A creative, cost-conscious approach to land planning drives our private development team. Regardless of project size, our goal remains consistent—to make the best use of available resources and minimize construction costs. From tight budgets to fast-tracked schedules, permits, and regulations, there’s no shortage of hurdles to clear. Listen in as one of our experts shares his experience in navigating private development project planning and the construction scheduling process.
Tim West (0:19):
Welcome everyone to another Snyder and Associates podcast. We receive a lot of questions about what to expect for design and construction scheduling for a number of different project types. So we thought it’d be nice to create a podcast outlining some of the typical schedules for the majority of our projects, which usually are split between public and private projects within our development group.
Eric, we’ve had a lot of a discussion about the differences between private and public projects. Do you want to talk a little bit about some of the differences that you see in the private projects and how those are approached differently?
Eric Cannon (0:55):
Private development projects are unique in the fact that they’re not bound by city and state federal guidelines and regulations when it comes to bidding and bid laws. They’re primarily focused with the intent of a private developer purchasing property and then developing it for business and financial reasons. Really it’s a for-profit venture – time is money. They’re in the business of developing ground and either selling lots or building buildings. So their motivation and their factors when coming into projects are typically financially driven.
With private development timelines are under a different schedule, because it’s really just how fast can you go? The main factors that go into that are really several key things:
- One being annexation, zoning and land use, platting of the property. Is the property a platted lot or not? Is it going to be required to be? Where the utilities are at? Do they have to get extended?
- Then you get into the process of preparing a preliminary plat, CDs (construction documents) and site plans.
Pre-Acquisition Due Diligence is Critical for Real Estate Development (1:45)
Most of our clients are pretty savvy to be honest with you. A lot of them understand that process. Really, a lot of them get what they call ‘due diligence’. They’re going to get a purchase agreement on a piece of ground. They’re going to have it quote unquote “tied up,” where they’ve got 90, 120, 160 days to really work through the entitlement processes to make sure that the ground that they’ve bought is going to work. That it’s going to be able to do what they want to do. Are they going to want to put townhomes on there? Is that going to be possible from a zoning and land use standpoint and design or is that not going to be supported by the city? Then they have an out, then they don’t have to close on the ground, they don’t have to buy it. So, that due diligence timeline is really the key factor with a lot of our clients, knowing how much time they’ve got to to work through that process.
Tim West (2:23):
Do you see a lot of additional property research or exploration on trying to determine how those properties are aligned and what type of things are encumbering those properties?
Eric Cannon (2:36):
When we get into the process, one of the things we’re going to be looking to do is survey the ground, as we get into it. And there’s really a couple of different kinds of survey. That word is thrown around a lot where people think it’s a guy walking around with a survey rod, doing survey points and elevations, but the boundary on that as well as the ALTA survey, is the word that’s used, which is a particular survey that’s going to take a title opinion. That’s going to be something where they take the abstract or the abstractor develops a title opinion, which is going to research anything that encumbers the property. Whether it’s easements that are through the property, old railroad obstacles. A lot of times those things, you may not know they’re there. The railroad ties may have been gone for 50 years, but the railroad still has rights through there either with access easements, underlying ownership, or something.
We recommend that developers get a title opinion done, provide that to us, or give us an abstract, so we have the ability to help them protect themselves and to have that as part of their due diligence when they’re going through it.
Declaring Property Easements, Inclusions, or Obstructions
Tim West (3:32):
How long does that usually take to get that upfront property information pulled together and established with the county?
Eric Cannon (3:41):
It just depends. The title opinion is something that can be created and that may take a couple of weeks for an abstractor to do that. If it’s been purchased recently or changed ownership that has to be brought up and updated when transfer title happens. A lot of times that’s available as part of their closing from a previous owner or the seller may have it available for them. And then we take a look at that, our surveyors will go through it and are able to determine easements and any inclusions or obstructions to the property pretty quickly within a week or so.
Majority of the properties there’s no problems, 95% of them. And a lot of them are either platted lots that you can look on the county assessor’s site or the recorder’s site and find that information out pretty quickly. That’s a lot of the preliminary work that we’ll do for somebody.
The majority of the time it’s clean and it’s not an issue, but every once in awhile it is, and it can be a real big problem, especially if it’s a railroad because it could take years. We’ve had projects where it’s held up the project for years to get that abandonment done or vacation taken care of.
The first step that we always see when you get into a project is to meet with the city, understand the current information. Who’s the jurisdiction, is it in the county, or is it in the city? And that’s a pre-op meeting with the jurisdiction. When we meet with the city, we talk about, Hey, if it’s in the city, don’t need to do annexation. If it’s in the county then it’s possible, the city may want it annexed. It may be part of a larger plan. And utilities drive the boat on a lot of that. That will dictate if it needs to come into the city or not.
If it needs city water or city sewer to be able to do a project. Those can create issues with islands. You can’t create an island when you do an annexation. You got to make sure that you’re annexing everything contiguous to the city. So that’s something that we have to take into consideration.
And as I mentioned, serviceability with utilities is another big one. Sometimes annexations are a hundred percent voluntary, sometimes they’re not. Per code, you could do up to an 80/20 where 80% of the property is voluntary and 20% of the property is not. In many instances, we’ll see cities use a piece of property to force another property into the city, to clean up their boundaries and corporate limits. And, that’s really what the city development board wants to see anyways. So that’s always a big step and that can take three to four months sometimes. So if you’ve got to do that, that’s something you have to factor into it.
The zoning, land use, and comprehensive plan is another huge factor. Every city’s got a comprehensive plan that dictates how they want their city to develop. Where do they want commercial? Where do they want industrial? Where do they want residential? Where do they want high-density residential? Where are the major corridors for infrastructures? All those things are a playbook that we need to follow, and we need to work with the city on to make sure we understand what they’re looking for. If the property is currently zoned, what you want to do, and what the comp plan shows, great. You roll through that step and right into the next one, but a lot of times it’s not. Again, that’s another process that can take 60 to 90 days, depending on each city. There’s public hearings required, so those are all things that we need to take into consideration when we’re working on a schedule with a developer.
Utilities and Land Access Due Diligence (6:29)
Utilities are another huge item. Sanitary sewer is going to drive the boat on almost every project. Where is it at? Is it on your property? How do you get it if it’s not? Who’s going to get it extended there? Does it go through somebody else’s property? Can you get an easement from them? So those are all big questions we’ve got to answer and make sure we understand if that’s possible or not. It does open the opportunity for development agreements, where the developer may extend the sewer a couple thousand feet to their property up a creek, and the city will work with them to pay for part of that or rebate the developer back with the development agreement over time so that the property can develop and the city gets their trunk sewer installed. So it’s a win-win for everybody.
Tim West (7:10):
You’d be surprised how many times we run into a client who’s purchased a piece of property and is missing a key utility connection, like sanitary sewer. Is there something that you can do ahead of time to warn that client about a shortcoming on the property?
Eric Cannon (7:26):
Whenever somebody walks in the door or gives us a call on something, we’re pretty quick to pull a basemap, an aerial with LiDAR topography, and a boundary survey and we typically do that for free. We make a couple calls to the city if the client’s okay with that. We can find out about utilities and zoning pretty darn quick. That gives us the opportunity to warn them if there are shortcomings and again, that goes back to getting that due diligence. We have very, very few clients that are going to buy something and close on it and then come talk to us, because of that exact situation you just described. I think people have been burned over the years and anymore almost everybody, they get that due diligence time to go through this process and make sure that they’ve got all their ducks in a row.
Tim West (8:07):
So call us right away if you’re looking to develop a piece of property.
Eric Cannon (8:10):
Yeah, that’s the positive we’re going to bring to the table with any client is that upfront investigation. We’ve got a lot of great relationships with the cities. We know all the engineers and planners, really well. We’ve been doing projects for decades. We can make phone calls and get information within minutes or hours and really help people understand what handcuffs are going to be on properties and what their limitations are going to be.
Confirming Property Platting Status (8:33)
Platting status is another big step that we always look into. Is the property already platted? And this really falls into more of the site plans and the smaller developments, gas stations, car washes, or something like that. Where they’re looking to just build a project, not necessarily develop it. Knowing can they just go in and build a building or do they have to go through a platting process, which can be arduous at times. If you got to do a preliminary plat and a final plat, those can take several months as well. If the property isn’t platted already, if it’s a remnant parcel the city is going to want to get their right-of-way dedicated, they’re going to want to get a legal description or an official lot designation to it. So those are obstacles we’ve got to deal with sometimes as well.
Private Development Construction Schedules (9:10)
Really once we get through that list of four or five things upfront and understand where everything’s at, we can put a schedule together for a client. Most cities have development schedules, which are nice. They’re gridded out. They say you submit on this date, you go to P and Z here, you go to council there. We can back in if we have to do annexation if we have to do rezoning if we have to do platting. We can incorporate all those things into the schedule, get that information to a client upfront. They’ve got an understanding of where their timeline’s going to be at. They can communicate that back to the seller. So they either need to adjust their due diligence time, or they can verify that it’s going to work with their due diligence window.
And then it’s just really working through the construction drawings and site plan, which is pretty straightforward, to be honest with you. Each project is unique and takes a little bit of work here and there, but like I said, each city has got a schedule that you’re going to hit on those and we go as fast as we can, and we’ve got a lot of resources. We’ve got a substantial staff that can really adjust and move people around to make deadlines. And, if we need to throw a bunch of people at a project to meet a critical deadline, we can do that. I think that’s one benefit we have over everybody. And again, those relationships we’re going to exercise those to make sure and push things through with the communities and the jurisdictions as quickly as we can.
Environmental & Engineering Reports (10:20)
Some other things we always want to throw out to people to make sure they’re looking out for is geotechnical and environmental issues. We don’t do the geotechnical side of things, but we do the environmental. So we can get you a Phase I Environmental Assessment if you’re worried about any historical issues out there. If that moves into wetland delineation or environmental concerns specific to the Army Corps of Engineers or anything like that, we’ve got environmental scientists on staff that can manage all those aspects of the projects, get you through the permitting. Those are, I would say, unique they’re not every single project, but when they’re there, they’re an issue and we have to make sure we’re addressing them.
Architectural concerns are something that always come up. Every city is a little bit different and their code on that. Again, we’re not architects, but they’re part of the project. When we’re going through the site planning, you’re going to have building materials that are going to be required. The P and Z and councils are going to want to see those as part of the approval process. Those are things we want to make sure clients understand.
Awarding Contracts for Private Development Projects (11:10)
And then the city approval process, there’s a timeline there too with P and Z and council and the back and forth with commons. The first time we submit something, it may change a little bit before we get to the final product. But once we get through that, then it really goes into the developer awarding their contracts. Again, the big difference here is they don’t have to hire a low bid. They don’t even have to bid it out. They can just hire somebody. If they’ve got a great relationship in place with contractors, they can just go hire them and have them work on their projects. So they’re able to jump on projects really quick from a construction timeline. They can put it out to three people, get bids from them, and then beat everybody up and get the best price for their dollar.
Timing of Bidding Effects Construction Costs
Tim West (11:46):
If I’m a developer and I want to start a project as soon as I can in the spring, what would you recommend would be the timeframe I need to set aside ahead of that start of construction to allow for the due diligence period, the design period, platting, et cetera?
Eric Cannon (12:03):
I would always recommend 120 days to anybody. I know that seems like a long time, but really the reality is if you have to go through annexation or zoning, there’s 90 days right there that it’s going to chew up and you’re not even going to really be into the design to know the details of construction costs and stuff like that for you to shore up your numbers. So call us as soon as you can, but really if you’re looking at doing something in the spring, I’d say reach out to us in November and let’s start talking about it. If zoning and annexation, aren’t an issue, we’ve got a little bit more flexibility in there to hold off on things. But, I would say a safe bet is make sure you’re in that 120-day window to start that conversation.
The timing of construction bidding is important. You bid something in January, February, you’re going to probably get a different price than you are in May or June. People’s schedules fill up. Those are all things that you have to take into consideration and factor in when you’re looking at projects as well.
Tim West (12:55):
Well, thanks, Eric. That’s a lot of information that you covered based on the private project process.