Developers discovering underused zoning bonus for fresh food markets

When we last left the triangle lot at 601 Christian Street in January, the Zoning Board of Adjustment had rejected a variance request from developers Dan Rosin and Rafi Licht for a 48-foot, nine-unit building.

The design exceeded the site’s 38-foot height limit and unit restrictions, and didn’t meet open space requirements.

Fast-forward to March, and site plans for an even taller 53-foot, 7-unit building from the same developers received an over-the-counter permit from L&I, with no zoning variance required.

The difference? The project makes use of the Fresh Food Market bonus—a previously unused zoning bonus that awards an additional 15 feet of height to buildings that include fresh food markets.

The permit caught a group of neighbors off-guard who had opposed the project (successfully, they thought), particularly those who hoped the site would become a small park. They cried foul on Facebook, lambasting the project’s use of the bonus as invalid.

But conversations with the Planning Commission suggest that the project seems to fit comfortably within the statute’s broad language.

How does the fresh food market bonus work?

According to Section 14-603 of the zoning code—the section pertaining to uses, not zoning bonuses—buildings with fresh food markets may receive a zoning bonus. For zoning types that are regulated by height, a building with a fresh food market may exceed the maximum building height of a zoning classification by up to 15 feet. In zoning districts governed by floor area ratio, buildings with fresh food markets are allowed one additional square foot of floor area for each square foot of food market floor area within the building, up to a maximum of 25,000 square feet. And in districts where retail uses are subject to maximum floor area limits, fresh food markets can exceed those limits by up to 50% of the lot area. The first 10,000 square feet of a market’s floor area, in all cases, is exempt from off-street parking minimums.

In all cases the bonus applies to new fresh food markets as well as expansions of existing markets.

What counts as a fresh food market?

The code offers two possible definitions of a fresh food market. One is highly specific, defining a market as “an establishment primarily engaged in the sale of grocery products” with at least 5,000 square feet for sales and display of food and non-grocery products, and certain percentage requirements for space allotted to product type.

The other definition simply says it’s “an establishment in which the sale of fresh fruits and vegetables to the general public occupies at least 50% of the display area.”

A parcel the size of 601 Christian doesn’t have 5,000 square feet of space to work with, so they’re using the second definition. All the developers need to do is devote 50% of the display area to fresh fruits and vegetables, and they get the 15-foot height bonus. And there is plenty of room for interpretation.

For instance, 50 percent of the display area has to be fresh fruits and vegetables, but that doesn’t mean 50 percent of the retail space needs to be devoted to displays. A store could have just a few shelves, and of those, half would display produce. Just how much of the interior space needs to be devoted to produce displays to pass muster with the Department of Licenses and Inspections (L&I)? Could the displays be located outside the building?

Marty Gregorski, senior zoning planner at the Planning Commission, said that since zoning only governs the area inside the property line, produce displays in the public right-of-way wouldn’t count, but outdoor displays located within the property line would count.

Could a project get the height bonus if just one of its retail tenants was a fresh food market? Gregorski didn’t want to issue an official position on that question on behalf of the Planning Commission, but said it looks probable from the way the language is written.

“It looks like it could just be a portion of the building, if it fulfills the description for what constitutes a fresh food market,” he said, adding, “I didn’t write this one.”

Rosin says at 601 Christian, they fully intend to honor the spirit of the law—but the lot’s small size will require some creative site planning, and the open-ended nature of the code’s language allows some margin for this.

Where did this bonus come from?

Gary Jastrzab, executive director of the Planning Commission, didn’t immediately recall how the Fresh Food Market bonus came to be, but he reached out to a former Zoning Code Commission staffer who confirmed it was a Nutter administration initiative proposed during the preparation of the new zoning code, passed in 2011.

“During the early years of the Nutter administration when we were working on the code, the Health Department had received some funding from the federal government,” Jastrzab recalled, “and they were promoting the idea of healthy corner stores to eliminate food deserts.”

“With that concern of the administration, this provision was probably added to the code as a way of incentivizing fresh food outlets in neighborhoods in the city,” he continued.

Greg Pastore, a former member of the Zoning Board of Adjustment and Zoning Code Commission, was also unable to recall the precise origins of the bonus. He reads the intent as promoting the inclusion of supermarkets in large new mixed-use buildings, or alternatively, promoting no-frills corner markets.

Who is using the bonus?

Despite its passage five years ago in 2011, the fresh food market bonus appears to be a recent discovery in the development community. As far as anyone at the City seems to know, 601 Christian is the very first project to claim it.

“I don’t remember anyone ever using that bonus provision before in the new code,” said Jastrzab.

Word travels fast though, and already another South Philly project is claiming the bonus.

Earlier this month, OCF Realty unveiled renderings for a “big glass box” on top of their adaptive reuse project at Point Breeze Avenue and Latona—-an addition that would rise above the site’s 38-foot height limit.

A few days later, Taylor Farnsworth at Passyunk Post reported on an announcement from OCF owner Ori Feibush that he intended to open a Point Breeze Food Co-op in the building.

This piqued our interest: was this another sighting of the Fresh Food Market bonus in the wild? Yes, Feibush confirms, it is.

“I still have to go [to the ZBA] for some other things,” he said, “but I do get the relief for height from that.”

PlanPhilly is not aware of any other projects currently making use of the bonus.

No guarantees

It’s a bit unclear how enforcement of the bonus would work.

In the 601 Christian case, the developers submitted the project’s specifications to L&I, claimed the Fresh Food Market bonus, and received their permits. There was no grocery tenant under contract at the time they pulled the permits, so the bonus was awarded based on their stated intentions.

Jastrzab wasn’t sure how this would be enforced once the building is constructed, pointing out that it could be 2-3 years between when L+I issues permits and the building is constructed, and the City doesn’t have the capacity to be an omnipotent monitor. They’d be substantially relying on neighbors to report any wrongful uses.

“A developer can claim a lot of things, but there’s no guarantee that when the project is finally built that it’ll be used as a fresh food market,” he said, “Uses change all the time.”

He cited similar enforcement complications with the zoning bonuses for buildings that meet LEED energy efficiency standards, since the LEED certification is awarded after buildings are constructed and in operation for some time.

“Once that bonus is conferred upon a developer, and they don’t meet LEED, what do you do? Make them take two stories off their building?,” he asked.

The process the City has devised for the LEED bonus is to require developers to sign an affidavit with the Law Department attesting to the fact that they received the bonus, so the City has some recourse to seek damages in the event the standard isn’t met.

Still, even assuming the best of intentions on the developer’s part, lots of things can go wrong.  A deal could be lined up, but the parties fail to agree on lease terms late in the process. The tenant could go out of business. What happens then?

Marty Gregorski said if developers don’t comply with their end of the bargain, they could be denied a certificate of occupancy, and have to go before the Zoning Board of Adjustment to request a height variance retroactively in order to gain access to the building.

“They could be denied the height variance, in which case they could be asked to demolish portions of the building,” he said, “So it’s a risk on the developer’s part. If the developer likes their odds at the Zoning Board, that’s another thing.”