Insights into Entitlements | M Square Commercial

Overview

The land entitlement process involves obtaining the necessary legal approvals to develop land
for specific commercial use. It is a key step in real estate development, ensuring that any
changes to land use or appearance follow local regulations.

Importance of Land Entitlements

• Legal Compliance: This is essential for changing land use, particularly for commercial
  development. It ensures that the project adheres to local laws and regulations.
• Project Viability: The entitlement process determines if a land deal can proceed and
  allows construction to start. It is crucial for the success of commercial real estate
  projects.

Steps in the Entitlement Process

• Pre-Application Meeting: This is an initial discussion with city planners to get feedback.
  It involves local officials like the fire marshal and utility companies to identify any
  potential issues early.
• Feasibility Study: This study checks if the development is possible and viable and includes items like performing title review, ALTA survey, environmental and geotechnical reports. It
  typically takes 90-120 days and can cost between $40k and $50k.
• Site Plan Approval: A detailed plan is prepared by a civil engineer, showing proposed
  changes and improvements. This plan is then submitted to the Planning Department for
  approval.
• Rezoning and Zoning Variances: Changing zoning laws may be necessary to fit the
  project’s needs. This includes obtaining variances for minor requirements to ensure the
  project can proceed.
• Environmental Review: The project’s impact on the environment is assessed. This step
  may involve public hearings and the creation of mitigation plans if necessary.
• Public Hearings and Community Meetings: These meetings involve presenting the
  project to local residents and stakeholders to gather feedback and address any
  concerns.
• Utility and Road Approvals: Permits for utility installations and road construction are
  obtained. A traffic impact analysis may be required to assess and manage increased
  traffic flow.
• Land Subdivisions: The process involves dividing land into lots suitable for commercial
  use. Approval is required before any development can begin.
• Plan Checks and Permitting: Detailed plans are submitted for review to ensure they
  comply with all relevant building codes and regulations.
• Final Approvals and Permits: Once all requirements are met, final permits are issued,
  allowing construction to begin.

Challenges and Risks

• Complex Rules: Navigating local zoning and regulations can be challenging, requiring
  careful planning and expertise.
• Community Relations: Managing opposition and addressing concerns from local
  residents is crucial for project success.
• Environmental and Political Risks: Projects must comply with environmental
  regulations and align with local political goals.
• Long Process: The entitlement process can take several months or even years,
  depending on the scope and complexity of the project.
  Risk Management Strategies
• Check City Plans: It is important to align the project with the local government’s future
  land use plans to avoid conflicts.
• Consult Experts: Working with civil engineers, land use attorneys, and real estate
  consultants can provide valuable guidance.
• Engage Community: Addressing community concerns and building positive relations
  with stakeholders can facilitate smoother project approval.
• Thorough Preparation: Ensuring that plans meet all local codes and regulations can
  help avoid delays and additional costs.

Benefits of Successful Entitlement

• Higher Property Value: Securing development rights significantly increases the
  property’s value and marketability.
• Development Readiness: Developers prefer land deals that are ready with all
  entitlements in place, as it saves time and resources.
• Time and Cost Savings: Pre-approved land deals save developers both time and
  money, making the process more efficient and attractive.