The Pre-Development phase identifies and evaluates project goals and objectives, and includes conducting the necessary research and analysis toward meeting those goals and objectives as well as obtaining certain governmental approvals to ensure that the project can proceed.
Project Assessment – Review of the proposed project and all pertinent documents (e.g., schedules, proposed uses, timetable, budgets, etc.) and related efforts performed to-date by client and any existing project consultants to ascertain, as examples:
- Project goals and objectives.
- Preliminary particulars of project, including the size of facility(ies) desired.
- Desired timing of project completion.
Site Selection – Understanding client’s/project’s parameters and locating suitable sites for consideration. To optimize effectiveness Consultant needs an understanding of, as examples:
- Market considerations.
- Geographic considerations.
- Demographic considerations.
- Economic considerations – this may entail Consultant preparing an “order of magnitude” budget and “backing into” the budget amount available for land.
- Desired timing for project completion (as noted above) – this may eliminate site’s requiring, as examples, Project-Wide entitlements such as rezoning, etc., or lengthy wetlands processing.
- Armed with the above information Consultant independently and via the brokerage community will attempt to identify sites for consideration.
Preliminary Comparative Feasibility Analysis – This is the first step in determining which properties, if any, are suitable for the development envisioned. This process seeks to identify any “fatal flaws” to development by conducting preliminary research on the following:
- Review of surrounding land uses for compatibility.
- Visual Inspection for any obvious Environmental issues (contamination, asbestos, etc.).
- Visual Inspection for protected plant or animal species.
- Review of development regulations, including local land use, zoning, concurrency, impact or other fees, as well as applicable regional, state or federal regulations.
- Review with utility providers for availability of potable water and sanitary sewer, electric, etc..
- Review of Traffic status – initial conversations with the applicable authorities and, in some cases, a private traffic engineer, to determine available roadway capacity.
- (In some cases) Density study to determine the potential number of units, square footage and/or general configuration (may entail architectural fee).
- Preliminary Development Schedule – prepared based on preliminary research, and is updated throughout the project (establishes the program to be utilized as the project evolves).
- Preliminary Budget – estimated (“ballpark”) costs and revenues, based upon given assumptions, for the prospective project to evaluate whether the project/property is worth pursuing (establishes the program to be utilized as the project evolves).
- Recommendations and Due Diligence budget – For those sites for which there are no “fatal flaws” we provide recommendations for specific/more in-depth Due Diligence activities (see below) once a site is placed under contract, along with cost estimates for each of said activities.
Milestone/Project Status: Upon completion of the preliminary feasibility stage any sites with “fatal flaws” are eliminated, and for the site(s) appearing suitable, terms for purchase would be negotiated.
A purchase contract would include a due diligence period during which more detailed analysis is conducted, as well as contingencies relating to project-wide approvals (further explained herein) and that if the due diligence analysis produces results which, per the client’s discretion, deems the property not feasible to be developed, the contract may be terminated and any deposits refunded to the Buyer.
Due Diligence – Site specific analysis (as outlined in the report above) to ensure the site can be developed as intended. As examples, studies include the following:
- Geotechnical – Soils testing.
- Environmental – specific to any potential development hurdles (e.g., plant species, wetlands, uplands, etc.) identified.
- Phase I Environmental Assessment – property history, and potential site contamination, etc.
- Survey – Boundary and topographic.
- Traffic Engineering – To ascertain impacts on the roadway system and status of concurrency to ensure that adequate capacity exists to handle the proposed development.
- Water / Sewer – To establish that adequate water and waste water service exists and determine costs for connecting to the systems (including line extensions, lift stations, etc.).
- Stormwater – Review by engineer to determine/confirm the requirements for stormwater treatment and discharge.
- Conceptual Site Plan – To determine if the property size and configuration is appropriate for the proposed project (may be next step from the Density study in Preliminary feasibility phase).
- Title Research – To ensure that property seller is in possession of marketable title without any restrictions or encumbrances.
- Governmental – Meetings with the appropriate representatives of the governing bodies to discuss the specific project, as examples:
- Jurisdictional Authority – Further investigation, as appropriate, into the status of a property as it relates to the permitting and approvals necessary for its development.
- Growth Management – Concurrency status, ensure that zoning allows the intended uses or what process is necessary to obtain proper zoning.
- Fees – Confirmation of the various fees necessary to develop a project, such as approval fees, impact fees, permitting fees, etc.
- Development Schedule – refinement of the preliminary schedule, incorporating a more detailed level of analysis and research.
- Proforma /Budget – refinement of the preliminary budget, incorporating a more detailed level of analysis and research.
Project-Wide Entitlements – Those approvals, as determined during the due diligence analysis, necessary to “ready” the land for the intended use(s) from a governmental perspective (e.g., rezoning). The cost and time periods associated with these approvals are depicted in the schedules and budgets prepared during the preliminary feasibility and due diligence phases.
Milestone/Project Status: Acquisition/Closing – Assuming the due diligence period indicates that the property is feasible to be developed for the intended use(s) and that the necessary project-wide approvals/entitlements have been processed and the other variables of the project (e.g., financing) are ready, then closing of the property could occur.