Thursday, September 30, 2010

Due Diligence Report- Regulatory Section

9. Entitlement, Approval and Permitting Processes


The most important section of the regulatory analysis is the understanding of the plan review and approval process required by local government. Each local municipality has their own unique approach to assessing development applications. Most developers will indicate that a project schedule and the success of the project are pre-determined during the regulatory review process. Time is money and delay during the review process is not uncommon which only adds to the cost of developing land.

The zoning entitlement process is typically a different time line than the approval of project plans based on approved zoning. The rezoning process may take longer and may have a defined set of dates in which milestones must be achieved, i.e. community meetings, informal staff consultations, etc. This schedule can’t be modified since it is cast in stone by the politicians at the beginning of each calendar year. The rezoning time line will change by one month later if there is a problem with the rezoning application. Rezoning property is high risk with a high reward. Soft costs required to rezone property can be significant without assurances of obtaining approval. Take advantage of any informal meetings with the politicians, neighbors, and staff to understand their points of view.

This section should also include a contact list for the stakeholders involved in the rezoning process.

The review and approval of development plans may not be as stringent or legalized as the rezoning process. Obtain applications, fee schedules, and outline of the process which may indicate a specific submission date before the Planning Board will act on the application. Or the municipality delegates plan review approval to the staff and a time frame is provided in which the staff must act on the application. In either case, the time line may be expedited and include this option in the report. Provide the local regulatory time line, steps for approval and the contact list. The contact list may be different from those involved in rezoning cases.

Besides the written procedures, find out about Board traditions and any “unwritten” nuances exercised during the regulatory process. Summarize the findings because “this is the way we do things” will directly affect the project schedule and possibly add cost to the project. Remember the developer’s motto: “Be on time and within budget”. Following the regulatory plan review process exactly without alteration and with quality plans will minimize the time government takes to issue permits and approvals.

Wednesday, September 29, 2010

Due Diligence Report - Regulatory Section

8. Regional, State, and Federal Regulations


Compliance with local regulations does not necessarily ensure approval. Many local regulations are in conflict with regional, state and federal regulations. Other agency regulations may take precedence over local standards and/or regulations. During the due diligence period, the regulatory map and site characteristic research should indicate which agency may have jurisdiction in permitting the project. At each level of government, more fees and review time will be required to obtain approvals. In most cases, the permitting process for regional, state and federal agencies is not contingent upon local approvals. But the local approval is contingent upon obtaining ALL permits. It is the responsibility of the owner to obtain all permits that may be associated with the development of a site. As an example, the applicant may have to obtain a letter from another agency that simply states “no interest” in the project. Do not misjudge the importance of knowing the regulations and time line of the following agencies. At least know their overall regulatory charge and permitting time line.

Of the following agencies, an applicant should at least expect review and permitting of the project by the Soil Conservation District, State EPA, and the Corps of Engineers. Time is of the essence so learn how each agency will affect your project schedule.

REGIONAL AGENCIES
Soil Conservation District
Watershed District
Coastal Agency
Transportation District

STATE GOVERNMENT
Department of Transportation
Department of Environmental Protection

FEDERAL GOVERNMENT
Corps of Engineers
Environmental Protection Agency
Housing and Urban Development

Tuesday, September 28, 2010

Due Diligence Report - Regulatory Section

6. Stormwater Management Facility Requirements

Stormwater management facilities control the quantity of stormwater runoff leaving the property. To summarize, this requirement states that the quantity of runoff after development must not exceed the quantity of runoff leaving the site before development. You do not need to know the technical approach to accomplish this task but you need to understand the local municipal regulations on the design preferences, operation requirements, bonding, as-built requirements, ownership, and maintenance provisions. Stormwater management facilities use land suitable for buildings, etc. to control the quantity of stormwater runoff. Thus, the net buildable area will be reduced based on SWM requirements. Some provisions of the local SWM regulations may include: fencing, landscaping, maintenance access drives, location, and turnover procedures.



7. Best Management Practices

As stormwater management facilities control the quantity of stormwater runoff, best management practices, BMP, control the quality of the stormwater runoff prior to leaving the site. Again, there are numerous ways to achieve the water quality standards but the local regulations will outline municipal preferences, construction standards, operation, ownership, and maintenance requirements. BMP’s will require land for installation and the cost of installation may be high. More importantly, know their regulatory approach to construction inspection, as-builts, bonding, maintenance provisions, and the turnover process.

Monday, September 27, 2010

Regulatory Section - Due Diligence Report

5. Land Development Regulations

In addition to the zoning map and regulations, the land development document enforced at the local level provides a comprehensive set of standards and criteria governing project design. It is important to obtain a copy of this manual to understand the development attitude of the community. In many cases, local municipalities have not modified their criteria to correspond with new sustainable planning approaches. Investigate the process in which standards can be changed to match the design intent of the project. Design waivers are not uncommon and the Town Engineer may have the authority to revise standards for specific cases.

The land development manual will address the technical criteria needed to design a subdivision or site plan based on the uses permitted in the jurisdiction. The standards are imposed for public right-of-way and for private site development. All infrastructure design elements of a project are outlined in this document and their approach to development has a direct relationship on the cost of development. As an example, this document will provide road widths, number of parking spaces required for retail commercial buildings, street light standards, drainage inlet designs to performance bonding requirements. Every provision in the land development ordinance will have design and cost ramifications.

Many land development ordinances also refer to other documents for reference. Other agencies or departments within the municipality may be responsible for certain elements of the infrastructure design, construction and maintenance. The most common is water and sewer. There may be a separate manual for water and sewer facilities and obtain a copy of this document as well.

In addition to infrastructure design standards and criteria, the land development regulations may address the regulatory review process. This process may consist of applications and forms to be completed with each plan submission. A time table may also be included for government to act on a submission. A specific time line for review and approval of land development projects may be included and it is important to understand this procedure.

The land development ordinance is an important reference throughout the project development process, construction and facility turnover. Know and understand this document because the provisions outlined will have a direct affect on the schedule, design and cost of every type of land development project.



Residential Street Standards - width of streets to horizontal and vertical design criteria
Commercial Projects including access road widths to the required number of parking spaces


Thursday, September 23, 2010

Due Diligence Report - Regulatory Section

3. Dedications, Easements and Encroachments


Research the land development ordinance for requirements associated with the dedication of additional land for the existing road rights-of-ways that boarder the property. Also, understand the width of easements required for water, sewer, and drainage facilities extended beyond the public right-of-way. The easement width will be an encumbrance on the property or lot. For a single family lot layout, the width of easement should require an evaluation of the lot width with the easement. The goal would be to have easements located along property lines and the width of the easement on each single family lot should be less than the side yard setback. If a boundary survey is available for the property, review the property lines for any encroachments from adjacent land owners, i.e. fences, structures, etc. Review the encroachment(s) with the local zoning official and determine an approach to correct the problem.

4. Road Access, Offsite Road Improvements & Onsite Road Circulation

Regulations and regulatory staff influences will be imposed on the property layout by dictating access locations to the frontage road and connectivity to adjacent parcels. It is important to understand these issues prior to proceeding with conceptual land plans. The access location to the frontage road will be based on sight distance and safe turning movements. The location of the access may not be consistent with the development program for the property nor be the best “marketing window”. The condition of the frontage road may not be consistent with current standards and improvements may be required. Know the requirements for offsite road improvements to determine costs and to determine the impact on the development potential. The onsite road circulation pattern will be guided by the access location and connectivity which is beyond the site constraints.

Wednesday, September 22, 2010

Due Diligence Report - Regulatory Section

1. Current Rezoning Applications


During the site analysis phase, adjacent properties will be researched for proposed uses and assessed for the quality of the current use, design, and condition. Adjacent properties will impact how the PIQ is developed. Visit the local Planning Department office and meet with the senior planner. The goal is to review current rezoning applications in town and review any past rezoning cases which match the development program for the PIQ. Also, review any rezoning applications approved or denied on any property with a similar use as the PIQ and certainly for any properties in the immediate area. This is important to understand local governments view on development patterns and what conditions are imposed on applicants.

Discussing the rezoning cases with the Planning staff will give you insight on how the regulators think and how the local politicians react to a development proposal. The goal of any project is to obtain local approvals from the regulators and politicians. Understanding their perspectives on developing land is essential to the overall success of the proposed project. Including this information in the site analysis report will provide valuable insight for the client to make an informed decision.



2. Development Impact on Services & Existing Infrastructure

Most residential and non-residential projects have an impact on existing municipal infrastructure and services. In most jurisdictions, the size of the project in area, units or building square footage proposed will trigger the need for impact studies. The intent is to assess government service areas and the existing infrastructure and its capability to absorb the development potential of the project. An assessment of services may include, fire and police protection, solid waste pick-up, schools, recreation elements, etc.

The existing infrastructure i.e. roadways, intersections, water availability, sewer lines and drainage facilities should be assessed to determine if the proposed project will impact the infrastructure. To provide a remedy to adverse impacts, the developer will pay for improvements or contribute their fair share to any improvements required as a result of the project. The intent of this analysis is to define and budget for anticipated costs during the due diligence period.

Tuesday, September 21, 2010

Regulatory Section of the Due Diligence Report

To investigate the development potential of a site, research local, regional, state, and federal regulations and determine the impact these regulations will have on the development potential of a site. Assess the complexities of these regulations and calculate how:

1. The time obtaining approvals may affect the transaction, financing, and market entry
2. The costs associated with regulatory compliance affects the project proforma
3. The net development area of the site and yield is reduced by government regulations


Concentrate on local regulations since every jurisdiction approaches real estate development control differently. A municipality will stress certain regulations based on their experience level and many requirements may still be open for interpretation. This section of the due diligence report highlights current technical conditions imposed by government which most likely will affect the development potential of a site.  














I will explain each of the following investigative tasks in subsequent blog posts.

1. Current Rezoning Applications
2. Development Impact on Services & Existing Infrastructure
3. Dedications, Easements and Encroachments
4. Road Access, Offsite Road Improvements & Onsite Road Circulation
5. Land Development Regulations
6. Stormwater Management Facility Requirements
7. Best Management Practices
8. Regional, State, and Federal Regulations
9. Entitlement, Approval and Permitting Process

Most local regulations have not been updated at all and especially not to reflect new development patterns. Real estate development leaders should present horizontal and vertical mixed use regulations to local politicians and regulators.

Monday, September 20, 2010

Senator Dodd’s Last Goal

Senator Chris Dodd will be retiring in January and has earmarked his “Livable Communities Act” to achieve passage of his legislation before he retires from the Senate.

This legislation passed the Senate Banking Committee 12 – 10 along party lines.

The House Bill H.R.4690 needs a committee vote to move forward.

The senate will most likely debate the Livable Communities Act this fall – stayed tuned for some fireworks.

Wednesday, September 15, 2010

Residential Projects Come Back in 2011


Residential Land Development Practices, Third Edition, Published by ASCE Press, 2008.

This is a practical manual on developing land into finished lots. Although the market may not be the best for new residential construction, it is time to start planning for new residential projects. Learn the basics of the residential land development industry for future business opportunities.

Tuesday, September 14, 2010

Land Development Book On Mixed Use Projects

Fundamentals of Land Development – a Real-World Guide to Profitable Large-Scale Development, published by John Wiley &Sons, 2008.

The future of real estate land development will focus on horizontal and vertical mixed use projects providing a destination for people to live, work, shop and play. This book outlines a step-by-step approach in developing large scale projects.

Monday, September 13, 2010

Seminar in Atlanta September 16 & 17th

The Sustainable Land Development – Ensuring Growth in a Green Economy seminar will be held at the Hotel Midtown Atlanta Hotel. This 2-day seminar will address the following topics:
  • Land Development Industry Overview
  • Sustainable Land Development Projects
  • Low Impact Development
  • Leadership in energy Efficient Design
  • Mixed Use Community Design Case Study
  • Vertical Mixed Use Projects
  • Land Development Engineering Opportunities
  • Social Networking for Land Development Professionals
  • Diversification & Profit Centers
  • Cluster Land Planning Hands-on Exercise
 Next scheduled seminars in Boston and San Antonio. Ask for details.

 

Friday, September 10, 2010

5-Reasons to Buy a Home

Jennifer Phipps published an article on 8/31/10 outlining the 5-reasons it is still a smart move to buy a home.

1. you are your own landlord
2. paying principal on your mortgage is a forced savings
3. fixed rate mortgages never rise
4. live in areas with good schools
5. most homes with 3 or 4 bedrooms located in good locations with good schools are generally owner occupied and not available to rent

Thursday, September 9, 2010

Stat to Highlight

23,244,000 Small Business Firms in the US

In August 2010, 23,244,000 small businesses generated 67,000 NEW jobs

Wednesday, September 8, 2010

“Uptown” Charlotte, NC

Charlotte, NC, the economic engine for the region, has seen steady employment growth over the years. Charlotte is also becoming a nationally-recognized destination supported by a thriving convention and hospitality business. More than one billion has been invested in the arts, cultural and entertainment venues. “Uptown” and the South-end have become vibrant residential areas and many national companies have their headquarters located in Charlotte.

Charlotte’s 2020 Vision Plan received input from many citizens and organizations. It is an innovative ten-year growth, development, and urban design plan for the Center City (“Uptown”) area. It is a blueprint for not only development growth but also economic, public and investor growth.

Center City is not just about businesses, it is also about culture and places for fun attracting all ages. Special and cultural events continue to draw thousands of visitors each year. Two websites www.findyourcenter.com and www.charlotteculturalguide.com detail all of the many options available to those who are looking to experience all that Center City Charlotte has to offer. “Uptown” Charlotte is the home of the NBA Bobcats and the NFL Panthers!


Tuesday, September 7, 2010

Smart Growth Public Infrastructure Policy Act

This legislation was signed into New York State law by Governor Paterson on August 3, 2010.

In essence, this bill is based on smart growth principles aligning state infrastructure improvement funding with decisions discouraging sprawl, expensive road improvements and utility extensions. Each state agency classified as a “State Infrastructure Agency” must establish an advisory committee consisting of environmental and community stakeholders which will prioritize state projects based on the following criteria:

1. Promotes projects in areas with existing infrastructure

2. Utilizes existing infrastructure over an expansion of infrastructure

3. Protects the State’s natural and historic resources

4. Encourages mixed use, compact development, and affordable housing

5. Provides transportation choices

6. Reduces the reliance on the automobile for mobility

The legislation also provides for the coordination of planning efforts among all local planning efforts. And, the State will ensure “predictability in land use and building codes”.

MY comments: Why is New York passing this legislation now? In my opinion:

The “Livable Communities Act” provides the framework and funding for States to move forward controlling future residential and non-residential developments. Many of the 40,000 municipalities, county governments and state governments are out of money. They can’t maintain their existing infrastructure. NY State wants to control and limit infrastructure expansion.

Based on the housing “bubble”, energy, jobs, and “sustainability”, municipal governments will pass similar ordinances limiting and altering development patterns. Local and state governments will seize the opportunity to change how land is developed in the future because the opposition to such an effort is in total disarray and trying to survive. And in return, the community and environmentalists are proactively engaged using residential and non-residential development as the reason for our economic problems – not the financial sector.

The wave of change is here. Local municipalities will pass simple non threatening ordinances mirroring the “Livable Communities Act” without strong opposition and with community support.

Friday, September 3, 2010

828

On 8/28/10, we were able to attend the Restoring Honor rally in Washington DC. It was not a political rally and the event left a lasting impression on me. It was not so much the speakers but the people from all over the country.

I have always believed that you can’t change a personality. It certainly holds true for the reporters and journalists describing the event. Most of the main stream media did NOT accurately depict the nature of the event, the character of those attending, and the need for the event. Their reporting was not only inaccurate it was a distortion of the facts through personal views. They will not change – you can’t change their personality.

Not only are we in economic difficulties but we are in social upheaval because of how society thinks and not how they look. Restore honor one person at a time. Those personalities that can’t and will not change leave them behind to watch and wonder.


Thursday, September 2, 2010

When did a "HOME" become a "HOUSE"?

Article on Rethinking Homeownership in September issue of TIME magazine. Typical throw-away society - perhaps put this issue in an apartment and go buy a home! 
A some point in time, the media labeled a home as an investment. The public started to view a house as they would stocks and bonds. They forgot about raising a family in a home.  
A home provides a sense of community, stability and strengthens personal responsibility. 
Pride of Ownership
Home Sweet Home 

Wednesday, September 1, 2010

“Livable Communities” Legislation in Perspective

This 63 page legislation sponsored by Senator Dodd and others is intended to have the federal government guide or influence how local communities are developed in the future.

I have spent the last 2-weeks reading the legislation and posting the salient points for your own review and analysis. Communities plan for future growth through the master plan process. The federal government will provide GRANTS to planning agencies and municipalities to reshape their plan on how their community will grow in the future. Their emphasis will be on transportation, location, energy, and preserving undeveloped lands.

Without a question, this legislation will change the real estate development landscape for years to come. Remember, the real estate development industry is a fragmented industry spread over 40,000 municipalities. Once the local master plan is changed due to federal government influence, the ability to alter the local plan will not occur for another 5-10 years.

This is the first federal legislation that I have read in its entirety. I have to admit that it is scary to think that there is a group of people that actually think this stuff up and they sincerely believe they should change the way we live. Government would not be my first choice to guide my life, my profession, and my beliefs.

Truly scary is the fact that this bill is ONLY 63 pages in length and there were significant issues – almost on every page! Even some of the definitions were troublesome!

In comparison:

The Financial Reform Legislation signed into law is 2,300 pages in length.

The Health Care Legislation signed into law is 2,700 pages in length.

Need I say more ……………………………………………….....?