The permitting or entitlement phase lays the foundation for any successful real estate development project. Working within the complex web of zoning, environmental, and other regulations, this process determines the potential use (and potential value) of property. Always public, and often contentious, this process requires careful preparation, not only with regard to the appropriateness and design of the proposed land use but also from a public relations standpoint. Development projects, good and bad, are almost always met with skepticism and concern. To enhance the likelihood of a successful entitlement phase, would-be developers should build their team of strategic advisors early and prepare to proactively engage planning authorities and the public, often even before the plan is filed.
Real estate development typically requires a sizeable up-front investment. Engineers, attorneys, and consultants of all stripes are all part of the team required to take on the often complex and always time-consuming development process. The consequences of miscommunication or misdirection can be costly. End-users and others whose primary focus should be on their operating business are often well served to consider engaging a trusted and experienced partner, such as a development management firm, to guide their concepts toward a viable, buildable reality.
Here are a few general guidelines to keep in mind as you embark on the process with a project development partner:
Due diligence is critical. If your proposed project involves the purchase of property, you should engage the right professionals to undertake a thorough evaluation of the property. A zoning analysis to understand process/use limitations and development potential; environmental review to uncover contamination or other such concerns; an assessment of current traffic levels; the composition of soils; and the presence of wetlands or endangered species are just a few examples of the information you should generate early in the process.
Build the right team and communicate, communicate, communicate.
Listen, mitigate, and educate. Few development projects today occur without some impact on the surrounding community. For projects that are not by right, discovering the priorities and concerns of the neighborhood and other constituents, long before the first presentation, is one key to a successful entitlement process. Consider ways you can mitigate impacts such as traffic, noise, loss of open space, or drain on local resources before you finalize your plan. When the time is right, engage the key stakeholders to seek their input at a time when change is still convenient.
Property developers can count on abutters and others who view a project’s impact negatively to speak in opposition throughout the permitting process. To generate identifiable (never mind broad) public support for a project is much more difficult. Invest the time necessary to educate the larger community. Find those individuals who recognize the benefits of your project, such as more affordable housing or new jobs, and help them to understand the importance of public input throughout the process. Permit-granting authorities, such as planning or zoning boards, are influenced, often disproportionately, by those who are willing to attend a meeting and speak. However, if you have cultivated the right support, you will have also educated other community members on the importance of speaking on behalf of a project. And, of course, always ensure that your team listens and prepares measured, thoughtful response to the inevitable criticism.
Organize an early plan review. Boards and commissions, as well as planning staff, will often meet informally to review a project concept in its early stages. Listen carefully to the staff and members’ feedback to generate a list of potential enhancements, concerns, and possible obstacles. This is a good time to leverage your development manager’s existing relationships on the board to encourage open and honest feedback.
Keep it realistic. You will generate trust and goodwill if your proposal is, from day one, reasonable and realistic. Understanding your rights but also the priorities of the community are key to proposing a realistic project the first time.
. The benefit of an experienced development manager to help to guide the process and ensure that the cost/benefit equation is never out of balance should be strongly considered by any business owner or landowner who is not familiar with the process.
Build the right team and communicate, communicate, communicate. Your team is an extension of you and your project. Your team needs to understand explicitly your desired outcomes and your limits with regard to cost, schedule, utility, and the impact of inevitable public input. Consistently clear communication to the team is critical to avoid scope creep and misdirection on design outcome that can drive cost. Creating the checks and balances to ensure a viable project, while allowing talented professionals to do their job creatively, is among the developer’s biggest challenges. Having a trusted partner in the form of a development manager can be critical in controlling the process and the outcome, especially for end-users whose day-to-day experience is outside the development realm.
Anticipate costs. The early phase of a development project often entails high upfront costs. Understanding the potential for this exposure — and making sure you have the necessary resources before you embark — is a critical first step. At the same time, know that your real exposure may derive from the actual construction of your project. Site development cost is often an overlooked hazard and, too often, building construction is left as a “ballpark figure” until too late. Engage a construction manager who will, for a fee or for the opportunity to potentially negotiate your project, offer realistic assessment of your project’s cost, as well as ways to mitigate risk and address budget constraints.
Become a member of the community. Ultimately, a new building is an addition to the community. Property developers need to plan and build with the community in mind. Reach out to fellow business owners and residents in the area and gauge their concerns and listen to them on what makes the area special and important to them. Displaying that you care and that the new neighbors won’t be forgotten is a good way to win the entitlement phase and the support of the locals. This is the best way to ensure respect and understanding from your neighbors and the long-term success of the project.
Developing a new project is an exciting yet risky opportunity. The high cost of planning and design, just to obtain the proper entitlement, makes it critical that a project be viable both before and after the public review process. The benefit of an experienced development manager to help to guide the process and ensure that the cost/benefit equation is never out of balance should be strongly considered by any business owner or landowner who is not familiar with the process. Proper preparation and thorough planning are critical to turning a real estate vision into reality, and perhaps more importantly, to ensuring it is an asset welcomed by and benefitting its surrounding community.