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Lamar Advantage GP Co. v. Zoning Hearing Board of Adjustment of the City of Pittsburgh

June 23, 2010


The opinion of the court was delivered by: Judge Simpson

Argued: April 19, 2010



In this complex zoning appeal, Lamar Advantage GP Company (Lamar) asks whether the Zoning Board of Adjustment of the City of Pittsburgh (ZBA) erred in denying its requests to install two large advertising signs on a five-story public parking garage in the City of Pittsburgh. Before the ZBA, Lamar asserted it was entitled to install the signs pursuant to the doctrines of vested rights or equitable estoppel based on a previously issued sign permit that was later revoked with Lamar's consent. Alternatively, Lamar sought variances for the signs. With one of its members recusing, a two-member ZBA rendered a split decision, resulting in what the ZBA, and the Court of Common Pleas of Allegheny County (trial court) determined to be a denial of Lamar's requested relief. Lamar raises numerous procedural and substantive issues. Upon review, we affirm.

I. Background

The ZBA's findings may be summarized as follows. The property at issue is located at 55 11th Street, at the corner of Liberty Avenue and the terminus of Grant Street in the City of Pittsburgh (subject property). The subject property lies within a GT-B (Golden Triangle, Subdistrict B) Zoning District. The Pittsburgh Parking Authority (Authority) is the owner of the 3.58-acre subject property and has constructed a five-story public parking garage building, known as the Grant Street Transportation Center, on the site. The site is bisected by a railroad line with two trestles located on the subject property.

Lamar proposes to erect both a 1,098 square foot Light Emitting Diode (LED) advertising sign and a 1,082.5 square foot Electronic Message Sign (ticker sign) on the subject property. The estimated cost for each sign, as indicated on Lamar's applications, is $3,500,000.

In 2003, the Authority issued a request for proposal for designs for the parking garage to be constructed at the subject property. Ultimately, IKM Incorporated (IKM) was selected to provide architectural services for the project.

As part of its original proposal for the project, IKM envisioned a number of large LED signs around the building. However, through the design and value engineering processes, the sign concept was first limited to a video board on the cylindrical corner piece of the building and then eliminated from the design, apparently because the Authority could not justify the cost of that design component.

During the design process, the Authority did not consider or investigate the requirements of the City of Pittsburgh Zoning Code (Code) with respect to conceptual signs. The Pittsburgh Planning Commission approved a project development plan for the parking garage without an LED sign or a ticker sign.

IKM continued to promote the concept of a video board component to the design of the parking garage building and sought out parties that might be interested in financing it. Lamar was approached with the scheme of financing the LED sign and the ticker sign. In December 2007, Lamar entered into a license agreement with the Authority for the installation of the LED sign and the ticker sign. Although the ticker sign required a dimensional variance from the Code's size limitations, as well as a conditional use approval, Lamar did not apply for those approvals prior to entering into the license agreement.

Shortly before Lamar entered into the licensing agreement, the Zoning Administrator approved the LED sign as a "minor amendment" to the approval for the parking garage building and issued Sign Permit 07-08817, which indicated an estimated cost of the sign of $5,000.

After issuance of the sign permit, Lamar erected a temporary vinyl banner sign on the partially-constructed building on the subject property. The text of the banner advertised an exhibit at the Sports Museum that celebrated the Steelers' 75th season. The banner did not indicate it was intended as notice of the issuance of a permit for the LED sign. The banner remained in place for at least 30 days prior to when construction commenced on the LED sign.

In March 2008, within 30 days of when construction of the LED sign became apparent, Councilman Patrick Dowd filed a protest appeal contesting issuance of the sign permit. Shortly thereafter, several other members of city council also filed a protest appeal. Lamar responded by filing a civil action against the various city council members with the trial court.

In April 2008, Lamar, Councilman Dowd, and the City executed a Memorandum of Understanding. Pursuant to the Memorandum of Understanding, Lamar agreed the City would revoke the sign permit with the condition that Lamar would be permitted to appeal this revocation to the ZBA and would be permitted to file an application for a variance for the sign then under construction. Lamar agreed to abide by a stop work order and withdrew its civil action against the council members. Shortly thereafter, Lamar filed its applications for variances for the LED sign and the ticker sign.

II. ZBA Proceedings

A. Hearing

In September 2008, the ZBA, which is comprised of three members, held a hearing on both the revocation of Lamar's sign permit and its variance applications. At the commencement of the hearing, ZBA member David F. Toal, Esquire, recused himself from the proceeding based on a conflict of interest. Therefore, a two-member ZBA presided over this proceeding.

At hearing, several witnesses testified both on behalf of Lamar and in opposition to Lamar's requested relief.

With regard to its sign permit, Lamar presented evidence concerning its claim of a vested right in the issuance of the permit. As to its variance applications, Lamar presented evidence intended to meet the standards for variances under the Code and Pennsylvania law. A number of interested persons, including several members of city council, appeared to present their concerns regarding the proposed signs.

Lamar presented the testimony of John Schrott, the project architect for IKM, who described the history of the project design and the concept of the LED sign as a design element for the parking garage. Schrott acknowledged the sign regulations in the Code were not considered when the design was developed. Schrott also conceded that the City's Design Review Commission was not in favor of the video board component of the project. Nevertheless, Schrott opined that the designs would benefit the public because the LED sign could be used to announce public events and for broadcasts of local interest.

Lamar also presented testimony by Richard Glance, an architect and urban planner, who opined the sign would not negatively impact the public health, safety, and welfare. Glance opined the LED sign was an appropriate architectural feature for the building on the subject property because it was designed to be an integral part of the building and because it would provide a visual impact for a unique urban location. Glance described the view corridors of the LED sign and opined, among other things, the LED sign would not impact The Pennsylvanian, an historic building with multiple residential units, located across the street from the subject property. Glance also opined the height of the LED sign was necessary to fit the scale of the building and the size was necessary to make it fit within the architecture so it did not appear to be an afterthought. He also noted the ticker sign needed to start and stop at a logical place and needed to be constructed at the size proposed in order to be effective. Glance did not refer to the applicable provisions of the Code in his testimony.

David Onorato, the Authority's executive director, related the history of the project's design. He testified that both the LED and the ticker signs would serve as additional revenue sources for the Authority. Onorato noted that although the Authority was excited about the signs as design elements and amenities for the parking garage building, the Authority did not review the Code's requirements regarding signs. Rather, it relied on the architects for that information.

Susan Tymoczko, the City's zoning administrator, testified that she approved the application for the sign permit as a "minor amendment" to the approved project development plan for the building on the subject property based on her belief that it was in accordance with the City's regulations. She explained that she believed the City's administration reached an agreement with Lamar regarding the removal of six nonconforming advertising signs in exchange for approval of the LED sign.

In addition, Lamar presented the testimony of Stan Geier, its vice president and general manager in Pittsburgh. Geier testified that Lamar contacted various City officials regarding the LED sign and reached agreement for a "six-toone swap" of the six nonconforming signs for the one LED sign. Geier testified the City had a practice of allowing this type of swap, but he did not identify any documentary support or legal authority for the practice. Geier testified that, after issuance of the sign permit, Lamar erected the banner sign to serve as notice that an LED advertising sign was going to be installed. He conceded, however, that the temporary vinyl banner sign was not similar to the proposed LED sign. Geier also described the customized nature and costs of the LED sign. Geier testified Lamar spent $1.3 million on the sign to date, in unrecoverable costs, with additional costs of approximately $200,000 for workmen and consultants for the sign installation.

Also, Becky Rodgers, the executive director of Neighbors in the Strip, testified in support of the signs. She noted the existing Lamar signs near the subject property are eyesores and the LED and ticker signs would brighten up a blighted area.

In opposition to Lamar's appeal, Claire Meehan, a resident of The Pennsylvanian, presented a petition from 80 residents indicating opposition to the sign. She noted the signs would be visible at the primary entrance and exit of the building.

Donald Carter, also a resident of The Pennsylvanian and an architect, provided a copy of his letter to the editor of the Pittsburgh Post Gazette in which he described reasons for his opposition to the signs. Carter explained he was part of the developmental team that helped design the civic space at the intersection of Liberty Avenue and Grant Street, which is, in part, framed by the subject property. He noted there was an intent to preserve the vista down from Grant Street to the subject property, and the LED sign posed a negative impact. Carter also noted that the banner sign on the subject property during construction did not provide notice to the residents of The Pennsylvanian of an approval of any sign.

Greg Wimerskirch and Ann-Marie Lubenau, both architects, also testified in opposition to the sign. In addition, Dan Gilman, chief of staff to Councilman William Peduto, presented a letter on behalf of the councilman indicating his opposition to the proposed signs. Also, Douglas Shields, City Council President, appeared to oppose the LED sign and as an observer with respect to the ticker sign.

Bruce Kraus, a member of City Council, appeared as an observer and presented a number of documents, including an April 2008 letter from the City's solicitor regarding the "swap" agreement with Lamar. This letter stated that the Zoning Administrator acted appropriately in approving the application for the LED sign, but stated that "the practice of permitting by negotiations the approvals of LEDs in return for elimination of non-conforming billboards is not permitted by the Code, and the practice should cease prospectively." ZBA Op., Finding of Fact (F.F.) No. 53.

B. ZBA Decision

After hearing, the two-member ZBA issued a split decision. Specifically, ZBA member Alice B. Mitinger issued a 17-page opinion, consisting of findings of fact and conclusions of law, setting forth the grounds for denial of Lamar's challenge to the revocation of its sign permit and its variance requests. ZBA Chair Wrenna L. Watson issued a two-page decision in which she explained she would have granted Lamar's requested relief. Both ZBA members agreed the effect of their divided vote acted as a legal denial of Lamar's requested relief.

In her opinion, Mitinger determined Lamar's evidence did not support a grant of relief on grounds of vested rights or equitable estoppel. Specifically, Mitinger found, as a company with a long history in the City, Lamar knew or should have known of the Code's prohibition on advertising signs in the GT-B Districts. Mitinger also found that although Lamar presented testimony regarding the City's "past practices" of permitting "swaps" of non-conforming advertising signs for LED signs, it did not present any legal authority or written City policy or ordinance that would allow the relocation of nonconforming advertising signs on a different property. She further determined Lamar did not present any evidence addressing the Code's prohibition against advertising signs in the GT-B districts or the specific prohibition against relocating nonconforming advertising signs to a different location. Mitinger stated that, assuming Lamar was aware of the prohibition on advertising signs in the GT-B districts, its efforts to arrange a "swap" could only be viewed as an effort to circumvent the Code's prohibition against advertising signs in the GT-B districts. For these reasons, Mitinger determined Lamar did not exercise due diligence in attempting to comply with Code requirements. Further, Mitinger determined Lamar did not prove it acted in good faith in obtaining the sign permit. She also found the sign permit was not a valid permit and was properly revoked.

As to Lamar's variance requests for its LED and ticker signs, Mitinger determined Lamar did not present evidence of any unique conditions of the subject property that would result in unnecessary hardship absent the grant of the variances. Mitinger also found the variances sought would result in significant departures from Code requirements.

Ultimately, Mitinger concluded Lamar did not satisfy the requirements to establish a claim under the doctrine of vested rights as set forth in Petrosky v. Zoning Hearing Board of Upper Chichester Township, 485 Pa. 501, 402 A.2d 1385 (1979). In addition, Mitinger concluded Lamar did not meet the burden of proof on its equitable estoppel claim. Essentially, Mitinger determined Lamar's lack of good faith and due diligence precluded either form of equitable relief.

As to Lamar's variance request for its LED sign, Mitinger determined, because the Code prohibited advertising signs in the GT-B District, Lamar was required to prove it satisfied the requirements for a use variance. Mitinger determined Lamar could not meet this burden given that the Authority was already using the subject property in conformity with the Code's requirements, and Lamar did not show a unique condition of the subject property that would result in unnecessary hardship absent the grant of the variance.

As to Lamar's request for a dimensional variance for its ticker sign, Mitinger determined Lamar's proposed sign represented a 350% increase from the applicable Code requirements for electronic sign messages. Mitinger determined the only justifications Lamar offered for this substantial deviation were its self-serving opinion that the sign would benefit the community and its claim that income derived from the sign would benefit the Authority. Mitinger concluded these claims were insufficient to justify the grant of the requested dimensional variance.

In short, Mitinger rejected Lamar's vested rights and equitable estoppel claims and denied its requests for variances for its LED and ticker signs.

As noted, ZBA Chair Wrenna Watson voted to grant Lamar's requested relief. Watson issued a short opinion in which she expressed her belief that Lamar presented sufficient evidence to establish its claim of vested rights and/or equitable estoppel. Lamar appealed to the trial court.

III. Trial Court Decision

Without taking additional evidence, the trial court affirmed. Specifically, the trial court stated:

It is well established in this Commonwealth that a tie vote of a governmental body constitutes a negative decision rather than the absence of a decision.

Because Ms. Mitinger's decision was the prevailing decision, upholding the status quo, it is entitled to the same deference as any other majority decision and therefore the decision rendered by the [ZBA], including the findings of fact and conclusions of law, constitutes a decision required by Section 908(9) of [the Pennsylvania Municipalities Planning Code*fn1 (MPC)]. . Therefore, the standard of review to be employed by this Court is whether the [ZBA's] prevailing decision constituted an abuse of discretion or an error of law.

An extensive hearing was held before the [ZBA] on September 4, 2008, at which time Richard Glance, an Architect and Urban Planner who has extensive experience in urban restoration, testified as an expert witness as well as produced a number of exhibits on behalf of Lamar. In addition to Lamar, other parties were given the opportunity to present witnesses and evidence during this hearing.

The [ZBA] heard the witnesses and reviewed the exhibits. It is the duty of the [ZBA] in the exercise of its discretionary power to determine whether a party has met its burden. . . . Therefore, for the reasons stated above the prevailing decision of the [ZBA] is affirmed.

Tr. Ct., Slip Op., 6/24/09, at 2-3 (citations omitted). Lamar appealed to this Court.*fn2

IV. Issues

On appeal, Lamar raises seven assignments of error and asserts: the ZBA's tie vote required its sign permit to remain intact; the trial court erred in affirming the wrong proposed decision of the ZBA; the trial court improperly ruled on Lamar's appeal in violation of the trial court's own preliminary order and without affording Lamar due process; Lamar was entitled to modernize its sign pursuant to the doctrine of natural expansion of a nonconforming use; the ZBA misconstrued the holding of a prior decision by this Court; Lamar was entitled to retain its sign permit under the doctrine of vested rights and/or variance by estoppel; and, Lamar was entitled to variances for its LED and ticker signs.

V. Discussion

A. Effect of ZBA's Tie Vote

Citing Young v. Department of Environmental Resources, 600 A.2d 667 (Pa. Cmwlth. 1991), Lamar first asserts the ZBA, on a tie-vote, cannot revoke a sign permit. Lamar argues it filed a de novo appeal from the revocation of its sign permit by the Zoning Administrator. It contends the ZBA conducted a de novo evidentiary hearing, and then recorded a tie-vote on whether to revoke its sign permit. On a tie-vote, the ZBA could not revoke its sign permit. Lamar maintains that, based on the procedural posture of this case, the trial court erred in adopting Mitinger's proposed decision, which alters the status quo and revokes the sign permit on a tie-vote. See Giant Food Stores, Inc. v. Zoning Hearing Bd. of Whitehall Twp., 501 A.2d 353 (Pa. Cmwlth. 1985). Lamar contends the ...

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