Commercial developments and off-site improvements go together like fall and PSL's. Well, pretty close.
The point is, for many commercial development projects, there are conditions requiring work outside the property site, also known as off-site improvements. This work is meant to support a new development or at least mitigate any infrastructure issues that may come with new development.
Off-site work includes infrastructure such as access roads, sidewalks and curbs, and other supplemental utility work. And while much of this work is often necessary for a successful project, it can also be one of the most common setbacks in the commercial real estate development process.
Let's take a look at four of the most common off-site improvements that pop up in the commercial real estate development process are:
Curb, gutter, and sidewalk (and landscaping)
One of the most common off-site improvements involves adding a pedestrian sidewalk, along with curb and gutter. These can range in cost from $5,000 for a small curb area up to roughly $50,000 for full curb, gutter, and sidewalk. Sometimes these are required by a state’s department of transportation (DOTs) to be done per municipal code.
In conjunction with such off-site improvements, there will likely be requirements to include landscaping to help beautify the surrounding area. Municipalities often like to require this from commercial developers as a condition of approval because budgets might not be able to support the beautification that the local taxpayers may want.
Power poles, underground fiber, and electrical vaults are often located in areas where future driveway access is needed for a project. Relocating the utilities can range in cost and are often required by utility providers in order to get service to a building. Or they may be required in order to even have a driveway. Cost can range from a few thousand dollars to upwards of $200,000. Time ranges can also vary for these types of improvements, and can often be delayed due to inclement weather in various parts of the country, depending on the season.
Municipalities and state DOTs can require these lanes if codes require, or a Traffic Impact Study warrants them for a particular new user. Higher traffic users, like quick-serve restaurants, increase the amount of left and right turns to a site, causing slowdowns and sometimes increases in accidents. Using safety as a core concern, DOT’s can require a commercial developer to install deceleration, acceleration, or center lanes around a project at their own cost. On average, these improvements can cost anywhere from $50,000 to upwards of $150,000.
Municipalities want to beautify the center areas of the road with landscape, trees and require the land in front of the property to be improved or make a payment in lieu for the half street. These improvements are becoming more common with many municipalities. This can range in cost from a few thousand dollars to upwards of $90,000.
Municipalities may also want to beautify the center areas of the road, or require half street improvements for bigger projects. This may mean an occupant on one side of the road is responsible for half of the road’s improvement. Municipalities often require such improvements from commercial developers when they are proposing projects in areas with large amounts of vacant land and limited existing improvements.