Summary: Commercial property purchase and development require entitlements. Entitlement approvals secure your investment. Permission to build may be time-consuming and complicated, but it’s worth it. Have entitlement issues? Here are tips.
Entitlement in the context of commercial real estate refers to the permissions a municipality provides for the legal development of a parcel of land or the renovation of an existing structure. Their permissions come from a wide array of authorities with jurisdiction, such as boards for design review and homeowners’ association boards, as well as departments for the municipal, county, state, and federal levels of government. When developing an undeveloped plot of land or property, you will need to obtain entitlement approval from whoever has the jurisdictional control to allow it.
Let’s look at some common entitlement application issues.
Maintain a Valid Permit at All Times
Regardless of the zoning regulations, certain areas have been earmarked for certain types of activities. If you run into a problem such as this one, you might be required to present a request regarding the user or the project at a public hearing. During this hearing, nearby residents and businesses will have the opportunity to voice their concerns and ask questions regarding the user or the project. Before you can begin construction on a property, you will need to have a building plan and a permit to do so. This is true regardless of whether a jurisdictional or design review is performed. This step is performed only when the necessary zoning or rezoning permissions have been completed. Permissions also shield you against renovations that violated the building code that was completed on the property before it was sold. If you’re not cautious, you could acquire a house that breaks regulations and have to spend more to rectify problems the previous owners caused. The issuance of permits is a method for ensuring that commercial properties take the appropriate precautions regarding design to maintain safety and order in their respective areas.
Zoning And Rezoning Permissions
It’s possible that a local development plan won’t let your project move forward; if that’s the case, you’ll need to petition the planning commission or the city council to make changes to the zoning code. Ordinances might not be relevant to how people utilize land today; thus they might need to be updated. This procedure may be straightforward; nonetheless, it is entirely up to you to persuade your local planning board or city council as to why they should accept your proposed zone shift. When a particular user has the potential to affect the general public in the surrounding area, a Conditional Use Permit (CUP) may be necessary. When designing quick-service restaurants with drive-thrus or buildings that will have a large outside patio, CUPs are typically used in a lot of the construction. The local authorities will want the public to have a say or invoke any mitigation measures before construction begins since the establishment’s creation of noise and traffic flow could influence the neighborhood adjacent to the establishment.
It Is Important to Pay Attention To Environmental And Technical Investigations
Particular studies carried out by the planning department have the potential to uncover dangerous circumstances and slow down the development process. This could involve environmental site evaluations, traffic impact studies, acoustical studies, biological or wetland delineations, cultural and archeological studies, and studies to establish how the project would influence the neighborhood immediately adjacent to the construction site. Your project and its proposed design may also require approval from the local government, as well as the local utility providers, fire agencies, parks and recreation departments, and public transportation systems. In most cases, the project’s approval will be left up to the discretion of the board of supervisors or the city council. If the proposal is seen in a bad light or if it does not comply with the current general plan for the use of property, the commission or council will almost certainly vote against it.
You Should Be Prepared for The Charges
Your local jurisdiction and the project’s scope will both play a role in determining how much it will cost to acquire the necessary entitlement approvals. When comprehensive environmental mitigation is required, the costs may range anywhere from a few thousand dollars to hundreds of thousands of dollars. The local planning department where you live ought to be able to supply you with a list of the charges associated with the land entitlement process with that municipality. Talking about this matter in advance with your city planner and attorney specializing in land use will help you determine your budget.
Expect Delays
Applications for entitlements are looked at by the planning department, which also takes some time to process due to the meticulous inspections that are performed on the applications. The process could take a month or several years to complete, depending on the size of your project. It is needed that studies be carried out, and independent consultants are the ones who carry them out. These studies must investigate anything from air quality to transportation concerns. There is a possibility that your project could be rejected or put on hold and that you will face roadblocks such as new legislation or stringent zoning codes.
During the shutdowns that COVID-19 caused, several jurisdictions were facing staff shortages since their employees were not prepared to work remotely, despite the fact that a significant portion of their work involves interacting with the public and holding public hearings. Because of the ongoing delays, the hearings had to be moved to virtual platforms, which hampered the public’s ability to participate and the applicant’s capacity to communicate directly and effectively to those involved in the project. When it came time to evaluate the plans, the process, which had traditionally been carried out using paper submittals, was moved to being carried out electronically. The changes brought about by the repercussions of COVID-19 are still trying to catch up, as the budgets of many cities are still making efforts to acquire more qualified staff.
When purchasing and developing commercial property, obtaining the necessary entitlements is a very critical stage in the process. Once your investment has been approved and/or constructed, entitlement approvals shield it from any unanticipated modifications that may be made to local ordinances or variances. Obtaining entitlement approval on a property before construction is needed, and doing so can bring a significant deal of value once it is completed, although the process can be drawn out and complicated.
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