Waterfront Development Gamesmanship

1143 North Delaware Avenue

1143 N. Delaware Avenue

Members of the Central Delaware Advocacy Group  say developers have too often received zoning variances for projects that never materialize, leading to  a spiral that depresses waterfront development.   According to the CDAG members, it seems developers seek variances without ever intending to build.

The variances allow the developers to make significant profit by selling the land without developing it, explained CDAG member Joe Schiavo, because the ability to build higher or denser makes the land more valuable than it was under the base zoning.   “The approvals stay with the parcel, not the owner,” Schiavo said. “They are 100 percent transferable.”

“What we feel really is that there should be some legislation that says there’s a time limit,” said Member Richard Wolk. If a project doesn’t get built within that time limit, the zoning would expire, he said. An alternative would be a restriction on the zoning relief so that it applies only to the developer and the project at hand, he said.

“I think this is a practical proposal so that we can break this cycle of parcels failing to be developed again and again along the Central Delaware, or anywhere else in the city,” Schiavo said. “I think that these approvals are actually a detriment to development, because they are adding value to the land, and making the land more valuable to be sold rather than built.”

The Central Delaware Advocacy Group’s discussion was spurred by PlanPhilly reporter Jared Brey’s recent story on the status of proposed riverfront projects that  remain unbuilt, many of which received zoning approvals.

Schiavo – and others on and off CDAG – have talked about this issue for some time. Schiavo said what he’s seen over the years is that this phenomenon doesn’t stop with one developer making money on the land without building. “Sometimes the special approvals are granted, and the developer sells the land. The new owner paid more than the original owner, so to make the numbers work, he needs further special approvals. And the city often grants the additional bonuses,” which are also transferable.

“From one perspective, this is a ponzi scheme,” he said. “Someone is going to be left holding a parcel of land that they’ve paid so much for, that it is really not practically developable, in this economy in this city. That’s what happens. Projects go bust. Land doesn’t get developed.”

See:  http://planphilly.com/articles/2013/08/08/is-it-time-for-the-sun-to-set-on-waterfront-development-gamesmanship

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