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284 Part V:Kicking Your Investing into High Gear
As an urban area matures over time, the citizens and their political leaders want to have more specific rules for development and construction. As a result, the local government fine-tunes the zoning regulations and procedures to deal with priorities brought up by community leaders. Sometimes, some of these new regulations may even take effect after your land development pro-ject is underway. This requires adjusting your development and construction budgets during the rezoning process as well as throughout the life of your land development project.
Coauthor Peter Conti’s parents have a small home up in Sydney, Maine, where they spend their summers. His brother works there on a dairy farm milking cows. Even though Peter’s brother’s house is on a small piece of land, his backyard view across lush green fields and trees is spectacular. Looking out off his back deck, you’d never guess this area has absolutely no zoning. This means that if someone wanted to rebuild a school bus in their front yard, there are no regulations to stop him or her from doing so. Luckily, most of the neighbors work together to keep the community looking nice. In effect, the zoning and planning departments of any municipality work like the commu-nity of Sydney works to make the best of any development that happens in their area.
You may want to take on several projects in one area omce you become famil-iar with the land-use planning, zoning, and regulations in that jurisdiction. As strapped as cities are these days with their budgets, they aren’t able to do much to help developers through the jurisdictions, regulations, or review procedures. This leaves it up to you as the land developer to understand and know the local regulations. So make sure that your project meets all the guide-lines the first time without having to go back and make multiple changes.
Dealing with bureaucrats
As soon as you have a property under contract, plan to talk to officials at the city council and planning department. Don’t waste any time. If you have the idea today, within the next day or two, you need to be in front of the planners to find out the actual use of the property and its zoning.
Tell the planners what you’re contemplating. Get their opinions, and see if they think the municipality would allow you to change the zoning to provide for different use. If you want to divide the land up into smaller lots, for exam-ple, get their opinions on whether they think it would be possible. Ask about similar projects that have either been approved or disapproved. Doing your homework early pays off.
Don’t wait until you have a deal under contract to get to know the people at city hall. Ideally, they should know you by name when you walk in the door. When talking to city council people, keep in mind that they’re volunteers who
Chapter 15: Land Development: The Heart of Commercial Real Estate 285
have normal jobs. Take them to lunch, run your idea by them, and ask, “What do you think the members of the city council will think about my idea? Will they like it or not like it?” If the councilperson says, “We hate this idea,” the proposition will never get passed when it comes time for a vote.
Lifestyle development policy: An idea whose time has come
There’s a movement to create lifestyle com-mercial and mixed-use development through public policy and land use ordinances. Instead of just developing property to make a profit, the idea is that everyone works together to have a nice place to live and meet the needs of the community.
This concept is based on the following lifestyle development principles:
U Efficient use of land resources:This means that, especially when developing in urban areas, the development is compact, using only as much land as necessary.
U Full use of city or county services: This requires planning developments in order to fully use existing and planned services.
U Mixed use:Mixed-use development brings land uses that are compatible closer together. An example would be a shopping complex that includes condos on the second and third floors.
U Transportation options:Wouldn’t it be great to live somewhere where you could get around by walking, bicycling, or using public transit? It seems like everyone riding around in cars is a throwback to the Old West when everyone had his own horse.
U Detailed, human-scaled design: Lifestyle design means the development is attractive, design-friendly to pedestrians, and takes
into account the community’s character and history.
These principles make up smart ways of build-ing a community because they provide benefits to everyone who lives there while making intel-ligent use of financial and natural resources. Lifestyle development helps support most states’ land use and transportation policies. It also provides a number of benefits including:
U Economic development and improved tax base
U Revitalization of downtowns, main streets, and neighborhood centers
U Housing that’s close to jobs and services
U Job creation, allowing people to walk to work
U Choices for transportation and the ability to connect between different methods of transport
U Communities in which people can actu-ally walk rather than drive (Wow, what a concept!)
U Reduction of that hated bumper-to-bumper traffic
U Ways to use existing urban services and facilities, instead of continuing to expand into new areas
U Energy saving by not relying as much on cars
286 Part V:Kicking Your Investing into High Gear
If after hearing several different opinions you’re still being told that your idea won’t ever get through, you have your decision right there. All that negativity makes it easy to decide not to move. Either come up with a project that the council likes or find a different piece of land. Whatever you do, don’t fight city hall.
Avoiding neighborhood opposition
One of the most important keys to getting your land development projects approved these days is making sure that you’re going into an area where people will approve of your project idea. This means working with your prospective neighbors rather than against them. Conduct some investigative meetings to get their suggestions. Doing this can go a long way toward avoid-ing mob-type crowds who get mad and want to kill your deal. Get to know the leaders and people in the community as much you can. If you get a feel for how they want to develop the area, you’ll be much more successful.
Because the process of dealing with your neighbors is going to differ in every municipality, predicting what can happen is difficult. But here’s a good exam-ple: Before filing an application, the land developer provides written notice to neighborhood associations and the municipality. After the application is sub-mitted, the following procedure is used to notify neighboring property owners and the neighborhood association of the pending application and the upcom-ing public hearing on the application:
1. The zoning staff posts a sign.
At the time of application, the zoning staff provides a sign to the land developer indicating the time and place of the public hearing. The sign is required to be posted on the property that’s the subject of the public hearing.
2. Notice is given to the neighborhood.
Following the submittal of the application, the planners send a notice to the neighborhood association saying that the application was submitted and indicate the pending public hearing dates.
3. A public hearing article is printed in the newspaper.
Public hearing notices are typically published in the local newspaper, which carries legal notices.
4. Notices are mailed to property owners and occupants.
Ten days before the public hearing, the planner’s staff sends a notice to the neighborhood association and all property owners and occupants or residents within 200 feet of the perimeter of the property subject to the public hearing.
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5. A public hearing is held.
A public hearing is held by the commission or agency that has final authority to approve or reject the request for rezoning or development. Depending on the area, you may need to deal with one, two, or some-times even more agencies.
Our bold challenge to the press
Because we have been called the “World’s #1 Greatest Commercial Real Estate Mentors,” it’s not a surprise to anyone that we get attention from two very different types of people. The first category is people like you, who are serious about taking big steps in their life and aren’t afraid to search for knowledge or guidance to make sure that you get where you want to go.
The other category contains those who say they want to do big things, but when push comes to shove, they quickly come up with a thousand reasons why they can’t do something new: I don’t have the money yet. I’m going to wait for a better time. Real estate would be great but only if I got started ten years ago. And they go on and on. By coming up with excuses to give to other people, they convince themselves in the process that they are doing the right thing by playing it safe.
We believe to the core of our being that a will-ingness to step up to the challenges life offers us is what makes champions of us all. To prove that successful commercial real estate invest-ing is really possible, we recently took the bold step of issuing a challenge to the press to prove that anyone, and we do mean anyone, can make
$1 million or more by investing in commercial land development.
After all, if your authors, a former auto mechanic and introverted engineer, can make a fortune investing in commercial real estate, then you can too. Here’s the challenge that we sent out to 3,159 TV stations, radio stations, and newspapers:
Give us a team of people who are commit-ted to going after their dreams, and within 90 days they will have a land development deal under contract and within 180 days the project will be fully underway. By the time the team is done, they will have developed the knowledge and confidence to be able to put together commercial deals on their own and they will have made $1 million or more.
We believe that the key to making things happen is in making a commitment that you can’t back down from. We have publicly put ourselves on the line and now the pressure is on. We are going to win or lose with the whole world watching us. To watch those we’ve picked to be on the challenge team in action and cheer them on, go to www.landdevelop mentchallenge.com.
288 Part V:Kicking Your Investing into High Gear
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