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Demko v. City of Pittsburgh Zoning Board of Adjustment

Commonwealth Court of Pennsylvania

March 7, 2017

David Demko, an individual, and Stephen Pascal, an individual
v.
City of Pittsburgh Zoning Board of Adjustment, and Trek Development Group, Inc.
v.
The Urban Redevelopment Authority of Pittsburgh, and City of Pittsburgh Appeal of: Trek Development Group, Inc., The Urban Redevelopment Authority of Pittsburgh and the City of Pittsburgh

          ARGUED: November 15, 2016

          BEFORE: HONORABLE ANNE E. COVEY, Judge, HONORABLE JULIA K. HEARTHWAY, Judge HONORABLE DAN PELLEGRINI, Senior Judge

          OPINION

          JULIA K. HEARTHWAY, Judge

         Trek Development Group, Inc. (Trek), The Urban Redevelopment Authority of Pittsburgh (URA), and the City of Pittsburgh (City) (collectively, Appellants)[1] appeal from the March 23, 2016, order of the Court of Common Pleas of Allegheny County (Trial Court), which reversed the decision of the City's Zoning Board of Adjustment (Board) granting Trek's variances and special exception. In particular, Trek's variance application sought to vary (i) the floor area ratio requirement from 2:1 to 4.8:1 and (ii) the height requirement from 45 feet / 3 stories to 97 feet / 8 stories (collectively, Variances) in order to develop a deteriorating property that has been vacant for a number of years. Trek's special exception request sought to provide offsite parking for the proposed structure (Special Exception). We affirm.

         The subject property consists of several parcels located at the corner of West North Avenue and Federal Street in the Central Northside Neighborhood of the City. The parcels are identified as 2, 4, 6 and 8 West North Avenue (West North Avenue Properties) and 1131, 1133 and 1135 Federal Street (Federal Street Properties) (collectively, Property). The Property is located in a Local

         Neighborhood Commercial (LNC) District in the City.[2] (Board's Findings of Fact (F.F.) No. 1.)

         The West North Avenue Properties are part of what has been known as the "Garden Theater Block." The West North Avenue Properties contain three buildings that have been unoccupied for a number of years and are in deteriorating condition. The façades of the three structures on the West North Avenue Properties remain generally intact, with heights of 67 ft., 38 ft., and 50 ft., and are part of the area's history and character. The Federal Street Properties contain two, two-story brick structures in deteriorating condition. (F.F. Nos. 2-3, 6.)

         URA owns the Property. URA initiated redevelopment of the Property by issuing a request for proposal (RFP) in 2007, and again in 2011 and 2014. Each RFP included the requirement that the existing buildings on the West North Avenue Properties (Existing Buildings) be preserved, rehabilitated and incorporated into the proposed development project.[3] Proposed projects were selected from the 2007 and 2011 RFPs but final development was not accomplished. Thus, URA issued the 2014 RFP, from which URA selected Trek's proposal. (F.F. Nos. 4, 7-8.)

         Trek proposes to preserve and rehabilitate the Existing Buildings and to incorporate them into an 8-story, 97-foot mixed-use building, that would occupy both the West North Avenue Properties and the Federal Street Properties. The new building would consist of retail uses on the ground floor, and up to 72 residential units on the upper stories (Project). (F.F. Nos. 9-10.)

          In order to develop the Property as proposed, Trek needs the Variances and Special Exception. On August 6, 2015, the Board held a hearing on Trek's application for the Variances and Special Exception.

         At the hearing, Trek presented the testimony of Kyra Straussman (Straussman), URA's Director. She described the process of URA's acquisition of the Property and the prior RFP processes, all of which included retaining the Existing Buildings. (F.F. No. 23; R.R. at 79a-80a, 83a-84a.) She explained that the Existing Buildings are in poor condition. (R.R. at 80a-81a.) She stated that it was URA's policy to try to preserve the Existing Buildings, and that if a future RFP was necessary, it would also require that the Existing Buildings be preserved. (F.F. No. 23; R.R. at 79a-80a; see R.R. at 84a-85a.)

         Trek also presented the testimony of William Gatti (Gatti), Trek's founder and President. (R.R. at 94a.) Gatti testified concerning three development options Trek considered based on URA's requirement that the existing buildings be maintained: (i) renovation of the Existing Buildings; (ii) incorporation of new buildings along with the Existing Buildings in compliance with the dimensional requirements of the Zoning Code of the City of Pittsburgh, Pennsylvania (Zoning Code); and (iii) the proposed Project. (F.F. No. 26, R.R. at 94a-103a, 204a.) Gatti explained that for the development to be financially viable, Trek would need to produce enough rental units to support the cost, and that only the third option, i.e., the Project, which requires the Variances at issue, was viable.[4] (See F.F. Nos. 15, 26-27; R.R. at 98a-99a, 103a.)

         Trek also presented the testimony of Dirk Taylor (Taylor), a structural engineer who assessed the structural condition of the Existing Buildings. (F.F. No. 24.) Taylor testified that the Existing Buildings would require significant and costly structural work to meet building code requirements. (F.F. No. 24.) Taylor testified that incorporating the Existing Buildings substantially increases the cost of the Project. (R.R. at 93a.) Indeed, when questioned about the difference in cost between building on the vacant site versus building on the site where these structures are in place, Taylor estimated that the restoration project would at least double the cost. (R.R. at 92a-93a; see F.F. No. 24.) Additionally, when asked what his recommendation would be for these buildings in a typical situation absent URA's requirement, Taylor stated it would be far less expensive to demolish them to rebuild similar construction. (R.R. at 91a.)

         Trek also presented the testimony of Ken Doyno, the architect for the Project. He stated it would not be possible to build the same number of units on the Property in a smaller building or one with a lower floor area ratio. (F.F. No. 29.)

         There was testimony from area residents and community groups both in support of and in opposition to the Project. (F.F. Nos. 31-37.) Councilwoman Darlene Harris testified in opposition to the Project. (F.F. No. 35.)

         On October 8, 2015, the Board issued its decision granting Trek's Variances and Special Exception. In its decision, the Board concluded that the historic Existing Buildings constitute a unique condition of the Property and that they should be preserved, and that the unique circumstances result in an unnecessary hardship justifying the requested dimensional Variances. (Board's Conclusions of Law (C.L.) No. 8.) The Board further concluded the Variances would allow for additional residential units and that those units are intended to provide sufficient revenue to justify the development costs and are not merely for the highest financial gain. (C.L. No. 7.) The Board also concluded that any detrimental impact from the additional height and floor area ratio is outweighed by the benefits anticipated from the redevelopment of the Property. (C.L. No. 9.)

         David Demko (Demko) and Stephen Pascal (Pascal)[5] filed separate appeals from the Board's decision with the Trial Court, and the Trial Court consolidated those appeals.[6] (R.R. at 57a.) The Trial Court, without taking any additional evidence, reversed the Board's decision with respect to both the Variances and the Special Exception.

         Concerning the Variances, the Trial Court ruled that Trek failed to prove that there are unique physical circumstances on the Property which cause unnecessary hardship because Trek's reasons for the unique physical circumstances mainly concern financial hardship. The Trial Court pointed to Gatti's testimony that, for the Project to be financially viable, Trek would need to produce enough rental units to support the cost of the Project. The Trial Court also concluded that the requirement to maintain the façades was a self-imposed condition created by URA. (Trial Court opinion at 5.) The Trial Court stated that if the buildings were demolished, the Property could easily be developed in conformity with the Zoning Code. The Trial Court also concluded that the Variances are not the least modification necessary to develop the Property.

         Appellants now appeal to this Court from the Trial Court's order.[7]Before this Court, Appellants argue that: (i) the Trial Court disregarded the substantial evidence supporting the Board's findings and impermissibly substituted its own findings; (ii) the Board properly considered the Existing Buildings to be a unique condition of the Property and that the preservation of the Existing Buildings warrants the grant of the dimensional Variances; and (iii) the Board properly granted the Special Exception. In particular, Appellants argue that the Board's finding that preservation of the Existing Buildings creates an unnecessary hardship is supported by substantial evidence. They maintain that the Trial Court erred as a matter of law in considering the factors for a dimensional variance, particularly where URA claims it was following its statutory mandate to preserve the existing buildings. They argue the Board's findings must be afforded deference, particularly with respect to a finding of hardship, given the Board's ...


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