Insights into Entitlements
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.
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