civus
Hearing video

ZBA Hearing - January 13, 2021

Philadelphia Zoning Board of Adjustment (ZBA)Jan 13, 20215h 27m

Okay. Mr. Perlman and Mr. Feinstone, I see, but the phone number you spoke of, I do not see.

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Oh, well, if you see Feinstone, then that thing, then forget about the phone number.

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Okay.

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Perfect. Good afternoon, members of the board. I do appreciate your accommodation. I have a

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hearing in Lehigh County later this evening, so I do appreciate you agreeing to hear this first.

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My name is Meredith Ferliger with Dilworth Paxson. I am here today on behalf of SAM Development LLC,

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the owner of the property that is represented here today by Adam Perlman. Now the request,

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oh let me share my screen of course.

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Okay the request before the board today concerns a recently constructed building at 3965 Lancaster

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Avenue in West Philadelphia that I do have up on the screen. Although the request today is a common

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one, we do come to you today without the support of the community, the councilwoman, and I also

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the councilwoman, and I also suspect without the support of planning. So to that end, we do need

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suspect without the support of planning. So to that.

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to provide some detail to this request, which I hope the board will see represents a true and

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considerable hardship to my client's property. Now, the board should have an exhibit packet

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with 20 exhibits that I'll refer to throughout the presentation. I'll start first with some

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background and then I'll ask my client and their representatives to assist with the rest of the

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presentation. Now, as the board can see in the plans that I've provided at tabs four and five,

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four being the site plan, five being the building elevations, as well as the permit history at tab

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12, this building recently completed by right construction as a 10-unit residential dwelling

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building with a large, nearly 2,000 square foot ground floor commercial space.

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Meredith? Yeah. I hate to cut you off. Is there any way that you can make your picture a little

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larger? Yeah, sure. I mean, let me switch to the next view. Is this a little better? That's better.

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Thank you. Okay. If you refer to the aerials that I've brought up on the screen here at tab 8,

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you'll see that this building sits at the busy convergence of Lancaster Avenue, North 40th Street,

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Haverford Avenue and Mount Vernon Street. If you refer now to the zoning map that

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I'll bring up on the screen as well, the property is zoned CMX2 and is

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surrounded by other properties either zoned CMX2 or RM1. Now the initial

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zoning permit for the development was issued in October of 2018, over two years

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ago at this point. We're coming before the board today to request a variance to

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permit SAM to convert the ground floor commercial space into four one-bedroom residential units,

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each roughly 500 square foot or so, give or take. These units would be similarly appointed to the

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recently constructed units, which I'll just briefly show you here. And this is tab 12 here,

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so just so you get an understanding. Obviously these are brand new units that were just built.

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Now, with respect to the application, we did receive two refusals.

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Because the property is zoned CMX 2, the ground floor commercial use is required.

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We also received a refusal for the proposed increase in the number of units.

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Now, we do submit to a considerable hardship here that we'd like to take you through.

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In addition to some other factors, the timeline is critical to establishing our hardship.

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Now, Adam Perlman, are you unmuted now?

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Mr. Perlman, you can unmute yourself and speak.

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Mr. Perlman?

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yeah can you guys hear me yes we can Adam can you just put your name and

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address on the record and the the chairman will swear you in

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would you please spell your last name

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we're in a firm to tell the truth the whole truth nothing but the truth yes

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Thank you. Now, as I mentioned, the zoning permit for this development was obtained in 2018.

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I'm going to take Adam through a description of their efforts of leasing the space over the last couple of years.

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Now, Adam, when did you first start attempting to lease the space?

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I started talking with commercial realtors almost immediately.

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um a couple different organizations uh compass jg caldwell banker delphi um just to to have them

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without signing an exclusive listing agreement just have them gauge interest from potential tenants

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um and that was back when we purchased the property in february of 2018 okay and

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And what were some of the measures that you used early on to attempt at leasing the space

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once you did get more into the formal end of starting to lease it?

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So we kind of left the space as an open shell, but we designed it for a potential restaurant

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tenant we have a three foot by three foot exhaust shaft going from the vacant commercial space up

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the vacant commercial space up to the roof. We had PGW stub in a commercial gas line

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to the roof we had pgw

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for a potential restaurant and we installed all storefront windows and left the space vacant

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so that a commercial tenant could have a custom fit out. We offered $250,000

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dollars for a commercial fit out to any tenants. And we've just, we haven't seen any interest

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in over two years. Okay. And, and did, you've answered a couple of my questions in, in your

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testimony. Did any of the prospective tenants where you did have any interest, did any of the

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prospective tenants give you a reason that they weren't interested in your space?

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No one provided any feedback why they didn't follow through with their interests. We had a

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couple different types of tenants. We had office space, daycare, restaurants.

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um no nobody said anything about the space or the rents when we asked for business plans or

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formal letters of intent nobody ever followed up okay thank you now before i move on with adam

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our first hearing before the board was originally scheduled for sometime in september for this case

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now as a result of the community meeting and discussions with the council office

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we agreed to request a lengthy continuance to allow Adam and his team to tap into additional

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community resources that the Councilwoman graciously provided to us in seeking to find

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a tenant to rent the space. Now in particular, the Councilwoman's office put Adam in touch with

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five area business organizations. These included Lancaster Avenue 21st Century Business Association

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CDC, Mount Vernon Manor CDC, the Enterprise Center, West Philadelphia Financial Services

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Institution, West Philadelphia Corridor Collaborative. Now, Adam, did you end up

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contacting all of these organizations? Yes, I emailed and called every organization

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and followed up multiple times.

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I did receive a few responses,

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but nothing ever actually came to a potential viable tenant.

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We heard there was some interest from different restaurants.

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We heard a bank might be interested.

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We were willing to pursue any commercial tenant.

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We just never actually received any interest.

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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?

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Yes. We spoke with Kevin and James and Dante at the RCO meeting.

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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.

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Dante toured the commercial space with me and the rest of the building.

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We discussed potential tenants, and I followed up with Dante a few times.

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he he was trying to find tenants he said he had restaurants that might be interested or

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different grocers that might be interested a bank that might be interested nothing ever came from

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that I emailed and called Kevin and James multiple times Kevin's voicemail wasn't available but I

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left James a couple voicemails I was never able to get in touch with Kevin or James okay now the

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I did include a record of the fairly extensive email correspondence that Adam referred to

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at tab 18 of my packet. And you'll see if you had the ability to review this history that

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Adam had continuous follow-up with all of these organizations over the course of the last

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four months. Now, Adam, before I move on, I want to make this clear. What was your intent for the

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space when the structure was first built and approved? We 100% built this space for a commercial

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tenant. It's currently a shell that's roughed in for a commercial bathroom, a commercial space with

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floor drains, gas line, the duct shaft going through the building.

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the duct shaft going through the building. We designed it with these storefronts to be a

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commercial space facing a busy intersection. We really had every intention and every hope of

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finding a commercial tenant. But at this point, it's pretty clear that after two plus years,

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we we don't have any interest and and there's no sign of any interest that we're going to find a

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tenant it'll be difficult to try to convert this into a residential space and it's unfortunate that

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there is no commercial interest but at this point we really don't have any other options

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than to file for this variance. Thank you. Adam Feinstone if you can get yourself unmuted now.

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Meredith, before you go any further, the photo that you have and what we're looking at now,

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is that the current condition of that first, that ground floor?

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Adam, can you see the screen here? This was a photo from the listing. It shows the shell

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condition of the commercial space. The commercial space is cleaned out. The walls are all painted.

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it's a vanilla box. The floor is stoned so that we could rough in plumbing so we didn't pour the

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slab in here but the the shell is in a standard commercial vanilla box.

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Okay so you haven't begun any, and correct me if I'm wrong, any partitions that would

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basically reflect what you're requesting. You haven't divided the ground floor

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into what would, if you were approved, into the four one-bedroom. Is that correct?

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Correct. It's a complete open shell right now. Okay.

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We'd love to put them in. And my other question is, what is the size of the one-bedroom units

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your your your proposal let me let me bring up we we did put together just a basic schematic floor

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plan um so the units would vary from 471 square feet 490 514 508 and mr chairman i am going to

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have adam um talk a little bit about where those sizes came from a little bit later in the

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presentation okay thank you um adam finestone are you unmuted ready to talk

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adam you can unmute yourself and speak

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can you hear me we sure can name and address for the record please and the chairman will swear you

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in adam finestone 1325 east moymensing avenue philadelphia pa 19147 it's wearing a firm to

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tell the truth the whole truth nothing but the truth yes thank you adam can you just tell the

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board, what is your involvement with this particular property? So I've been trying to

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lease out the commercial space now for two plus years. I've helped various friends and other

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business owners get in to their current spaces. And I've had it listed for sale and reached out

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to my whole sphere for really two years trying to find a commercial tenant. Okay, so let's just

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back up for a minute so how would how would a space like this typically be marketed what what

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would if you were of course retained to lease this space what efforts would you typically use

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to go about leasing a space like this um banners which was put up um we listed it on the multiple

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listing service um and sent out to every agent in the philadelphia area philadelphia and suburb area

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Okay. And when was it first listed on the Multiple Listing Service?

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I believe it was almost a year ago.

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Okay. And members of the board, I do have a copy of that listing up on the screen right now.

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This is reflected at Exhibit 10.

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Now, how would you typically set the price of a commercial listing like this?

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Sorry, you're breaking up. I'm in the car.

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and how how would how would you usually go about setting the listing price of a commercial unit

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like this um so we looked at at numerous um commercial spaces that were currently rented

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out in the area and pretty much based that on a price per square foot um and what what kind of

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amenities and what really the owners would do to this space um for the for the next tenant

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and based on that just a couple of the spaces like the um the space right next door with the

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i think it's the hot dog place i mean they're paying i it's like i think it's around two

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I think it's around $2,000 a month, made like 800 square feet.

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thousand dollars a month they have like 800 square feet so this is about two thousand

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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.

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That's where we came up with the $4,000.

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So you would say, based on your experience as a realtor renting commercial spaces, that this space was competitively priced?

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It was not overpriced for the area?

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Yeah, especially the fact that they're willing to put in a quarter million dollars to make it a space.

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Most landlords would not be willing to do that.

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Okay.

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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.

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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.

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Adam Feinstone, so is it correct that you also took a look at some other listings in this immediate area before the hearing?

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Yeah.

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Okay. And over what periods of time did you gather leasing histories for?

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I looked at anywhere from three months up to about a year.

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Okay. And what geographic area were you looking in?

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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.

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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?

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it showed so there was over the last year i believe there i don't have it right in front

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of me but i believe there's been like nine spaces like this available five of which were rented

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um and there's still another four available um i know did the three-month history show

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additional evidence that there is commercial viability in this area honestly not really

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um and i've talked on top of that i've talked to a lot of other people with small businesses and

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i've brought them through trying to think of other ways trying to maybe even turn it into two

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two spaces two commercial properties trying to team up people um and just no one thought it was

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viable for what for what they wanted okay and it wasn't necessarily the space it was really just

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more of the location. Okay, but again, just getting back to the potential argument that this

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is a COVID-related problem, did the histories that you look at, did they show that there have

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been commercial spaces that have been leased while the COVID-19 pandemic has been going on?

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Yes. Okay. And then one of the arguments that I expect that we might hear a little bit later on

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is that, you know, the city has stated goals for this commercial corridor, which we certainly

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respect. And I think you've heard, you know, Adam's goal here was to contribute to that.

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Adam Finestone, if this space, if the board were to deny this variance and this space had to

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remain vacant for the foreseeable future, based on your experience in leasing, what impact do

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you expect the vacancy would have on the ability of other commercial owners to rent their space?

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I think it would negatively impact that. When you see a vacancy, especially in a new building that

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with all those gorgeous storefront windows not being leased, it probably really scares other

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developers or anyone else that wants to start a commercial space. You need large commercial spaces

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around each other to really kind of feed off each other. And without that, it's not viable

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for other businesses to start up. Thank you. So based on this information that we've given you,

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we believe we've established that SAM employed continual and diligent measures over the course

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of nearly two years to find a viable commercial tenant for this space. You heard that Adam

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Perlman state that even as we present to the board today, that his true preference would be

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have a commercial tenant in that space. What we have not yet established is some of the reasons

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why we submit this property is uniquely situated in a way that contributes to the hardship.

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Now if the board refers to tab 19, some photographs here,

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some photographs here, you'll see some photographs of the immediately surrounding property.

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you'll see some photographs of the immediately surrounding property.

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Although this property does have a Lancaster Avenue address, there's only a very small portion

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of the building that actually sits on Lancaster Avenue. So if you look at this photo, you'll see

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the hot dog place, you'll see the church right next door. Really, the only portion of this building

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that sits on Lancaster Avenue is where this door is. And even at that, it's right at the corner.

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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.

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