From Proposal to Permit: Getting Development Projects Approved

{{RELATEDLINKS}}In the war over large-scale commercial and industrial development, no city has spent more time in the trenches recently than Nashville, Tennessee. In 2010, Music City witnessed the controversial approval of a brand-new, $585 million convention center, the Music City Center, in the heart of its bustling downtown business district. Buoyed by its success, other developers pressed forward with a plan to remake the city’s old fairgrounds — home to the TN State Fair, a storied stockcar-racing track, and the state’s largest flea market — into a cutting-edge commercial office park. However, this time they met a brick wall of opposition from residents that proved impossible to overcome, and the fairgrounds project was defeated at a dramatic Metro Council meeting that drew 3,000 protesters.

Both projects enjoyed the support of Nashville’s popular mayor, Karl Dean, as well as the city’s business community. The votes to approve or deny took place within a year of one another. And yet Music City Center is scheduled to open its doors in February 2013, while the fairgrounds site sits untouched.

To the outside observer, it may look as though the city has schizophrenia when it comes to development, but the truth is that projects don’t rise or fall based on the prevailing local mood alone. Instead, every proposal is subject to a complex process that rewards preparation, outreach, and good faith — and punishes developers who expect to simply coast along on the political tide.

As specialists in “land-use politics,” we’ve fought in dozens of high-stakes siting battles related to large-scale industrial development and corporate relocations. These experiences have shown us that successful projects share a common strategy. Here are some of the ways developers and facilities planners can navigate the unpredictable approval process and come out with permit in hand.

Political Due Diligence
No large-scale redevelopment is sited without a rigorous market research assessment or a thorough environmental impact study, and for good reason. Investors want to be sure that the site’s location is commercially competitive and environmentally sound. Reliable market and environmental research isn’t just informative, it’s predictive — it dictates which projects have the best chance of success and where investment dollars would be best spent.

Multimillion-dollar facilities rise and fall on this type of research. But these facilities are often subject to political forces that can just as easily determine the project’s outcome. For that reason, we advise those seeking to develop a site to conduct a political due diligence assessment every bit as exacting as their market research or environmental impact studies. Without it, they may find themselves flying blind — not knowing whom their allies or enemies will be among decision-makers, and unable to chart the course of their project’s approval from initial announcement to final permitting.

A good political due diligence assessment provides a wealth of information about the policy landscape of a potential site. It starts with basic information. Which bodies control the approval process: applicable zoning committees, boards of adjustment, county commissions and city councils, others? What do the local ordinances say: zoning ordinances, subdivision regulations, comprehensive plan compatibility, and urban growth boundaries? What steps must you take to get to final approval: number of readings that legislation will require, the order of votes, and key vote thresholds?

A good assessment will also research key decision-makers. It will provide information and analysis on the people casting votes on relevant boards. It is important to know whom they are, what issues motivate them, and how they have voted in the past on similar issues. Quality political analysis also looks into recent history to examine the successes and failures of similar development projects, in order to better predict the likely reaction to future proposals.

The best political due diligence doesn’t just stop at the governmental and policymaking level. Instead, it also maps out the social and civic forces that often play a role in the approval process. It will detail the local business community and the best ways of securing and leveraging their support. It will identify key stakeholders whose buy-in would smooth the permitting process from start to finish. And it will point out opinion leaders, who often determine how the public perceives a project. Knowing whom these players are and what motivates them can allow a developer or facility planner to win key allies before the first permit application is filed.

Solid political analysis does more than make it easier to win required permits; it can help promote smart investment decisions. It can tell a builder which of several possible sites for a project is most likely to result in approval, avoiding the frustrating trial-and-error process. This tendency, which leads a developer to spend thousands of dollars and months of time pitching a project that will never be, increases the cost of doing business in every segment of real estate. Jumping straight to the fast-track for approval saves time, aggravation, and — most of all — money.

Understand the Opposition
It’s understandable how the project developers, economic development team, or city officials will quickly buy into all the great things a project will do for an area — revive a neighborhood, promote economic activity, or create jobs. But don’t make the mistake of thinking a project’s virtues are so self-evident that everyone else will automatically be supportive. For many people, change is scary, and big change is scarier. Developers and facility planners must understand how and why their project is likely to face hostility.

One threat to any development is NIMBY (Not In My Back Yard) opposition. Typically represented in the form of angry crowds at public forums and events, a motivated NIMBY brigade can have an outsized impact on the perception of a project. Their concerns typically revolve around diminished quality-of-life, especially as it relates to the size, appearance, or traffic impact of the project. Another oft-stated NIMBY concern is the erosion of nearby property values, which local planning boards take very seriously. This type of opposition can be sensationalist and emotional, and these opponents are also likely to be among the most passionate.

Even where NIMBY opposition fails to take root, there is often general resistance to large-scale development. In Nashville, the Music City Center received opposition from those opposed to the Mayor, rival hotel operators, and others who viewed the $585 million bond financing as too much risk for taxpayers to guarantee. This coalition proved formidable, but political due diligence and exhaustive outreach had created a comprehensive support network that was able to drown out the naysayers and secure final approval.

In the case of the Nashville fairgrounds, no political coalition-building was done in advance of the announcement that the Mayor intended to tear down an aging NASCAR track to make way for a new office park. The opposition was severely underestimated. Developers believed the promise of new commercial development would be enough to secure approval and failed to understand the history and nostalgia surrounding the track. Political winds were also blowing against the Mayor, who was viewed as too “business-friendly” in the wake of several other high-profile downtown projects (including Music City Center). In the end, the development team lost this battle, but could have won had it built a stronger support network. While it is impossible to perfectly predict the nature of the resistance to a particular development, it is important to take the time to try to account for it ahead of time. Understanding the concerns of opponents, NIMBY or general, is how smart developers are able to tailor certain elements of their proposal to address those worries before they become full-fledged liabilities.

The first public proposal of a project should already have taken likely vulnerabilities into account. Further, facility planners should be especially attentive to concerns in the first months of a project’s rollout and should be prepared to compromise, when possible, if doing so avoids the creation of an entrenched opposition.

Next: Run an Outreach Campaign

{{RELATEDLINKS}}Run A Campaign
With an understanding of the political landscape and sources of likely opposition, developers are in a far better position to introduce their project to elected officials and the public.

The project’s rollout is a critical first step and should be accompanied by charm offensives targeting key opinion leaders previously identified in a due diligence assessment. Often this entails one-on-one meetings with reporters, bloggers, editorial boards, and leaders of civic and trade organizations. At these meetings, the project’s designated representative should deliver a clear and concise set of talking points that encompass the basics of the project, the benefits it will bring to the community, and the ways in which the project planners have preemptively addressed or mitigated local concerns. This information should also be made available on a well publicized website and via a social media campaign.

Having introduced the project, the hard work of coalition building begins. Bring on board as many organizations and associations as possible — the local chamber of commerce is a good place to start in many communities. However, smaller and more civic-minded groups are also important to include for encouragement. Their support lends a local, neighborhood-friendly imprimatur to the development, and they will often buy in once the project team takes the time to ask for their input. Also critical at this time is arranging for personal conversations with abutters and residents close to the project site; these individuals could form the core of a NIMBY opposition group if ignored. While some nearby residents will be immovable, some will be genuinely receptive if they feel their concerns are at least being acknowledged and mitigated.

The point of all this coalition building is to have a ready-to-deploy army of supporters and advocates for key meetings and public hearings related to the development’s approval. At critical junctures along the path to a permit (which should already have been mapped out in a political due diligence report), it will be vital to turn these supporters out to speak in favor of approval.

This process creates a virtuous cycle, in which positive media coverage begets easier coalition building, which begets strong supporter presence at hearings, which begets positive media coverage. This was the process that Volkswagen undertook in pushing for a 1,900,00-square-foot auto assembly plant in Chattanooga, Tennessee, in July of 2008. This past May, the facility celebrated its 100,000th Passat rolling off the line.

In Sum
To the casual observer, it can sometimes seem as though development approval is dictated by roulette wheel, where projects are permitted or rejected irrespective of their technical merits. This is half true. Developments don’t succeed solely because of a sharp business plan or intelligent design. Indeed, we’ve observed many such well-planned, economically beneficial projects come out on the short end of a 5-4 vote. But the approval process is not random.

Instead, permits are allocated through a system in which politics, strategic communication, and public education are sometimes more important than site plans and economic studies. Learning how to navigate the political pressure points impacting the development is the way that large projects will win in the years to come.