Contact Us
News

Inside Philadelphia's Broken System Of Development Approvals

Want to get a jump-start on upcoming deals? Meet the major Philadelphia players at one of our upcoming events!

Until recently, the chairman of the only government panel in Philadelphia with the power to approve or deny a development proposal was a union boss' personal chiropractor. After he resigned amid corruption allegations, Mayor Jim Kenney replaced him with a lobbyist.

Roughly three-quarters of all development proposals in the city go before that five-member panel, the Zoning Board of Adjustment.

Inside Philadelphia's Broken System Of Development Approvals
Philadelphia City Hall

While builders must notify the city’s planning department and Civic Design Review board of their development plans, neither of them can advance or stop development — only suggest changes. According to one preliminary study, developers ignore the CDR’s suggestions two-thirds of the time.

So who decides what gets built in a city, and how? It is one of the central questions at the intersection of commercial real estate and urban planning, and in Philadelphia, it does not have any satisfactory answers.

The mayor-appointed ZBA acts as a de facto gatekeeper for development, free to ignore the zoning code if it chooses. The zoning code can be changed for any stretch of land in the city by whatever member of the Philadelphia City Council represents it, without input from the rest of the council.

CDR meetings now serve as an ad hoc public forum for community members to voice concerns with a development. To many, it is one of the few times they can weigh in on the record at a public hearing on building proposals. To some developers and architects, it is seen as a waste of time and money.

Every part of the system is a source of mounting frustration and distrust.

“The people who are engaged in this, think about it and work on these issues daily … many of them are frustrated with this process, and feel that there are tangible ways we can do better,” Callowhill Neighborhood Association board member Vincent DiMaria said. “So for the administration to make no changes would feel like a slap in the face.”

How zoning shapes the city

The city's zoning map is part of its charter, which means that it can only be changed by the City Council. The Philadelphia City Planning Commission introduced the first comprehensive remapping plan since the 1960s in 2016, and the council approved the final part of that plan this past October.

Council members have the ability to unilaterally rezone swaths of land in the district that they represent, and despite the recent overall remapping, they have used that power regularly in the past two years. Just like with the sale of vacant, city-owned land, zoning bills are subject to the tradition of councilmanic prerogative, which precludes any objection from the rest of council.

In the absence of a council bill to rezone land for a building, a developer can circumvent the zoning code by applying for a variance with the Zoning Board of Adjustment.

In cases from adding a floor to a single-family house to building a high-rise apartment building on a block zoned for industrial, the ZBA has veto power, with rulings that can only be appealed to the Court of Common Pleas.

For developments that require zoning variances or meet certain size criteria, a hearing of Civic Design Review is required. CDR members are also appointed by the mayor and it is made up of primarily architects and designers.

The panel’s directive is to give feedback to projects based on aesthetics and how they fit in the surrounding community, but can do no more than require a second hearing. Neither developers nor the ZBA are obligated to take CDR opinions into account.

A preliminary Planning Department study presented to the City Council found that from CDR’s creation in 2012 to the end of 2017, more than two-thirds of projects moved forward without incorporating any feedback from the panel. The final study has yet to be released to the public, pending more updated data collection and the resulting analysis.

Inside Philadelphia's Broken System Of Development Approvals
Wrightwood Financial CEO Bruce Cohen, Post Brothers Apartments President Matthew Pestronk and Cortland Senior Managing Director Ned Stiker

Neither the ZBA nor council members are required to factor in any specific criteria when making their decision on whether to allow a variance or rezone land. Even when the PCPC researches and proposes zoning changes to a council member, they can simply refuse to introduce it as a bill.

Councilwoman Jannie Blackwell ignored a proposal to rezone a West Philly parcel — surrounded completely by row houses without access to a sidewalk — to single-family. That parcel is now slated for an apartment building, even as its neighbors complain that it would literally rise in their backyard.

“The mayor should have an articulated goal for the purpose of the ZBA that validates the work of the planning commission,” Councilwoman Maria Quiñones-Sánchez told Bisnow.

Developers seeking variances are required to hold a neighborhood meeting before ZBA and CDR hearings, but are not required to heed residents’ concerns. Council remapping also requires at least one community meeting with PCPC staff present, and council members are directed to solicit the PCPC’s input, but that is also nonbinding.

The ZBA: Questions Of Integrity

The ZBA’s importance has become a point of controversy due to its deep connections with the city’s building trade unions. Those organizations have been embroiled in the corruption case that drew indictments for John “Johnny Doc” Dougherty, head of the International Brotherhood of Electrical Workers Local 98 and the Building and Construction Trades Council, along with several of his associates, including Councilman Bobby Henon, in January.

Dougherty has long been considered one of the most powerful people behind the scenes in Philly politics, and as a result of that influence, commercial real estate as well. Now, evidence of his alleged criminal activity has caused some to question the legitimacy of organizations touched by that influence.

“The ZBA is the mechanism through which old-fashioned, pay-to-play politics operate in Philadelphia,” Post Brothers President Matt Pestronk said. “[It] has exactly one person who’s technically qualified; they have one architect and four lifetime political machine people on the board. It’s a kangaroo court.”

Pestronk has hard experience with the whims of the ZBA. In the fall of 2017, the board denied Post Brothers’ application for a variance to redevelop a former warehouse at Ninth and Poplar streets into a mixed-use building with apartments, retail and possibly coworking space.

Pestronk told Bisnow — as did two other people with knowledge of the process — the decision was politically motivated, and Pestronk called out board member and Steamfitters Union Local 420 business manager Anthony Gallagher for his brazenness.

“[Gallagher] said, ‘The Zoning Board doesn’t care about hiring minority workers,’ and said the building should be turned back into a factory for the union jobs,” Pestronk said. “I mean, jaws dropped around the room.”

Gallagher quietly resigned from the ZBA soon after, only to be replaced by his Local 420 colleague James Snell. Post Brothers won its appeal with the Court of Common Pleas to overturn the board’s decision.

Inside Philadelphia's Broken System Of Development Approvals
A representative for HFZ Capital Group presents its plan for a mixed-use development around the North Philadelphia Amtrak station to Civic Design Review on April 2.

The ZBA currently consists of Snell; former councilman and current lobbyist Frank DiCicco (who serves as chair); Laborers Union Local 57 representative Confesor Plaza; architect Thomas Holloman; and Carol Tinari, the wife of local defense attorney Nino Tinari, who holds leadership positions on several civic boards, according to PlanPhilly.

Mayor Jim Kenney selected DiCicco to replace Jim Moylan, Johnny Doc’s chiropractor. Moylan was chair of the ZBA and of the Pennsport Civic Association, and resigned his ZBA post in 2016 after his offices were raided. He was among those indicted in January.

Gallagher now serves as chairman of political action committee Philly 2019, which represents the interests of the local building trades and has pumped hundreds of thousands of dollars into Kenney’s re-election campaign.

The Gatekeepers Of Development

Despite an overhaul to the zoning code in 2012, variances remain so common about 75% of all projects go before the ZBA, according to several people with knowledge of the process.

Some ZBA appeals are due to buildings continually operating according to previous zoning law, which grandfathered their lots into the current code. Some come from changes in a surrounding neighborhood over the past seven years, and some are developers who just want to build a bigger building than what is allowed.

The ZBA approves anywhere between 90% and 95% of applications for variances, depending on who you ask, a rate that JKRP Architects founding principal Jerry Roller and OCF Realty President Ori Feibush characterize as reflective of the out-of-date, patchwork zoning code.

Variances are only supposed to be granted in the event that a developer would incur a hardship to abide by the zoning code as written, and Quiñones-Sánchez believes that if the ZBA would adhere to that principle, the percentage would be lower.

“The ZBA is supposed to be a place where you go to express the hardship or extenuating circumstances [related to] the [zoning] map … But if we map it today, someone’s at the ZBA tomorrow,” Quiñones-Sánchez said. “Either the executive who makes those appointments is saying, ‘I’m OK with the 95% of cases you’re approving,’ or the ZBA is not the place where people should seek those approvals, and the approval rate should be lower.”

Multiple sources at the community level told Bisnow they do not believe that the ZBA holds their interests in mind when deciding variances. The Callowhill Neighborhood Association saw its strenuous objections to a self-storage facility planned near the busy corner of Broad and Spring Garden streets fall on deaf ears.

“Even when a developer needs to come before a community organization to apply for a variance, we have absolutely no power or teeth,” DiMaria said. “If a community organization is opposed to [a development], it tends to get the variance anyway.”

Inside Philadelphia's Broken System Of Development Approvals
A rendering for the self-storage facility at 1314 Spring Garden St. in Philadelphia

Quiñones-Sánchez is a firm proponent of remapping through council legislation as a fundamentally more democratic approach than the ZBA because of its higher community input requirements and because council members can be voted out. She also acknowledged that the process moves much slower than it should because the planning department is overburdened and understaffed.

Roller conceded that the ZBA would grant a lower percentage of variances “in a perfect world,” but placed the blame on City Council and its failure to put forth a coherent plan in a timely fashion. Feibush told Bisnow the ZBA is a necessary corrective because City Council “sucks at their jobs.”

“After two years of rewriting the zoning code, it’s clear that politically, it’s not happening,” Roller said. “It puts the onus on the ZBA to be sympathetic to development, and I think it does a very good job of doing that.”

Feibush said his company has been fighting with the neighborhood of Point Breeze and its representative on council, Kenyatta Johnson, to push through a planned redevelopment of the former Frankford Chocolate Factory site. Johnson's office did not respond to multiple requests for comment.

Residents were able to protect some of the old factory at 2201 Washington Ave. through the Philadelphia Historical Commission, and Feibush said he made over $1.5M worth of changes to the project after feedback from neighbors and the CDR, but peculiar zoning made going through the ZBA necessary anyway.

“The only legal use for the factory is a marina, and I’m landlocked,” Feibush said. “You can’t fault the Planning Commission for that — it recommended that the area be remapped, but it’s nothing but a failure of [City] Council wanting to be judge and jury for every project in the city.”

Civic Design Review: Sound And Fury, But 'No Teeth'

Feibush said that the two CDR hearings for the chocolate factory project spent “the entire conversation” discussing its lack of affordable housing rather than the design itself due to the outcry from the community. Citizens frustrated with the ZBA have taken to using the public comment period at CDR hearings to air their grievances and concerns with a project, whether it has to do with design or not.

At the April 2 meeting of CDR, LaTonya Talford, a block captain on Hicks Street in North Philadelphia, spoke to protest the mixed-use development planned for the area surrounding the North Philadelphia Amtrak Station. The project is by-right, so the ZBA was not involved, but the community meeting mandated by the CDR process was delayed multiple times, only being held a week before the April 2 hearing, Talford said — leaving no time for New York-based developer HFZ Capital Group to incorporate community feedback into its presentation.

“There’s a lot of fear, and the community is asking to just pause [the process] for a minute to have a real, broader conversation about issues like if there will be a percentage of affordable [housing units],” Tioga United representative Sheila Howard said at the meeting. Tioga United is the registered community organization for Tioga, one of the neighborhoods that touch the project.

Inside Philadelphia's Broken System Of Development Approvals
MMPartners founder and Managing Partner David Waxman and Alterra Property Group Managing Partner Leo Addimando

CDR voted to bring the project back for a second hearing, with the panel noting that its design critiques were relatively minor, but that it was concerned with the lack of communication with the neighborhood. It does not have the power to require further neighborhood meetings.

“We’re here to talk about design issues, but what we can do in our comments is encourage further conversation between the community and the developer,” CDR Chair Nancy Rogo Trainer said.

Talford spoke out of a concern that the developers were not taking the community meeting process seriously, she said, and to use the rare opportunity for her comments to become part of the public record. To her and others, CDR is now serving an important democratic function, albeit one far removed from its mandate.

“CDR is requiring nearly every developer to come back a second time, and their feedback is inconsistent from project to project, and personal animus and opinion is interjected into the process on a fairly consistent basis,” Feibush said. “And that’s happening more often.”

“The only power the CDR has is shame, essentially,” DiMaria said. “The members of the CDR are extremely qualified, and they provide excellent design feedback, but again there is absolutely no teeth to it, so it seems like it’s kind of just for show.”

DiMaria and Pestronk are among those calling for the CDR to be given more teeth as a check on the ZBA, but no one seems to have a clear idea of the right way to do it.

Alterra Property Group Managing Partner Leo Addimando is a developer and member of the CDR. He is wary of giving the CDR any approximation of the ZBA’s power, calling the two bodies “apples and oranges.”

But he acknowledged that his body can have more use than as a de facto town hall.

“I think it would be useful for the CDR to render some sort of opinion. Even if it wasn’t binding in any way, it could be instructive,” Addimando said. “We don’t say at the end of the CDR whether we like the project or don’t, we just make a series of recommendations. Implied in the process is that if we don’t ask you to come back a second time, it’s an approval that doesn’t actually mean anything. It’s a little silly, you gotta acknowledge that.”

Although he stopped short of agreeing with Quiñones-Sánchez over giving the board a specific directive for decision-making, Addimando believes the ZBA would benefit from a stronger imperative to weigh the input of the planning department, registered community organization and the CDR.

As it stands, the ZBA’s opaque nature and ties to the controversial building trades have caused many Philly residents, as well as some developers, to lose faith in the fairness of the permitting process.

“People think, ‘Who are these people who are making the decisions about my block?’” Quiñones-Sánchez said.

UPDATE, MAY 13, 3:15 P.M. ET: This story has been updated to clarify the nature of the dispute over OCF Realty's redevelopment of the Frankford Chocolate Factory.