Okay. Mr. Perlman and Mr. Feinstone, I see, but the phone number you spoke of, I do not see.
Oh, well, if you see Feinstone, then that thing, then forget about the phone number.
Perfect. Good afternoon, members of the board. I do appreciate your accommodation. I have a
hearing in Lehigh County later this evening, so I do appreciate you agreeing to hear this first.
My name is Meredith Ferliger with Dilworth Paxson. I am here today on behalf of SAM Development LLC,
the owner of the property that is represented here today by Adam Perlman. Now the request,
oh let me share my screen of course.
Okay the request before the board today concerns a recently constructed building at 3965 Lancaster
Avenue in West Philadelphia that I do have up on the screen. Although the request today is a common
one, we do come to you today without the support of the community, the councilwoman, and I also
the councilwoman, and I also suspect without the support of planning. So to that end, we do need
suspect without the support of planning. So to that.
to provide some detail to this request, which I hope the board will see represents a true and
considerable hardship to my client's property. Now, the board should have an exhibit packet
with 20 exhibits that I'll refer to throughout the presentation. I'll start first with some
background and then I'll ask my client and their representatives to assist with the rest of the
presentation. Now, as the board can see in the plans that I've provided at tabs four and five,
four being the site plan, five being the building elevations, as well as the permit history at tab
12, this building recently completed by right construction as a 10-unit residential dwelling
building with a large, nearly 2,000 square foot ground floor commercial space.
Meredith? Yeah. I hate to cut you off. Is there any way that you can make your picture a little
larger? Yeah, sure. I mean, let me switch to the next view. Is this a little better? That's better.
Thank you. Okay. If you refer to the aerials that I've brought up on the screen here at tab 8,
you'll see that this building sits at the busy convergence of Lancaster Avenue, North 40th Street,
Haverford Avenue and Mount Vernon Street. If you refer now to the zoning map that
I'll bring up on the screen as well, the property is zoned CMX2 and is
surrounded by other properties either zoned CMX2 or RM1. Now the initial
zoning permit for the development was issued in October of 2018, over two years
ago at this point. We're coming before the board today to request a variance to
permit SAM to convert the ground floor commercial space into four one-bedroom residential units,
each roughly 500 square foot or so, give or take. These units would be similarly appointed to the
recently constructed units, which I'll just briefly show you here. And this is tab 12 here,
so just so you get an understanding. Obviously these are brand new units that were just built.
Now, with respect to the application, we did receive two refusals.
Because the property is zoned CMX 2, the ground floor commercial use is required.
We also received a refusal for the proposed increase in the number of units.
Now, we do submit to a considerable hardship here that we'd like to take you through.
In addition to some other factors, the timeline is critical to establishing our hardship.
Now, Adam Perlman, are you unmuted now?
Mr. Perlman, you can unmute yourself and speak.
Mr. Perlman?
yeah can you guys hear me yes we can Adam can you just put your name and
address on the record and the the chairman will swear you in
would you please spell your last name
we're in a firm to tell the truth the whole truth nothing but the truth yes
Thank you. Now, as I mentioned, the zoning permit for this development was obtained in 2018.
I'm going to take Adam through a description of their efforts of leasing the space over the last couple of years.
Now, Adam, when did you first start attempting to lease the space?
I started talking with commercial realtors almost immediately.
um a couple different organizations uh compass jg caldwell banker delphi um just to to have them
without signing an exclusive listing agreement just have them gauge interest from potential tenants
um and that was back when we purchased the property in february of 2018 okay and
And what were some of the measures that you used early on to attempt at leasing the space
once you did get more into the formal end of starting to lease it?
So we kind of left the space as an open shell, but we designed it for a potential restaurant
tenant we have a three foot by three foot exhaust shaft going from the vacant commercial space up
the vacant commercial space up to the roof. We had PGW stub in a commercial gas line
to the roof we had pgw
for a potential restaurant and we installed all storefront windows and left the space vacant
so that a commercial tenant could have a custom fit out. We offered $250,000
dollars for a commercial fit out to any tenants. And we've just, we haven't seen any interest
in over two years. Okay. And, and did, you've answered a couple of my questions in, in your
testimony. Did any of the prospective tenants where you did have any interest, did any of the
prospective tenants give you a reason that they weren't interested in your space?
No one provided any feedback why they didn't follow through with their interests. We had a
couple different types of tenants. We had office space, daycare, restaurants.
um no nobody said anything about the space or the rents when we asked for business plans or
formal letters of intent nobody ever followed up okay thank you now before i move on with adam
our first hearing before the board was originally scheduled for sometime in september for this case
now as a result of the community meeting and discussions with the council office
we agreed to request a lengthy continuance to allow Adam and his team to tap into additional
community resources that the Councilwoman graciously provided to us in seeking to find
a tenant to rent the space. Now in particular, the Councilwoman's office put Adam in touch with
five area business organizations. These included Lancaster Avenue 21st Century Business Association
CDC, Mount Vernon Manor CDC, the Enterprise Center, West Philadelphia Financial Services
Institution, West Philadelphia Corridor Collaborative. Now, Adam, did you end up
contacting all of these organizations? Yes, I emailed and called every organization
and followed up multiple times.
I did receive a few responses,
but nothing ever actually came to a potential viable tenant.
We heard there was some interest from different restaurants.
We heard a bank might be interested.
We were willing to pursue any commercial tenant.
We just never actually received any interest.
Okay. And did you also try and work with the RCO that had been assigned to us for this, which is also a business-oriented group, People's Emergency Center?
Yes. We spoke with Kevin and James and Dante at the RCO meeting.
I met Dante at the commercial space probably a few days after the RCO meeting where we decided to delay the ZBA hearing for four months.
Dante toured the commercial space with me and the rest of the building.
We discussed potential tenants, and I followed up with Dante a few times.
he he was trying to find tenants he said he had restaurants that might be interested or
different grocers that might be interested a bank that might be interested nothing ever came from
that I emailed and called Kevin and James multiple times Kevin's voicemail wasn't available but I
left James a couple voicemails I was never able to get in touch with Kevin or James okay now the
I did include a record of the fairly extensive email correspondence that Adam referred to
at tab 18 of my packet. And you'll see if you had the ability to review this history that
Adam had continuous follow-up with all of these organizations over the course of the last
four months. Now, Adam, before I move on, I want to make this clear. What was your intent for the
space when the structure was first built and approved? We 100% built this space for a commercial
tenant. It's currently a shell that's roughed in for a commercial bathroom, a commercial space with
floor drains, gas line, the duct shaft going through the building.
the duct shaft going through the building. We designed it with these storefronts to be a
commercial space facing a busy intersection. We really had every intention and every hope of
finding a commercial tenant. But at this point, it's pretty clear that after two plus years,
we we don't have any interest and and there's no sign of any interest that we're going to find a
tenant it'll be difficult to try to convert this into a residential space and it's unfortunate that
there is no commercial interest but at this point we really don't have any other options
than to file for this variance. Thank you. Adam Feinstone if you can get yourself unmuted now.
Meredith, before you go any further, the photo that you have and what we're looking at now,
is that the current condition of that first, that ground floor?
Adam, can you see the screen here? This was a photo from the listing. It shows the shell
condition of the commercial space. The commercial space is cleaned out. The walls are all painted.
it's a vanilla box. The floor is stoned so that we could rough in plumbing so we didn't pour the
slab in here but the the shell is in a standard commercial vanilla box.
Okay so you haven't begun any, and correct me if I'm wrong, any partitions that would
basically reflect what you're requesting. You haven't divided the ground floor
into what would, if you were approved, into the four one-bedroom. Is that correct?
Correct. It's a complete open shell right now. Okay.
We'd love to put them in. And my other question is, what is the size of the one-bedroom units
your your your proposal let me let me bring up we we did put together just a basic schematic floor
plan um so the units would vary from 471 square feet 490 514 508 and mr chairman i am going to
have adam um talk a little bit about where those sizes came from a little bit later in the
presentation okay thank you um adam finestone are you unmuted ready to talk
adam you can unmute yourself and speak
can you hear me we sure can name and address for the record please and the chairman will swear you
in adam finestone 1325 east moymensing avenue philadelphia pa 19147 it's wearing a firm to
tell the truth the whole truth nothing but the truth yes thank you adam can you just tell the
board, what is your involvement with this particular property? So I've been trying to
lease out the commercial space now for two plus years. I've helped various friends and other
business owners get in to their current spaces. And I've had it listed for sale and reached out
to my whole sphere for really two years trying to find a commercial tenant. Okay, so let's just
back up for a minute so how would how would a space like this typically be marketed what what
would if you were of course retained to lease this space what efforts would you typically use
to go about leasing a space like this um banners which was put up um we listed it on the multiple
listing service um and sent out to every agent in the philadelphia area philadelphia and suburb area
Okay. And when was it first listed on the Multiple Listing Service?
I believe it was almost a year ago.
Okay. And members of the board, I do have a copy of that listing up on the screen right now.
This is reflected at Exhibit 10.
Now, how would you typically set the price of a commercial listing like this?
Sorry, you're breaking up. I'm in the car.
and how how would how would you usually go about setting the listing price of a commercial unit
like this um so we looked at at numerous um commercial spaces that were currently rented
out in the area and pretty much based that on a price per square foot um and what what kind of
amenities and what really the owners would do to this space um for the for the next tenant
and based on that just a couple of the spaces like the um the space right next door with the
i think it's the hot dog place i mean they're paying i it's like i think it's around two
I think it's around $2,000 a month, made like 800 square feet.
thousand dollars a month they have like 800 square feet so this is about two thousand
So this is about 2,000 square feet, plus the fact that the owners were willing to put in a quarter million dollars to a business.
That's where we came up with the $4,000.
So you would say, based on your experience as a realtor renting commercial spaces, that this space was competitively priced?
It was not overpriced for the area?
Yeah, especially the fact that they're willing to put in a quarter million dollars to make it a space.
Most landlords would not be willing to do that.
Now, it would be easy, of course, to argue that SAM's troubles here were somehow related to the COVID-19 pandemic and that they should just be patient.
But the information that we would have would suggest that the challenges here are not solely COVID-related and that there are other extenuating factors unique to this property that do contribute to the hardship that we're here today for.
Adam Feinstone, so is it correct that you also took a look at some other listings in this immediate area before the hearing?
Okay. And over what periods of time did you gather leasing histories for?
I looked at anywhere from three months up to about a year.
Okay. And what geographic area were you looking in?
I just looked within a half a mile of the space. I didn't really want to go further out because then you get into different neighborhoods and everything else and things change dramatically.
Okay. And when you looked at the leasing histories for this area, what did those leasing histories show about the ability to lease a commercial space in this area?
it showed so there was over the last year i believe there i don't have it right in front
of me but i believe there's been like nine spaces like this available five of which were rented
um and there's still another four available um i know did the three-month history show
additional evidence that there is commercial viability in this area honestly not really
um and i've talked on top of that i've talked to a lot of other people with small businesses and
i've brought them through trying to think of other ways trying to maybe even turn it into two
two spaces two commercial properties trying to team up people um and just no one thought it was
viable for what for what they wanted okay and it wasn't necessarily the space it was really just
more of the location. Okay, but again, just getting back to the potential argument that this
is a COVID-related problem, did the histories that you look at, did they show that there have
been commercial spaces that have been leased while the COVID-19 pandemic has been going on?
Yes. Okay. And then one of the arguments that I expect that we might hear a little bit later on
is that, you know, the city has stated goals for this commercial corridor, which we certainly
respect. And I think you've heard, you know, Adam's goal here was to contribute to that.
Adam Finestone, if this space, if the board were to deny this variance and this space had to
remain vacant for the foreseeable future, based on your experience in leasing, what impact do
you expect the vacancy would have on the ability of other commercial owners to rent their space?
I think it would negatively impact that. When you see a vacancy, especially in a new building that
with all those gorgeous storefront windows not being leased, it probably really scares other
developers or anyone else that wants to start a commercial space. You need large commercial spaces
around each other to really kind of feed off each other. And without that, it's not viable
for other businesses to start up. Thank you. So based on this information that we've given you,
we believe we've established that SAM employed continual and diligent measures over the course
of nearly two years to find a viable commercial tenant for this space. You heard that Adam
Perlman state that even as we present to the board today, that his true preference would be
have a commercial tenant in that space. What we have not yet established is some of the reasons
why we submit this property is uniquely situated in a way that contributes to the hardship.
Now if the board refers to tab 19, some photographs here,
some photographs here, you'll see some photographs of the immediately surrounding property.
you'll see some photographs of the immediately surrounding property.
Although this property does have a Lancaster Avenue address, there's only a very small portion
of the building that actually sits on Lancaster Avenue. So if you look at this photo, you'll see
the hot dog place, you'll see the church right next door. Really, the only portion of this building
that sits on Lancaster Avenue is where this door is. And even at that, it's right at the corner.
Most of the building is oriented along North 40th Street, which you can see has a small pocket park that leads to mostly residential uses, particularly the neighboring apartment complex at 611 North 40th Street that has 17 units.