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Hearing video

ZBA Hearing - January 13, 2021

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

There's a small vacant commercial space right next to the building on North 40th Street.

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Now, if you again look at photos of this major intersection, you'll notice that it's not terribly

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conducive to free-flowing pedestrian travel given the extensive street widths and the number of

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traffic lights that are here. You should also notice the abundance of residential uses that

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do surround this intersection, particularly some of the single-family homes across the street here

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and along Lancaster. Now the heavily commercial uses along Lancaster largely commence and continue

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along the opposing side of Lancaster Avenue. So should the board grant the requested variances,

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the proposed solely multifamily use will harmonize with the character of this neighborhood

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and will not create any disruption in the commercial block. Now the feedback that we did

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received from the RCO and the council office is that Lancaster Avenue is intended for commercial

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development, and we wholeheartedly respect that. However, this property is uniquely situated in

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such a way that makes the commercial use here challenging and undesirable. Now, if the board

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also refers to the aerial that I have up on the screen here at tab 14, you'll see a historic

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aerial of this property that dates back to 2004. I was not able to find any aerials earlier than

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this, so we do suspect that this condition likely is earlier than 2004, but this should show you

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that until the development was constructed, the property was vacant for at least the last 15

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years. I mention this only to show that by the board granting this variance, you're not taking

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away from the commercial character of this area. The property did not previously have a commercial

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use and the granting of the variance will preserve the status quo that's existed at least for the

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last 15 years. Now before we conclude, I'd like to bring Adam Perlman back just for a moment.

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Adam, as a result of the continuing vacancy, can you just very briefly tell the board

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some of the implications that you've now started to face

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as a result of the vacancy?

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Our insurance carrier dropped the project

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because I guess there's liability

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with vacant commercial spaces.

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So we were dropped from our insurance policy

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and it took me until the sixth insurance carrier

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to find someone that would carry a 10 unit over vacant commercial space and paying a significant

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premium to have a vacant commercial space. Our commercial lender that provided the commercial

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construction loan for the project, they contacted us in early December and said that even though

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we've rented out the units up above the vacant commercial space we're not hitting our debt

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service coverage ratio and they demanded we pay a couple hundred thousand dollars

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before the end of the year so we had to come up with that money and pay down our our loan because

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of this vacancy um it's it's it's unfortunate but it's there's nothing we could do except apply for

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of variance and hope that we can get residential units in there, four one-bedroom units would rent

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out in two days. So Adam, I want to just hit on that point for a minute. So when you decided to

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consider converting this, how did you come up with the four one-bedroom units? What factors

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led you to that specific breakdown? The high demand for the one-bedroom units, we rented up

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We have 10 units in the building.

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We have two of those are one bedroom units and those leased out in the first.

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two of those are one-bedroom units and those leased out in the first few days they were listed.

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We received a lot of inquiries. People were offering to put down deposits for whenever

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these would become available and being on the ground floor it's less desirable so these would

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become more affordable one-bedroom units which are in very high demand right now two blocks away

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at 38th and Lancaster they're they're asking two thousand dollars for one bed I don't think that

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if we listed it for anything we wouldn't get more than a thousand dollars for one bed maybe

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eight hundred or nine hundred so we would be providing the area with affordable one-bedroom

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apartments for tenants. Another thing that was brought up at the RCO meeting was

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lack of parking spaces. They want a busy commercial business in there, which would

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take up a lot of parking spaces for more people in the area who may or may not have cars

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because there's a lot of public transportation available, would not provide that burden on

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the community. It wouldn't cause any hardships. Okay, thank you. So just to briefly conclude,

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we do submit that these are the least minimum variances. We're not requesting any dimensional

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variances. Providing a commercial use here is just simply not viable at this time, given the

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lot history, its orientation along North 40th Street, the lack of commercial use on this side

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of a large intersection, and most importantly, given the extensive efforts that SAM has made

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with both the community and the council office to attempt to locate a viable commercial tenant

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here. The additional four units will ensure that these units are within the neighborhood

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context and will support additional density necessary to support future commercial viability

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of the Lancaster Avenue corridor in accordance with the city's goals. We submit that the units

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and lack of commercial space will not increase the local congestion given the extensive public

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transit network and the availability of Simone Street parking in this area. The proposal will

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not impair light and air or negatively impact surrounding properties nor will it place an undue

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burden on public facilities, utilities, or cause any environmental damage. We submit the variance

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complies in full with the provisions of section 14303AE of the code as it's further detailed in

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my memorandum of law submitted at tab 15. Now to reiterate, SAM sincerely respects the community

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and the city's goals for this area and I hope you've heard that today. As you heard, they were

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hoping to find a commercial tenant for the space and tried everything that they could with the

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assistance of nearly every business-oriented organization in this area. However, they

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unfortunately do not have the luxury or the flexibility to leave the space vacant indefinitely.

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Accordingly, we're asking the board to recognize the severe hardship and grant the requested

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variances today. Adam Perlman, have you heard all of my testimony here today before the board?

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Yes.

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And would you agree that testimony was true and accurate, and would you adopt it as if it were your own?

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Yes.

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Thank you.

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And with that, we would be happy to answer any questions.

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Thank you.

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The photograph you showed a few minutes ago along 40th Street that showed a commercial property adjacent to the applicants.

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Yep.

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It obviously looks like it's closed.

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The security gates are down.

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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?

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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.

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He purchased this building and turned it into one residential unit over a commercial space.

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He was unable to rent the commercial space out to any tenants for about a year.

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His wife opened a salon in the commercial space, and they invested a good amount of money into the fit-out.

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It was a very nice salon with a good storefront, and they just didn't have enough business,

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and eventually they closed, and that was pre-COVID.

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uh pre-covid okay thank you you answered both my questions um excuse me

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Okay, thank you. You answered both my questions.

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so commercial uh any questions from the board no no no would anyone else like to testify in

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this case if so please raise your hand yeah here we have a kevin brown mr brown you can unmute

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yourself and speak. Mr. Brown? Yes. Actually, this is James Wright, Director of Community Development

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at the People's Emergency Center. Hopped on a little bit later. Mr. Wright, would you please

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identify yourself, spell your full name, and provide us with your address? I'm James Wright,

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Director of Community Development at the People's Emergency Center. We are contracted by the

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commerce department of philadelphia to manage the revitalization effort along lancaster avenue

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uh my office address is 325 north 39th street philadelphia pa 19104 we're in the firm to tell

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the truth the whole truth nothing but the truth yes please proceed yep so uh noting all the

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concerns that Meredith cited. I understand the list of concerns, but we have to put it in the

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context of 2020. And then also you have to put it in the context of a growing corridor, which the

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city's commerce department and planning department strongly supports. And then when you think about

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the revitalization effort occurring for a commercial new construction property of this level

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occurring at this time. It's a difficult time period, but to permanently make that ground floor

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residential could set a precedent that could create a ripple effect along Lancaster Avenue

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in the most densest part of that commercial corridor. The vacancy rate prior to COVID

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was a little bit over 10% as compared to the rest of the corridor, which gets up to be about

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15 to 20 percent but it's changing and so we've worked um for a number of years to make that effort

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uh to to make the revitalization effort stronger and we're in the middle of a planning process

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funded by the commerce department to read to to re-strategize the tenanting process

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on the 4 000 block the 4100 block and the 4200 block of lancaster avenue so to have this building

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go all residential at one of the most prominent intersections on Lancaster Avenue and in West

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Philadelphia at this time would be unfortunate and also doesn't really consider the fact that

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it's a hard time for all property owners. So that's really the meat of what I wanted to get

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on here and just talk about. The challenges that Mr. Pearlman has experienced are felt by other

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property owners because of the context of 2020. Great. Do you have any sense of when your

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plan will be final? The plan will be final by March of this year. We did most of the conversations

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throughout the fall, summer and fall of last year, and the planning group that we're working with

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are finalizing the document by March.

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We're supposed to submit that to the Commerce Department in April.

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Will there be any assistance provided to property owners going forward

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as a result of the plan that you guys will be putting into motion?

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So in terms of direct assistance,

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all the incentive programs come through the Commerce Department,

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and Commerce has been realigning their strategies in light of the COVID crisis.

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to really help businesses and property owners.

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We don't have specific incentives with the planning grant,

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only that it really helps to come up with a new strategy for how that will go.

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And, you know, just off the end of last year and in the beginning of this year,

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especially with the new director of the Commerce Department,

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resources are all being aligned, realigned.

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questions from the board no mr chairman mr chairman yes sir it it doesn't look like

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the the first floor is on lancaster avenue is really on 39th street north 40th street

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north 40th street yeah uh tom like it's on a commercial strip right i was you just took the

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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.

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words out of my mouth. I was going to go back and ask Mr. Wright.

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my probably my next question was uh i mean it's around the corner uh yeah and i'm looking at a

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lot of other vacancies and i will well for the sake of this discussion i'll just contribute most

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of those vacancies or assume and maybe i shouldn't assume but i'll assume that most of the vacancies

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are result of covet so would even though this is not directly on lancaster this still would be part

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of the Commerce Department's effort to put some extra commercial spaces at that intersection?

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Yes, so it is at the intersection. And, you know, intersections are pretty tricky in terms of what's

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on the corridor and not on the corridor. But that part of 40th Street is considered a part of the

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commercial corridor, just like across the street, the old West Philadelphia Title and Trust Building

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is considered a part of the corridor as well as Morris Funeral Home is a part of the corridor and

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the parcel with the Dr. King mural as seen as a part of the commercial corridor so you know

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Mount Vernon Street uh comes right up to 40th and it is really hard to separate that as you're

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looking at the map that I don't know what the shape is that block of that between 40th Haverford

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in Lancaster as not commercial. Going partway down Haverford is also commercial. The businesses

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on the north side of Haverford Avenue, the 39 Spotify Avenue, are commercial.

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Tom, I interrupted you. I just want to, I think that's where you were going, but do you have

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anything else? Yes. Lancaster Avenue is pretty much abandoned. It's being developed, but it's

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abandoned, but you would have to get Lancaster Avenue up to par before going down 40th Street.

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Sir, I just want to reiterate, this is not going down 40th Street. This building sits

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right at the intersection. It is no more than, it starts at the corner, and it goes no more than,

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is it 30 feet past the corner? Not even to the end of Mount Vernon. That's not a full block.

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It's totally visible. If you're standing, if you're standing west along Lancaster, as far as

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the seafood restaurant, you can see this building. It's very much a part of the commercial corridor,

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visibly, physically. It's right there. A very beautiful construction right at the corner of

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40th and Lancaster. I understand, because I eat at Texas Wheaton all the time.

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I would ask you, what type of businesses could you draw on 40th Street?

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You said, could you draw, or did I draw? Do you project?

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Well, again, I think it's unfortunate characterization of this property as being

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on 40th street is definitely a lancaster avenue property you go to texas luna so you understand

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it very well it's on lancaster avenue it's connected to the corridor the types of businesses

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that people are looking for and we have to really think about the covid crisis and how

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business environments are changing but given the level of construction that has been done you got

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to think that this will be um in terms of when a new business comes so whether it be a takeout

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restaurant or an office retail business we're getting a lot of feedback somebody's mic is on

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and there's a lot of shuffling going on hard to hear Mr. Wright thank you yeah Mr. Wright continue

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I'm sorry. Yeah, so it's as the corridor revitalizes, this building sets the precedent

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for what we want it to become. As we approach other developers to look at renovating parcels

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or building out on vacant lots along the corridor, this is a prototype. And so for it to go

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residential on the ground floor will set a bad precedent for the trajectory. And so, and also

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it's really hard to deny that this is even the way the building is situated it looks and feels

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as if it's a corridor commercial building the facade is entirely open to the commercial corridor

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and it faces lancaster avenue more prominently than it does 40th street um this is adam perlman

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than it does 40th Street. This is Adam Perlman. Mr. Wright, if I could just interject. I really

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Mr.

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do want to see all the best for the Lancaster Corridor, but we're talking two, five, ten,

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twenty years. There's nothing concrete. All the potential businesses that could be in this space

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have all looked at it. No one's shown any real interest. The intersection for the last three

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years as i've been involved in this intersection is four or five churches three parking lots

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a funeral home a beer distributor um and then two restaurants the texas we go the street

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the other restaurant um quality they they do well but there's so in the in the in the last

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five years and in the last five years hold on Mr. Wright just let Mr. Perlman finish and we'll

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come right to you thank you contacted by developers who are looking in this area and

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looking at this intersection constantly and I don't tell them that I'm facing financial hardships

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I don't tell them that my insurance carriers dropped me I don't tell them that my commercial

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lender has told me that this is a distressed asset. I tell them I have high hopes for the

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intersection and high hopes for the area, but I haven't found a commercial tenant in over two

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years. And people want to build across the street where the taxis are parked. People are trying to

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build up near 41st and Lancaster and west on Haverford, and they can't do it where there's

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a commercial requirement and they call me and i and i tell them i don't have a commercial tenant

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because i can't find one but i i think the area is gonna it's on its way up i think university

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city's expanding but it might be five years it might be 10 years but after two years i i can't

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carry this burden on on this project anymore i don't this is my only project this is my only

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commercial project. I've spent the last six years volunteering in Africa and India and the Bronx,

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