the shorter building at the request of neighboring owners. (Id. at 29a.)
Concerning the open space requirement in particular, Mr. Roller opined that it
“really has no purpose in a mixed[-]use building like this.” (Id. at 31a.) He
explained that the ground-floor retail use requires all available square footage in
order to satisfy the intended retail tenant’s needs and that neither the retail tenant in
the building nor retail tenants on adjacent properties would have any use for open
space. (Id.) Mr. Roller then explained that, for the parking floors of the building “to
work in the narrow dimensions,” the plan could not accommodate the required open
space on those floors either. (Id. at 31a-32a.) He added, however, that the remaining
floors above the parking areas have about 35% open space. (Id. at 32a.) Finally, he
testified that Owner planned the proposed use to include 149 parking spaces to
satisfy the community’s desire for public parking on the Property. (Id. at 33a-34a.)
      Owner also presented the testimony of Dennis Glackin, a land planner
retained by Owner to prepare a report on the need for the requested dimensional
variances. Mr. Glackin testified that, in his opinion, the variances requested were
de minimis and represented the minimum variances that would allow Owner to
provide the parking area requested by community members. (Id. at 35a.) He also
opined that the proposed use matches the character of the surrounding neighborhood


                                           3
and would have no detrimental effect on the community. (Id. at 36a.) In addition to
his testimony, Mr. Glackin prepared a memorandum concerning the requested
variance relief, which was entered into the record before the Board.               In the
memorandum, Mr. Glackin stated that the Property is oddly shaped, which “makes
efficient use of the ground floor critical in achieving a workable retail footprint.”
(Id. at 474a.) Specifically, he stated that, “[w]ithout the [o]pen [s]pace variance . . . ,
the first-floor space would become drastically compromised,” and that altering the
design to meet the open space requirement would “make . . . obtaining a major retail
tenant unlikely.” (Id. at 475a, 478a.) He also stated that the open space variance is
the minimum variance that would make the retail space “practical and useable for a
major tenant to occupy.” (Id. at 476a.)
       Several community members testified in opposition to the proposed use,
expressing objection to the project’s size, concerns about traffic and noise, and a
concern that the proposed use—including the presence of a national retail tenant—
would alter the neighborhood’s character. In particular, Catherine Ciric testified that
Target—the intended retail tenant for the ground floor space—currently operates a
store elsewhere in the City that is smaller than the size proposed by Owner. (Id.
at 58a.) Based on this, she opined that the variance from the open space requirement
is not necessary to make the retail component of the proposed use viable. (Id.) In
addition to the testimony of individual neighbors in opposition, a representative from
a local registered community organization appeared at the hearing and testified in
support, noting the organization’s view that the requested variances are “relatively
de minimis” and that the proposed use is an “overall positive investment” in the area.
(Id. at 77a-78a.) Appellants did not offer any testimony at the hearing.




                                            4
      Immediately after the hearing, the Board voted unanimously to grant Owner’s
appeal and the requested variance relief. In its written decision, the Board made
factual findings in the nature of a summary of the testimony offered at the hearing
and other evidence in the record before the Board. The Board then made the
following relevant conclusions of law:
            1.     The proposed development requires [a] dimensional
                   variance[] for open area . . . .
            ....
            8.     The Board concludes [Owner] here established
                   entitlement to the requested dimensional variance[].
            ....
            10. The location and size of the [Property] are not
                self-created by [Owner]. These unique physical
                characteristics of the Property render it appropriate
                for a large-scale development project such as
                [Owner’s]. Requiring significant change or total
                revision of the project poses an unnecessary hardship
                to [Owner], even if only economic hardship . . . .
            11. Given the appropriately large scale of [Owner’s]
                proposal to redevelop the Property, the Board
                concludes the requested dimensional variances are
                the minimum necessary to afford relief.
            12. With respect to the dimensional variance requested to
                fall below minimum open area percentage, the Board
                notes the retail footprint of the proposed structure
                justifies a de minimis variation from the Code’s
                requirement to a reduced percentage. The mixed-use
                nature of the building dictates more dense usage on
                the ground floors for retail, where open area might
                appear otherwise. Open area requirements are met at
                the higher residential stories of the structure.
            13. The Board also notes that [Owner’s] planned parking
                at the structure contributed to the need for an open
                area variance, and the resulting public garage will
                benefit area neighbors and businesses alike.


                                          5
(Board’s decision at 5-7.) Appellants appealed to common pleas, which affirmed
the Board’s determination.
       On appeal,2 Appellants contend that the Board abused its discretion in
granting the open space variance.3 They first argue that the Board’s finding of
unnecessary hardship was not supported by substantial evidence. In support of this,
Appellants claim that Owner essentially admitted that no hardship exists and that
Owner produced only vague, conclusory statements—rather than concrete,
nonspeculative evidence—of unnecessary hardship.                 In making this argument,
Appellants emphasize that the existing parking lot use and a building with 20% open
space are economically viable uses of the Property. Second, Appellants argue that
there was not substantial evidence to support the Board’s finding that the requested
variance was the minimum variance necessary to afford relief. Lastly, Appellants
essentially claim that Owner itself created any unnecessary hardship with respect to
the Property and that, accordingly, the Board erred in granting the requested
variance.
       In response, Owner argues that the Board’s findings and conclusions were
supported by substantial evidence. Specifically, Owner contends that it provided
sufficient evidence to show unnecessary hardship under the relaxed standard of
proof applicable to dimensional variances. Owner emphasizes that it was not legally

       2
          “Where a trial court takes no additional evidence in an appeal from a decision of the
Board, this Court is limited to considering whether the Board erred as a matter of law or abused
its discretion.” German v. Zoning Bd. of Adjustment, 41 A.3d 947, 949 n.1 (Pa. Cmwlth. 2012).
       3
          According to common pleas, Appellants represented that they are not challenging most
of the variances requested, including the floor area ratio going to 510% and the setback. (Common
pleas’ opinion at 2 n.1.) This is consistent with Appellants’ arguments before common pleas and
this Court, where they specifically mention and develop argument only with respect to the 20%
open space requirement and the variance therefor. (R.R. at 501a-20a; Appellants’ Br. at 4-23.)


                                               6
required to show that other uses are completely unprofitable in order to demonstrate
the requisite hardship. Owner next argues that it provided substantial evidence that
the requested variance was the least necessary to afford relief. Finally, Owner insists
that the Property’s unnecessary hardship results not from Owner’s actions but from
the unique character of the Property.4
       A variance is a departure from the exact provisions of a zoning ordinance.
Brennen v. Zoning Bd. of Adjustment of the City of Connellsville, 187 A.2d 180, 182
(Pa. 1963).5 The party seeking the variance must show substantial, serious, and
compelling reasons for the variance request, including “that unnecessary hardship
will result if the variance is denied.” Singer v. Phila. Zoning Bd. of Adjustment,
29 A.3d 144, 148-49 (Pa. Cmwlth. 2011). “The hardship must be unique to the
property at issue, not a hardship arising from the impact of the zoning regulations on
the entire district.” Marshall v. City of Phila., 97 A.3d 323, 329 (Pa. 2014). An
applicant “is not required to show that the property at issue is valueless without the
variance or that the property cannot be used for any permitted purpose.” Id. at 330
(emphasis omitted). Mere economic hardship, however, “will not of itself justify a
grant of a variance.” Id. (quoting Wilson v. Plumstead Twp. Zoning Hearing Bd.,
936 A.2d 1061, 1069 (Pa. 2007)). In other words, “[m]ere hardship is not sufficient;


       4
         Owner also argued in its brief to this Court and before common pleas that Appellants lack
standing to appeal the Board’s decision. At oral argument on June 8, 2020, however, Owner
expressly waived its standing argument. Accordingly, we will not address the issue of standing in
this opinion.
       5
         This and some other authorities cited in this opinion address variances as governed by the
Pennsylvania Municipalities Planning Code, Act of July 31, 1968, P.L. 805, as amended,
53 P.S. §§ 10101-11202 (MPC). Though the MPC does not apply to the City of Philadelphia,
which is instead governed by the Code, we cite relevant precedent from the MPC context where
there are no important differences between the provisions of the MPC and the Code. See In re
Chestnut Hill Cmty. Ass’n, 155 A.3d 658, 663 n.5 (Pa. Cmwlth. 2017).
                                                7
there must be unnecessary hardship.” Chestnut Hill, 155 A.3d at 668 (emphasis in
original) (quoting Pincus v. Power, 101 A.2d 914, 916 (Pa. 1954)).
      When an applicant seeks a dimensional variance, as opposed to a use variance,
the application is subject to a relaxed hardship standard requiring a lesser quantum
of proof. Under this relaxed standard articulated by the Pennsylvania Supreme
Court, we determine whether the applicant has demonstrated unnecessary hardship
by considering “multiple factors, including 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 zoning requirements[,] and the
characteristics of the surrounding neighborhood.” Hertzberg v. Zoning Bd. of
Adjustment of the City of Pittsburgh, 721 A.2d 43, 50 (Pa. 1998). Under those
considerations, however, “the property, not the person, [must be] subject to
hardship.” Yeager v. Zoning Hearing Bd. of the City of Allentown, 779 A.2d 595,
598 (Pa. Cmwlth. 2001) (quoting Szmigiel v. Kranker, 298 A.2d 629, 631 (Pa.
Cmwlth. 1972) (en banc)) (emphasis in original). In other words, a conflict between
dimensional zoning requirements and a landowner’s preference for a certain layout
does not, on its own, create a hardship meriting a variance under Hertzberg. Id.
at 598.
      “When an applicant seeks a variance for a property located in Philadelphia,
the Board must also consider the factors set forth in the [Code].”
Singer, 29 A.3d at 148. Section 14-303(8)(e)(.3) of the Code sets forth the factors
the Board may consider in finding unnecessary hardship in the case of a dimensional
variance.   It recites, essentially verbatim, the factors from Hertzberg—“the
economic detriment to the applicant if the variance is denied, the financial burden
created by any work necessary to bring the building into strict compliance with the


                                         8
zoning requirements[,] and the characteristics of the surrounding neighborhood.”
Section 14-303(8)(e)(.3) of the Code. Accordingly, the standard for showing an
unnecessary hardship in the case of a dimensional variance is substantially identical
under Hertzberg and the Code.
      Owner’s testimony before the Board regarding the alleged unnecessary
hardship consists of several statements. These include the assertions that the
ground-floor retail space requires as much square footage as possible, that the
parking areas will only “work” with maximum square footage, that reducing the size
of the ground floor space would “drastically compromise[]” it, and that altering the
design to meet the open space requirement would “make . . . obtaining a major retail
tenant unlikely.” (R.R. at 31a, 457a, 478a.) At most, this testimony establishes that
compliance with the Code’s open space provision—which would entail reducing the
size of the building—would prevent Owner from designing and using the building
as it prefers, with its preferred retail tenant. None of the testimony explains, other
than in a conclusory fashion, why compliance would adversely affect Owner’s
economic interests or the character of the surrounding community. Instead, Owner
made a series of unsupported assertions that a building in compliance with the Code,
which Owner could build as of right, simply will not work. Although, under both
Hertzberg and the Code, we can consider the economic impact of the requested
variance on Owner, Owner provided no specific, concrete evidence of the extent of
that impact—i.e., no testimony about how much of an economic impact a
Code-compliant building would have on Owner’s plans.
      Owner repeatedly claims that it was not legally required to show that its
proposed retail tenant would not accept a smaller plan that complied with the Code.
(See Owner’s Br. at 26 n.10, 30.) It also emphasizes that it need not show that the


                                          9
Property’s current use (as a parking lot) is unworkable. (See id. at 28.) Both of those
arguments miss the mark. Although Owner need not demonstrate that the Property
is valueless without the variance, it must show that compliance with the Code would
impose an unnecessary hardship. Owner’s preference for a larger building than the
Code allows does not constitute such a hardship. Owner has not provided substantial
evidence of an unnecessary hardship beyond disturbance of its preferred
development plan.     The conclusory statements Owner offered are simply not
sufficient to meet its burden of demonstrating that the variance is required to remedy
an unnecessary hardship, even under the relaxed standard of proof applicable to the
dimensional variance at issue.
      Indeed, it appears that Owner is seeking the open space variance for another
purpose, at least in significant part—to allow a larger number of public parking
spaces on the Property in order to make the proposed use more acceptable to the
community. This is borne out in the email sent by Owner’s affiliated developer,
Michael Gorman, who admitted that “the by-right plan would yield no public
parking—only enough to support the building’s tenants . . . .” (R.R. at 471a.)
Testimony before the Board confirms this, with Owner’s witnesses explaining that
the requested variance is necessary to support the 149 parking spaces that Owner
desires and was requested “based on . . . providing parking for the neighborhood.”
(Id. at 35a.) While Owner’s significant community outreach in connection with this
project is admirable, the prospect of community opposition is not an unnecessary
hardship that justifies the grant of a variance to allow Owner to make the proposed
use more palatable. Nor has Owner taken the position that its contemplation of
additional parking is related to its own economic interests or the “characteristics of
the surrounding neighborhood” under Hertzberg and the Code.              Accordingly,


                                          10
Owner’s perceived need for additional parking does not constitute the requisite
hardship.
       For these reasons, we hold that Owner did not produce substantial evidence
of an unnecessary hardship, which is required to support the grant of the open space
variance. The Board, therefore, abused its discretion in granting the variance, and
common pleas erred in affirming the Board’s decision.6 Accordingly, we will
reverse the decision of common pleas.




                                              P. KEVIN BROBSON, Judge




       6
         Given this conclusion, we need not address Appellants’ remaining arguments on appeal.
We note in passing, however, that if we were to address Appellants’ next issue—whether Owner
showed that the open space variance is the minimum variance that would afford relief—we would
reach the same result for substantially the same reasons. As with hardship, Owner provided only
conclusory statements that its request meets the minimum variance standard, without any
explanation of why a smaller variance would not be adequate.

                                              11
       IN THE COMMONWEALTH COURT OF PENNSYLVANIA


4th & Bainbridge Associates and       :
Jason Winig,                          :
                        Appellants    :
                                      :
            v.                        :   No. 1069 C.D. 2019
                                      :
Zoning Board of Adjustment and        :
HR Bainbridge LP                      :



                                 ORDER


      AND NOW, this 30th day of July, 2020, the order of the Court of Common
Pleas of Philadelphia County, dated June 19, 2019, is REVERSED.




                                      P. KEVIN BROBSON, Judge
