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How to Efficiently Manage the Entitlement Process

  

Going through the entitlement process for a proposed commercial property may be described as just as enjoyable as going to the dentist — sometimes worse. However, it’s necessary in finding out the real estate feasibility of your project. 

The purpose of the process is simply to gain the right to develop or redevelop property in the way intended through government approvals for zoning, design, and use.

Here’s some tips to ensure the ultimate efficiency during entitlement to get your land shovel-ready.  

 

Be Proactive

This means knowing how to identify risks before purchasing unentitled land. Investing in and developing unentitled land is extremely risky. But, partnering with the right developer leans on their expertise and thorough investigative approach to reduce that risk. 

Part of the planning portion is also anticipating the entire process taking 3-12 months, or sometimes longer depending on the circumstances. 

Another way to be a step ahead is by first familiarizing yourself with the growing challenges surrounding land entitlement today.   

 

Understand Each Step

Although it may vary across municipalities, the typical entitlement process requires submission of a formal proposal, conceptual design package, and technical, environmental, and any other applicable studies.

The local planning department is responsible for reviewing these documents against the current zoning regulations, codes, and laws/initiatives. Furthermore, it is tested for any major negative environmental impacts. The documents must be signed off on by any other relevant city officials. 

Finally, the local community needs to be informed so residents may have a fair opportunity to provide feedback or have any concerns addressed. This is where politics can either help or hurt your case.   

It is important to understand that the main challenge of entitlement is the emphasis placed on the effort to capitalize on the land supply left. 

 

Essentially, the formula is:

Price of land + value of physical fixtures + value of legal uses
=
actual value of the land 

 

Mitigate Risk

During the entitlement process, it may seem like there’s not many factors you have control of; however, there are still some ways you can work to lower the risk level. Research the needs, desires, and vision of the city or district the property is in. 

For instance, is there already a general plan or any other development plan in place that you can find? Also, review some similar, past projects in the area that were approved and denied. Find out why.  

Also, take it a step further by determining which politicians or community groups would be instrumental in influencing the project’s outcome. Then, engage the community and its leaders in economic development. Seek support from the ones in agreement and learn the reasons for the naysayers’ stance.  


So the entitlement process doesn’t feel so much like “pulling teeth” to get through, consider partnering with a preferred developer as the entitlement process takes experience and the right team to successfully navigate through any political issues, bureaucracy, and negotiations.

Commercial Real Estate Development Land Entitlement Tenant