City Characteristics Land Developers Should Avoid

The most frustrating limitation to a strong commercial real estate land developer or investor is a city that is not willing to share the vision and approve a project. No matter how great an opportunity looks on paper, if the city is not willing to work with you the project will never happen.

It is important to work with a city that has a growing population and is need of homes and places of business to support the need for jobs as well as supply products and services to the population. The city may have a future land use map that outlines the boundaries of land and has it color coded according to what types of properties may be developed there. For example, one section of land may be an office park or another section may be town homes. The city can get very specific as to the needs of the city and are sure to clearly define what it is that they need or want.

Some cities actually offer to help with some of the development such as the cost of bringing utilities to the site or offer tax incentives for the jobs that are made through the businesses that are built.

A land developer or investor will want to avoid those cities that wish to maintain the city as it is. Let’s look at three major reasons as to why a city is not open to development and will put up the red tape that is practically indestructible.

The first is that the people voted into local office are elected to keep the city the way things are. The politicians are put into office because of their commitment to keep things the same so growth and development are out of the question. They focus in maintaining not growing which is suicide for a developer. You can bet 30 acres of raw land zoned commercial will not be approved as a new mall or office park. The red tape and barriers would be so thick, that it would take years and years before a project would ever be approved- or ever approved for that matter. City officials would simply lay every obstacle in your route before they would allow such huge changes. These are the cities a land developer MUST avoid unless they want to spend 3-5 years spending money and trying to get a project approved.

The second is state law restricts local governments from planning growth. So the local government may have ideas, but the state restricts them from actually moving forward. There may be extremely strict guidelines or jurisdictions or even conflicting views between the local and state governments. And you know where this leaves the land developer or investor? In the middle running around with no real future for a project. This is where you do NOT want to find yourself.

The third is purely political. Even if city officials are pro-business and development, well-organized opposition can sway votes and cause projects to die. Maybe not with the city, but with the people in the city as well. The city officials may have an election coming up or there are strong opposing forces and any major moves may hurt their campaign and position. It could even carry to the lenders in that if they realize there is opposition, even though they could say "Yes," they will say "No," to avoid public ridicule. Politics can be a huge constraint to growth in a city.

Before moving into a city for a project, a great amount of research must be done. A great way to see if the city is open to development before you even start considering a project is to ask the local brokers and even chamber of Commerce. They will set you straight from the get-go announcing, of course the city is open to development, in fact, and we provide the incentives for the jobs that are created. Or you may get a quick, it takes a long time to even get a project approved in this city and they are very strict.

The response will be very helpful in your decision to pursue a property further. You will want to work with a city that appreciates your presence and what it is that you can provide the city- not someone who is opposed to your proposal and will do anything to keep it from happening. Use these three characteristics to help identify if a city will be open to your developing of the available land.

Specializing in commercial and investment real estate, Tony Seruga, Yolanda Seruga and Yolanda Bishop are always searching for new and profitable commercial properties across the U.S. Visit http://www.maverickrei.com for more great information.