There's a small vacant commercial space right next to the building on North 40th Street.
Now, if you again look at photos of this major intersection, you'll notice that it's not terribly
conducive to free-flowing pedestrian travel given the extensive street widths and the number of
traffic lights that are here. You should also notice the abundance of residential uses that
do surround this intersection, particularly some of the single-family homes across the street here
and along Lancaster. Now the heavily commercial uses along Lancaster largely commence and continue
along the opposing side of Lancaster Avenue. So should the board grant the requested variances,
the proposed solely multifamily use will harmonize with the character of this neighborhood
and will not create any disruption in the commercial block. Now the feedback that we did
received from the RCO and the council office is that Lancaster Avenue is intended for commercial
development, and we wholeheartedly respect that. However, this property is uniquely situated in
such a way that makes the commercial use here challenging and undesirable. Now, if the board
also refers to the aerial that I have up on the screen here at tab 14, you'll see a historic
aerial of this property that dates back to 2004. I was not able to find any aerials earlier than
this, so we do suspect that this condition likely is earlier than 2004, but this should show you
that until the development was constructed, the property was vacant for at least the last 15
years. I mention this only to show that by the board granting this variance, you're not taking
away from the commercial character of this area. The property did not previously have a commercial
use and the granting of the variance will preserve the status quo that's existed at least for the
last 15 years. Now before we conclude, I'd like to bring Adam Perlman back just for a moment.
Adam, as a result of the continuing vacancy, can you just very briefly tell the board
some of the implications that you've now started to face
as a result of the vacancy?
Our insurance carrier dropped the project
because I guess there's liability
with vacant commercial spaces.
So we were dropped from our insurance policy
and it took me until the sixth insurance carrier
to find someone that would carry a 10 unit over vacant commercial space and paying a significant
premium to have a vacant commercial space. Our commercial lender that provided the commercial
construction loan for the project, they contacted us in early December and said that even though
we've rented out the units up above the vacant commercial space we're not hitting our debt
service coverage ratio and they demanded we pay a couple hundred thousand dollars
before the end of the year so we had to come up with that money and pay down our our loan because
of this vacancy um it's it's it's unfortunate but it's there's nothing we could do except apply for
of variance and hope that we can get residential units in there, four one-bedroom units would rent
out in two days. So Adam, I want to just hit on that point for a minute. So when you decided to
consider converting this, how did you come up with the four one-bedroom units? What factors
led you to that specific breakdown? The high demand for the one-bedroom units, we rented up
We have 10 units in the building.
We have two of those are one bedroom units and those leased out in the first.
two of those are one-bedroom units and those leased out in the first few days they were listed.
We received a lot of inquiries. People were offering to put down deposits for whenever
these would become available and being on the ground floor it's less desirable so these would
become more affordable one-bedroom units which are in very high demand right now two blocks away
at 38th and Lancaster they're they're asking two thousand dollars for one bed I don't think that
if we listed it for anything we wouldn't get more than a thousand dollars for one bed maybe
eight hundred or nine hundred so we would be providing the area with affordable one-bedroom
apartments for tenants. Another thing that was brought up at the RCO meeting was
lack of parking spaces. They want a busy commercial business in there, which would
take up a lot of parking spaces for more people in the area who may or may not have cars
because there's a lot of public transportation available, would not provide that burden on
the community. It wouldn't cause any hardships. Okay, thank you. So just to briefly conclude,
we do submit that these are the least minimum variances. We're not requesting any dimensional
variances. Providing a commercial use here is just simply not viable at this time, given the
lot history, its orientation along North 40th Street, the lack of commercial use on this side
of a large intersection, and most importantly, given the extensive efforts that SAM has made
with both the community and the council office to attempt to locate a viable commercial tenant
here. The additional four units will ensure that these units are within the neighborhood
context and will support additional density necessary to support future commercial viability
of the Lancaster Avenue corridor in accordance with the city's goals. We submit that the units
and lack of commercial space will not increase the local congestion given the extensive public
transit network and the availability of Simone Street parking in this area. The proposal will
not impair light and air or negatively impact surrounding properties nor will it place an undue
burden on public facilities, utilities, or cause any environmental damage. We submit the variance
complies in full with the provisions of section 14303AE of the code as it's further detailed in
my memorandum of law submitted at tab 15. Now to reiterate, SAM sincerely respects the community
and the city's goals for this area and I hope you've heard that today. As you heard, they were
hoping to find a commercial tenant for the space and tried everything that they could with the
assistance of nearly every business-oriented organization in this area. However, they
unfortunately do not have the luxury or the flexibility to leave the space vacant indefinitely.
Accordingly, we're asking the board to recognize the severe hardship and grant the requested
variances today. Adam Perlman, have you heard all of my testimony here today before the board?
And would you agree that testimony was true and accurate, and would you adopt it as if it were your own?
Thank you.
And with that, we would be happy to answer any questions.
Thank you.
The photograph you showed a few minutes ago along 40th Street that showed a commercial property adjacent to the applicants.
It obviously looks like it's closed.
The security gates are down.
Would you or does anyone could speak to whether that commercial space has been abandoned or if it's been abandoned or is it in use?
Yeah, so this is Adam Perlman. It's 609 North 40th Street. It's owned by Dr. Rizel Gebrahana. He owns a couple commercial properties around Philadelphia. He owns a couple pharmacies.
He purchased this building and turned it into one residential unit over a commercial space.
He was unable to rent the commercial space out to any tenants for about a year.
His wife opened a salon in the commercial space, and they invested a good amount of money into the fit-out.
It was a very nice salon with a good storefront, and they just didn't have enough business,
and eventually they closed, and that was pre-COVID.
uh pre-covid okay thank you you answered both my questions um excuse me
Okay, thank you. You answered both my questions.
so commercial uh any questions from the board no no no would anyone else like to testify in
this case if so please raise your hand yeah here we have a kevin brown mr brown you can unmute
yourself and speak. Mr. Brown? Yes. Actually, this is James Wright, Director of Community Development
at the People's Emergency Center. Hopped on a little bit later. Mr. Wright, would you please
identify yourself, spell your full name, and provide us with your address? I'm James Wright,
Director of Community Development at the People's Emergency Center. We are contracted by the
commerce department of philadelphia to manage the revitalization effort along lancaster avenue
uh my office address is 325 north 39th street philadelphia pa 19104 we're in the firm to tell
the truth the whole truth nothing but the truth yes please proceed yep so uh noting all the
concerns that Meredith cited. I understand the list of concerns, but we have to put it in the
context of 2020. And then also you have to put it in the context of a growing corridor, which the
city's commerce department and planning department strongly supports. And then when you think about
the revitalization effort occurring for a commercial new construction property of this level
occurring at this time. It's a difficult time period, but to permanently make that ground floor
residential could set a precedent that could create a ripple effect along Lancaster Avenue
in the most densest part of that commercial corridor. The vacancy rate prior to COVID
was a little bit over 10% as compared to the rest of the corridor, which gets up to be about
15 to 20 percent but it's changing and so we've worked um for a number of years to make that effort
uh to to make the revitalization effort stronger and we're in the middle of a planning process
funded by the commerce department to read to to re-strategize the tenanting process
on the 4 000 block the 4100 block and the 4200 block of lancaster avenue so to have this building
go all residential at one of the most prominent intersections on Lancaster Avenue and in West
Philadelphia at this time would be unfortunate and also doesn't really consider the fact that
it's a hard time for all property owners. So that's really the meat of what I wanted to get
on here and just talk about. The challenges that Mr. Pearlman has experienced are felt by other
property owners because of the context of 2020. Great. Do you have any sense of when your
plan will be final? The plan will be final by March of this year. We did most of the conversations
throughout the fall, summer and fall of last year, and the planning group that we're working with
are finalizing the document by March.
We're supposed to submit that to the Commerce Department in April.
Will there be any assistance provided to property owners going forward
as a result of the plan that you guys will be putting into motion?
So in terms of direct assistance,
all the incentive programs come through the Commerce Department,
and Commerce has been realigning their strategies in light of the COVID crisis.
to really help businesses and property owners.
We don't have specific incentives with the planning grant,
only that it really helps to come up with a new strategy for how that will go.
And, you know, just off the end of last year and in the beginning of this year,
especially with the new director of the Commerce Department,
resources are all being aligned, realigned.
questions from the board no mr chairman mr chairman yes sir it it doesn't look like
the the first floor is on lancaster avenue is really on 39th street north 40th street
north 40th street yeah uh tom like it's on a commercial strip right i was you just took the
Right. You just took the words out of my mouth. I was going to go back and ask Mr. Wright, not to interrupt you, Tom, but Mr. Wright, our board member, Mr. Holloman, was basically going down.
words out of my mouth. I was going to go back and ask Mr. Wright.
my probably my next question was uh i mean it's around the corner uh yeah and i'm looking at a
lot of other vacancies and i will well for the sake of this discussion i'll just contribute most
of those vacancies or assume and maybe i shouldn't assume but i'll assume that most of the vacancies
are result of covet so would even though this is not directly on lancaster this still would be part
of the Commerce Department's effort to put some extra commercial spaces at that intersection?
Yes, so it is at the intersection. And, you know, intersections are pretty tricky in terms of what's
on the corridor and not on the corridor. But that part of 40th Street is considered a part of the
commercial corridor, just like across the street, the old West Philadelphia Title and Trust Building
is considered a part of the corridor as well as Morris Funeral Home is a part of the corridor and
the parcel with the Dr. King mural as seen as a part of the commercial corridor so you know
Mount Vernon Street uh comes right up to 40th and it is really hard to separate that as you're
looking at the map that I don't know what the shape is that block of that between 40th Haverford
in Lancaster as not commercial. Going partway down Haverford is also commercial. The businesses
on the north side of Haverford Avenue, the 39 Spotify Avenue, are commercial.
Tom, I interrupted you. I just want to, I think that's where you were going, but do you have
anything else? Yes. Lancaster Avenue is pretty much abandoned. It's being developed, but it's
abandoned, but you would have to get Lancaster Avenue up to par before going down 40th Street.
Sir, I just want to reiterate, this is not going down 40th Street. This building sits
right at the intersection. It is no more than, it starts at the corner, and it goes no more than,
is it 30 feet past the corner? Not even to the end of Mount Vernon. That's not a full block.
It's totally visible. If you're standing, if you're standing west along Lancaster, as far as
the seafood restaurant, you can see this building. It's very much a part of the commercial corridor,
visibly, physically. It's right there. A very beautiful construction right at the corner of
40th and Lancaster. I understand, because I eat at Texas Wheaton all the time.
I would ask you, what type of businesses could you draw on 40th Street?
You said, could you draw, or did I draw? Do you project?
Well, again, I think it's unfortunate characterization of this property as being
on 40th street is definitely a lancaster avenue property you go to texas luna so you understand
it very well it's on lancaster avenue it's connected to the corridor the types of businesses
that people are looking for and we have to really think about the covid crisis and how
business environments are changing but given the level of construction that has been done you got
to think that this will be um in terms of when a new business comes so whether it be a takeout
restaurant or an office retail business we're getting a lot of feedback somebody's mic is on
and there's a lot of shuffling going on hard to hear Mr. Wright thank you yeah Mr. Wright continue
I'm sorry. Yeah, so it's as the corridor revitalizes, this building sets the precedent
for what we want it to become. As we approach other developers to look at renovating parcels
or building out on vacant lots along the corridor, this is a prototype. And so for it to go
residential on the ground floor will set a bad precedent for the trajectory. And so, and also
it's really hard to deny that this is even the way the building is situated it looks and feels
as if it's a corridor commercial building the facade is entirely open to the commercial corridor
and it faces lancaster avenue more prominently than it does 40th street um this is adam perlman
than it does 40th Street. This is Adam Perlman. Mr. Wright, if I could just interject. I really
do want to see all the best for the Lancaster Corridor, but we're talking two, five, ten,
twenty years. There's nothing concrete. All the potential businesses that could be in this space
have all looked at it. No one's shown any real interest. The intersection for the last three
years as i've been involved in this intersection is four or five churches three parking lots
a funeral home a beer distributor um and then two restaurants the texas we go the street
the other restaurant um quality they they do well but there's so in the in the in the last
five years and in the last five years hold on Mr. Wright just let Mr. Perlman finish and we'll
come right to you thank you contacted by developers who are looking in this area and
looking at this intersection constantly and I don't tell them that I'm facing financial hardships
I don't tell them that my insurance carriers dropped me I don't tell them that my commercial
lender has told me that this is a distressed asset. I tell them I have high hopes for the
intersection and high hopes for the area, but I haven't found a commercial tenant in over two
years. And people want to build across the street where the taxis are parked. People are trying to
build up near 41st and Lancaster and west on Haverford, and they can't do it where there's
a commercial requirement and they call me and i and i tell them i don't have a commercial tenant
because i can't find one but i i think the area is gonna it's on its way up i think university
city's expanding but it might be five years it might be 10 years but after two years i i can't
carry this burden on on this project anymore i don't this is my only project this is my only
commercial project. I've spent the last six years volunteering in Africa and India and the Bronx,