What is Spot Zoning and Why is it Illegal and Why is Councilman Jones' Ordianance Spot Zoning

Dear Councilwoman Verna:

On June 18, 1997, you sent a letter via fax to Deputy City Solicitor Evan Meyer, requesting an opinion concerning Bill No. 970234 (the "Bill"), then on Council's second reading and final passage calendar. The Bill would change the zoning of a City block (Delancey to Panama and 25th to 26th Streets) (the "Property") from "RC-3 Residential" to "R-10 Residential." In particular, you asked whether the Bill would constitute "spot zoning," and whether the Bill, if enacted, would affect the validity of a zoning and use permit which had already been issued for the Property.

On June 19, 1997, Deputy City Solicitor Meyer responded to your request. His letter recited his understanding that the Bill would simply bring the zoning of the Property into conformity with the surrounding areas, as well as his understanding that the Bill had been prepared by the City Planning Commission. Mr. Meyer understood that to mean that the Planning Commission had reviewed and approved the Bill. Based on those understandings, Mr. Meyer concluded that the Bill would not constitute "spot zoning." He also concluded that the Bill would not affect the permit that had already been issued.

As you know, Council passed Bill No. 970234 on June 19, 1997, and the Bill is now before the Mayor for his approval or disapproval. In connection with the Mayor's review of the Bill, I have had occasion to reexamine the factual context of the Bill, and the "spot zoning" and "pending ordinance" issues it raises. Based upon this reexamination, as well as consideration of additional facts, while I cannot conclude with any certainty that a court would invalidate the Bill, it is my belief that there is support for the conclusion that the Bill, if it becomes law, would constitute illegal "spot zoning," since it singles out property owned by a single owner for special treatment to his economic detriment. Since this conclusion differs from this Office's previous advice to you that the Bill would not constitute "spot zoning," I wanted to advise you of this revision to our advice. Please note, however, that I agree with the prior advice that, regardless of the validity of the Bill, it would not prevent the owner of the Property from going forward with his development because he validly obtained a zoning and use permit before the bill was reported out of City Council committee.

The remainder of this letter will detail those conclusions. I will first review the background facts, and then will consider both the effect of the Bill, if enacted, on the planned development of the Property as well as the validity of the Bill.

FACTS

By way of background, all the parcels along the Schuylkill waterfront in Center City and other parcels near the waterfront, including the Property, were zoned "G-2" General Industrial until a 1975 community-wide zoning remapping changed the zoning in the area. The boundaries of the remapping were Walnut Street on the north, Broad Street on the east, South Street on the south and the Schuylkill River on the west (see map attached). The remapping was done in cooperation with the Center City Residents Association, and was a community sponsored and endorsed area rezoning. The subject Property, which occupies an entire block with an existing industrial building, was rezoned from "G-2" General Industrial to "RC-3" Residential because of the character of the Property. It differed in this respect from the R-10 and R-10A Residential zoning of the two and three-story row dwellings in the area. It was recognized that the existing industrial building on the Property would probably be rehabilitated or modified in the future. The residential classification was placed on it to ensure that any future use would be residential and not industrial or commercial (May 28, 1997 City Council transcript ("Council tr.") at pg. 18).

Since 1975, the Property was occupied by a tenant (PNC Bank) and used as a change vault where change was sorted and sent back to branch banks (Council tr. at pg. 19). That occupancy ended approximately one or two years ago and the Property has been available since that time for reuse. The Korman family has owned the Property since the early 1960's (Council tr. at pg. 38) and has proposed converting the Property to upscale condominiums/rental units (Council tr. at pg. 40-41). The plan is to add an addition to the existing building to make it four stories high, to have a parking garage on the first floor and 40 units on the upper two floors. The proposed height of the building is 52 feet. The addition and height of the development is necessary because the parcel is located in a flood plain and no residential units can be placed on the first floor (Council tr. at pgs. 16-17, 45). All of the proposed development plans are in conformity with the current "RC-3" zoning for the property. (Council tr. at pg. 16-18, 20-21).

The community has objected to the proposed development as out of scale with the primarily two and three-story single homes in the area. Councilwoman Verna introduced the Bill seeking to change the zoning of the Property from "RC-3" to "R-10" Residential which would impose a 35 foot height restriction on the parcel (or 3 stories) where there currently is no height restriction under the existing RC-3 zoning. There was testimony that R-10 zoning with the resultant height restriction would make any development of the Property economically unfeasible. This is particularly so because this parcel is located entirely in the flood plain of the Schuylkill River. The City Planning Commission recommended against the Bill for these very reasons (Council tr. at pg. 18).

ANALYSIS

Effect of the Bill, if Enacted, on the Planning Development

It is important to note at the outset that the Bill, if enacted into law, will have no practical effect on the current development of the Property.

It is my understanding that the owner of the Property applied for a zoning and use permit on May 21, 1997. The permit was issued by the Department of Licenses and Inspections ("the Department") on May 28, 1997, prior to the Bill being reported out of committee later that day. The zoning permit was granted "over-the counter" because the proposed development plan is consistent with the current RC-3 zoning of the area (Council tr. at pg. 49-50). Under the "pending ordinance doctrine," the Department may give effect to pending legislation, prior to its passage, and refuse permits that are applied for after the bill is "pending."[1] Opinion No. 88-5, 1988-1989 City Solicitor's Opinions, 8, 11. It is my understanding, as stated in Opinion No. 88-5, that the Department's current policy is to apply the date the bill is reported out of committee in determining whether a bill is "pending." Thus, since the owner applied for the zoning and use permit seven days before this Bill was reported out of committee, his permit will be valid under the former zoning, whether or not the Bill is enacted and valid.

While a building permit has not yet been issued, that fact is irrelevant to the issues raised in this opinion. The crucial permit for the purposes of the pending ordinance doctrine is the zoning and use permit. The zoning permit is a prerequisite to obtaining building permits. Once an owner has obtained the zoning permit, the issuance of the building permit is effectively automatic. With a valid zoning permit, the owner will be granted any necessary building permits for the proposed development because the Bill will have prospective and not retroactive effect. Therefore, even if the Bill is legally effective in changing the zoning of the block to R-10, it will have prospective effect only and will not prevent the owner from proceeding with his planned construction under the zoning and use permit issued based on RC-3 zoning.[2]

Validity of the Bill

Summary

The legal issue raised by the Bill is whether it constitutes illegal "spot zoning." The Pennsylvania Supreme Court has defined "spot zoning" as "a singling out of one lot or a small area for different treatment from that accorded to similar surrounding land indistinguishable from it in character, for the economic benefit [or detriment] of the owner." See Sharp v. Zoning Hearing Bd. of Radnor, 157 Pa. Commw. 50, 60, 628 A.2d 1223 (1993) (quoting Mulac Appeal, 418 Pa. 207, 210, 210 A.2d 275, 277 (1965)). However, applying that definition is not an easy task. The Court has noted that "[t]here is no precise formula" for deciding whether an ordinance constitutes "spot zoning," and the question depends heavily on the facts. Id.

It is clear, however, that a zoning ordinance is presumed to be valid, and a challenger asserting "spot zoning" has a heavy burden to overcome that presumption of validity. For that reason, and as explained below, I cannot conclude with any certainty that a court would invalidate the Bill as discriminatory spot zoning. However, I must advise you that it is very possible that a court would so rule.[3]

Standard

The Pennsylvania Supreme Court has noted that "[i]t is difficult to define 'spot' zoning." Cleaver v. Bd. of Adjustment, 414 Pa. 367. 378, 200 A.2d 408 (1975). The most recent complete recitation of the applicable spot zoning standard is that expressed in Sharp v. Zoning Hearing Bd. of Radnor, 157 Pa. Commw. 50, 60, 628 A.2d 1223 (1993):

A zoning ordinance is presumed to be valid and constitutional, and the challenging party has the heavy burden of proving otherwise. . . . Before a court may declare an ordinance unconstitutional, the challenging party must clearly establish that, in this instance, the rezoning represents discriminatory spot zoning and is therefore unconstitutional, and if the validity is debatable, the legislative judgment is allowed to control. . . . Spot zoning has been defined as "a singling out of one lot or a small area for different treatment from that accorded to similar surrounding land indistinguishable from it in character, for the economic benefit of the owner of that lot or to his economic detriment. . ."[citation omitted] There is no precise formula for determining whether a classification of property constitutes spot zoning, and cases should de decided on the facts guided by case law. The size of the property is only one determining factor. The topography, location and characteristics of the land are also among the factors to be considered. The most important factor, however, is whether the rezoned land is being treated unjustifiably different from similar surrounding land, thereby creating an "island" having no relevant differences from its neighboring property. The Court must also consider the effect of rezoning on public health, safety, morals and general welfare; and the relationship of rezoning to the comprehensive plan.

Sharp, 157 Pa, Commw. at -61 (citations omitted).

The Role of the Planning Commission

As noted above, "the relationship of rezoning to the comprehensive plan" is an important consideration in evaluating whether legislation is impermissible spot zoning. The Philadelphia Home Rule Charter (the "Charter") provides for a comprehensive plan known as the Physical Development Plan of the City, and for the Planning Commission to make recommendations to Council when Council considers any zoning Ordinance. See Charter Sections 2-307 and 4-604. However, the annotations to these sections make it clear that the recommendations of the Commission are not binding on Council. The Charter requirements are essentially consistent with those of the Zoning Enabling Act, 53 P.S. งง14752-14762. See Com., Dept. of Gen. Serv. v. Ogontz Area, 505 Pa. 614, 483 A.2d 448 (1984); Bartle v. Zoning Bd. of Adjustment, 10 Pa. D & C 613, aff'd 391 Pa. 207, 137 A.2d 239 (1958); Pollock v. Zoning Board of Adjustment, 20 Pa. Commw. 641, 644, 342 A.2d 815 (1975).

Nevertheless, the absence of a recommendation from the City Planning Commission may be evidence that a piece of legislation is not in accordance with a comprehensive plan. In fact, the Planning Commission testified against the Bill at the hearing on May 28. The Commission testified that the staff's recommendation had been to disapprove the Bill, and testified that the Commission had voted against approval of the Bill.

"Island" of Dissimilar Zoning

I have reviewed the zoning map of the area, and although the adjoining blocks on the south and east of the parcel in question (and a number of other blocks to the south and east of those) are zoned R-10A, the area on the west is park land, as is the area on the north, beyond which the land is zoned RC-4. At the May 28 hearing there was testimony as to the facts as set forth above. Of particular note, there was testimony that R-10 zoning would make any development of the Property economically unfeasible, since the Property is located in the flood plain of the Schuylkill River and therefore residential units are prohibited on the ground floor. See Philadelphia Code Section 14-1606. The Planning Commission also testified that, generally, both the Planning Commission and Zoning Board allow buildings on properties located in the flood plain to be built higher than the applicable zoning allows to compensate for flood plain requirements. The proposed zoning change, to R-10, under Bill No. 970234 would subject the Property to a 35 foot height restriction where none currently exists under the applicable RC-3 zoning.

In determining whether "spot zoning" is present, the courts have held that "[t]he most important factor . . . is whether the rezoned land is being treated unjustifiably different from similar surrounding land, thereby creating an 'island' having no relevant differences from its neighboring property." In the instant case, where the preponderance of parcels in the immediate vicinity are zoned R-10A and the parcel in question is to be re-zoned from RC-3 to R-10, it may appear that, on its face, the Bill merely converts the zoning to the predominate classification in the area, rather than creates an "island" of dissimilar zoning. One could argue on this basis that the Bill is not impermissible "spot zoning."

However, our courts have stated that the topography, location and characteristics of the land must be considered in determining whether a classification of property constitutes spot zoning, which logically should include its location within the flood plain. See, e.g., Sharp v. Zoning Hearing Bd. of Radnor, 157 Pa. Commw. 50, 60, 628 A.2d 1223 (1993). As the hearing testimony makes clear, even though the Property, under the Bill, would bear the same zoning classification as parcels on two sides,[4] the practical effect will be to treat the owner of the Property differently from all other owners of residential property in the area. The majority of such properties lie outside the flood plain. Even those few blocks within the flood plain, because they enjoy the benefit of prior nonconforming uses, can make use of their first floors as residential living space, and maintain up to three-story structures entirely devoted to useable residential space. The Property, which has not previously been used for residential purposes, enjoys no such nonconformity. If the owner of the Property is deprived of both the ability to put residential space on the first floor and the right to compensate for that limitation by using the vertical space above the Property beyond the 35 foot limit, he will be severely harmed economically in a way no other neighbor subject to R-10 zoning is affected. The Bill, rather than bring the Property into conformity with its surrounding residential neighbors, would, under this analysis, make of the Property the "island of dissimilar zoning" disfavored by the courts.

If one looks not merely at the distribution of R-10 zoned blocks on the map, but instead at the entire zoning context and the impact of the bill on the Property, a persuasive argument can be made that the Bill would effect "spot zoning." In Baker v. Chartiers Twp. Zoning Hrg. Bd., 677 A.2d 1274 (Pa. Commw. 1996), the Commonwealth Court noted that:

The key point is when a municipal governing body puts on blinders and confines its vision to just one isolated place or problem within the community, disregarding a community wide perspective. . . .In other words, legislating as to a spot is the antithesis of zoning. . . .

Baker, 677 A.2d at 1277 (quoting Township of Plymouth v. County of Montgomery, 109 Pa. Commw. 200, 531 A.2d 49 (1987)). It is also significant that the entire block is a single building owned by one owner. The Pennsylvania Supreme Court has said: "If it is aimed at preventing a theretofore legal use of an integrated unit owned by one common interest, the action cannot be supported as a valid zoning." Baker v. Chartiers Twp. Zoning Hearing Bd., 677 A.2d 1274, 1277 (Pa. Commw. 1996) (quoting Commercial Properties, Inc. v. Peternel, 418 Pa. 304, 311, 211 A.2d 514, 519 (1965)).

In sum, it is not enough to ask whether on its face the proposed zoning change appears to subject the Property to a classification similar to that of it's neighbors. Applying the standards enunciated in Sharp, one must consider the topography, location, and characteristics of this land (particularly its placement in the flood plain) together with the relationship of the proposed zoning change to the Planning Commission's comprehensive plan for this parcel and the area. Once that is done, the proposed zoning change in reaction to the planned development appears, as stated below, to single out the lot in question for different treatment from that accorded the surrounding land to the economic detriment of its owner.

The Legislative Intent

The testimony at the hearing made it clear that the impetus for the Bill was a petition of neighbors who were "opposed to this particular development project." As a general matter, the Commonwealth Court has said that "the state of mind of the legislative body in enacting a zoning ordinance is irrelevant to a determination of its validity . . . ." and that "[r]ather, the legislation must stand or fall on its own terms; even the strenuous lobbying by supporters of the zoning amendment for its passage itself does not render the amendment special legislation."Appeal of Apgar From Bd. of Manheim Twp., 661 A.2d 445, 448 (Pa. Commw. 1995). However, while it is true that a zoning bill which is otherwise valid on its own terms will not be rendered invalid merely because it was enacted pursuant to political lobbying, the hearing record on the Bill offers useful evidence bearing on the threshold question whether the legislation was otherwise valid or deliberately singled out a particular property in some impermissible way. In view of the fact that the project was permissible under the prior zoning, a bill designed to change that fact, and thus prevent the landowner from engaging in a use of his property that would have been legal under the prior zoning that had been in place for 20 years, is clearly a "singling out of one lot. . . to the economic detriment of the owner." In that respect, the evidence to that effect in the hearing testimony cannot be ignored.

Conclusion

As the courts have noted, "spot zoning" cases are difficult, are very fact-specific, and depend on a number of factors of varying importance. Thus, it is difficult to predict how the courts might rule in any particular case. This matter, in particular, I find to be a close case. Accordingly, I cannot conclude with any certainty that a court would be persuaded that there is clear evidence that the rezoning represents discriminatory spot zoning sufficient to overcome the presumption of validity and constitutionality of the Bill.

Nevertheless, based upon my consideration of all the facts and the applicable law, I believe that there is support for the conclusion that Bill No. 970234, if it became law, would constitute illegal "spot zoning," since it singles out property owned by a single owner for special treatment to his economic detriment. In any case, under the "pending ordinance doctrine," the zoning and use permit issued to the owner in this case on May 28, 1997 will not be invalidated by Bill No. 970234, even if it becomes law.

Please do not hesitate to call me if you have any questions.

Sincerely,
STEPHANIE L. FRANKLIN-SUBER
City Solicitor

[1] The Department could permissibly adopt a policy of issuing permits that were applied for up to as early as the date the bill's hearing was advertised, but the Department has not adopted that policy.

[2] Of course, there could be litigation on this and related issues that could tie up the project for some time. However, since only a municipality has been held to have standing to assert the pending ordinance doctrine and it has not generally been found to be available to third parties, we believe that the owner would ultimately prevail.

[3] If the Bill becomes law and the Property owner loses the fight under the pending ordinance doctrine, he can be expected to challenge the Bill as an example of impermissible "spot zoning." The chance that the community could seriously challenge the existing RC-3 zoning as "spot zoning" in the event the Bill is not enacted is unlikely, especially since the RC-3 designation was created over 20 years ago as part of a comprehensive remapping with substantial Planning Commission and community participation and not in response to any particular development plan.

[4] For purposes of this opinion, there is no significant difference between "R-10" zoning (the parcel in question) and "R-10A" zoning (the adjoining parcels).