SEA ISLE CITY - When Chris Glancey bought Diamond's Liquor Store on Landis Avenue in 2003, he planned to rebuild the century-old structure that was once a butcher shop.

The store, which had four apartments above it, was torn down last fall, rebuilt and reopened in May. Now, the building includes a take-out restaurant on the ground floor and 11 condominiums above.

Diamond's Liquor Store and three other businesses in the city so far have used a 2008 change in the zoning law that allows them to rebuild commercial properties while adding more residential space.

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"I think it's a great plus for the business community," Glancey said. "It encourages everyone to rebuild their stores and to keep stores in the commercial district. The value of residential properties is so much higher."

Seeing a business district eaten away by residential developments, City Council two years ago made a substantial change to its zoning law to entice businesses to stay put. The carrot? The option to rebuild apartments or condos above redeveloped commercial storefronts. Meanwhile, the zoning changes forbid entirely residential buildings or duplexes in business districts, which were previously allowed.

Since 2008, four buildings have been demolished, leading to 13 new commercial spaces and about 45 residential units, data from the city's construction office show.

A fifth building - a former hardware store on Landis Avenue destroyed in a 2005 fire - has Planning Board approval but has not started construction.

"We were losing our commercial district," said Neil Byrne, the city's construction official. "This ordinance was brought in to save our commercial districts, which I believe we've done a pretty good job."

Yet the change has other effects.

Mayor Leonard Desiderio, who said the zoning change has helped the city, said it also has added to parking problems. Those problems will persist, particularly as owners of larger lots are encouraged to rebuild.

"The commercial properties under the ordinance do not need any off-street parking spots. And the condos above are coming in with one or two spots per unit. No one has one car," Desiderio said.

By basing the number of condos on the size of the lot, larger, landmark structures - including the block-long Busch's Seafood Restaurant at 8700 Landis Ave. - offer lucrative returns because they allow the most residences.

Busch's had a contract to sell the seafood restaurant at the end of the season to make way for a development of two new restaurants with condos above them. Glancey, who was one of the proposed buyers, backed out after he said he could not find other restaurants to fill the retail space.

Desiderio said it remains important that the added retail space created by the new construction remains occupied.

When the city was considering the zoning changes in 2007, it wanted rows of shops next to each other for pedestrians, City Council President Mary Tighe said.

"When you're in the commercial district and you're walking, we don't want big gaps in the commercial. We want people to window shop, basically," she said.

Tighe said the city is considering some changes to the zoning ordinance, including reducing the minimum square footage of the commercial units.

Glancey said he has sold all but one of the newly built condominiums, which he said are more attractive - with price ranges in the $400,000s - and more affordable.

The new building is more handicapped-accessible and has an elevator.

"I've sold two units to people in wheelchairs because the units have to be handicapped-accessible. It's adding a new product to the residential market we didn't currently have," he said.

Contact Brian Ianieri:

609-463-6713

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