New Philly charter amendment, if approved, would offer legal protection to neighborhood groups

City Council President Darrell L. Clarke has granted Philadelphia’s neighborhood groups one of the biggest items on their wish list: a bill that would secure them legal protection from the city for their involvement in zoning matters.

If approved by City Council, the matter would be placed on the ballot during the primaries next April for consideration by the voters. By that time Clarke, whose term ends in January, will no longer be in office. But these kinds of ballot measures almost always pass.

“This is a really, truly remarkable step,” said Joe Schiavo, former leader of the Old City Civic Association, which was forced to disband in the face of developer lawsuits over a decade ago. “This is a remarkably positive gesture for Clarke to be making on behalf of our communities.”

When former Mayor Michael Nutter updated the city’s zoning code in 2012, his administration officially recognized neighborhood groups that get involved in zoning matters, dubbing them “Registered Community Organizations” (RCOs).

Almost immediately these organizations argued that their newly official designation should come with some form of legal protection.

RCOs are allowed by the city’s zoning code to review projects that have to go before the city’s Zoning Board of Adjustment, but advocates said that power invites lawsuits from deep-pocketed business interests if a community group opposes their project. A developer could sue as a way to scare off opposition — a “strategic lawsuit against public participation” (SLAPP) — which volunteer community organizations, especially in lower-income areas, could ill-afford.

A case in the Bustleton neighborhood gained attention this year as a neighborhood group faced skyrocketing insurance costs in the face of a developer lawsuit.

“In recent months, we’ve heard of RCOs being threatened by lawsuits from developers for not supporting [a project] or raising an appeal process,” Clarke said.

But developers argue that neighborhood groups often try to slow their projects in an attempt to delay them to death — time literally is money in real estate development — over parochial concerns like parking or anti-apartment sentiment. In some cases, they even argued that less scrupulous RCOs have sought payoffs to approve projects.

If the city provides a legal backstop for such activities, these cases could become far more common —producing a chilling effect on the local real estate industry.

“This bill gives RCOs a blank check to fight developers,” said Mo Rushdy, vice president of the Building Industry Association of Philadelphia. “If this bill passes, every single project will be appealed indefinitely, which increases development costs and the chances that nothing will get built.”

Rushdy argued the rules governing RCOs are far too hazy and, often, many different neighborhood groups compete to weigh in on zoning matters. He said that an officially recognized RCO could be just one or two gadflies in a neighborhood with no real constituency. Giving legal protection to them would be madness.

Clarke, for his part, agreed with the last part of that assessment. He said that the rules governing RCOs should be revised to ensure more accountability and transparency, along with the new legal protections he wants to create.

“One person can decide they are an RCO,” Clarke said. “There’s too much overlap in the boundaries. … As a broader conversation, there should be some reform. But I don’t believe that it’s fair for us to require that they be participating in the zoning without any support from the city.”

Although Clarke’s legislation dictates that the city will indemnify and defend RCOs on zoning-related matters that wind up in court, it leaves the exact details of the new regulations to the Law Department. That allows the city’s legal team the flexibility to set monetary caps or refuse to defend an RCO if they felt the group had been acting beyond their jurisdiction.

Historically, the Law Department has dismissed the idea of indemnifying RCOs because they feared being made to protect community groups that were acting illegally — and saddling the city with their legal costs. Clarke said giving the department more control over the regulations could solve that problem.

“It is very important that the Law Department be involved with the process because indemnification could in fact be costly,” Clarke said. “[That’s also why] there should be some reforms to make sure RCOs are qualified.”

For the Greater Bustleton Civic League, which is facing a lawsuit from a developer trying to build a large United Parcel Service (UPS) warehouse in its neighborhood, the news of the bill was cause for celebration.

“Our story terrified [other] RCOs,” said Jack O’Hara, president of the Greater Bustleton Civic League. “This is going to be really welcome news to the hundreds of our RCOs in the city. I only wish it had come a year ago.”