Many commercial real estate professionals feel challenged when facing local administrators, politicians, and citizens groups to obtain rezoning approval for new development. Even though the rezoning process can be as simple as presenting the proper information to the planning commission staff or zoning administrator, the potential for conflict is evident. Commercial real estate professionals can benefit from using local knowledge and political savvy to gain a commission's support and avoid the pitfalls that often thwart rezoning proposals.
A fundamental understanding of the rezoning process is essential for commercial real estate professionals to advise their clients on the best course of action.
From gathering background materials to garnering local support to presenting a proposal at a public hearing, many steps must be taken. In addition, each commercial property type has certain nuances that must be considered to better negotiate with planning commissions.
Beginning the Process Several investigative steps must be taken before beginning the rezoning process. The first step is to review the deed for restrictions. Only a court of law can change these restrictions, so they are a waste of time in the zoning arena.
The second objective is to obtain the seller's full support. The seller has the most to lose if the proposal is not approved, because the property may not be rezoned for a substantial period. Some local planning ordinances restrict buyers from petitioning for a higher zoning classification if a current petition is defeated. Also, if a contract falls through after the proposal is approved, the seller will be stuck with the new zoning parameters.
The next strategy is to collect all up-to-date ordinances to select the appropriate and least-controversial zoning category. In some cases, it may be better to request a similar zoning with restrictions on all aspects of the code to the current zoned standards except for the buyer's intended use. For example, a buyer wanted a higher density multifamily development than was allowed under current zoning, office 1. The easiest course of action without detrimental results to the seller was to request an up-zoning to office 2, since that classification included the desired multifamily density. The seller requested that all other categories maintain the rights for office 1. This method saves the seller's higher-yield zoning for resale if the contract falls through.
If the property's proposed use does not conform to the local plan, the best strategy is to request a plan amendment to the district plan prior to or simultaneously with the rezoning request. A plan amendment is a written text that changes some of the parameters of the district plan to allow the desired rezoning. This side step saves time and money, because if the plan amendment isn't granted, the buyer knows the rezoning won't be approved and can stop the process.
The development budget also is an important factor to consider when determining if rezoning is a viable option. Many times buyers obtain zoning at a steep price only to find that the development is too financially strapped to come to fruition.
Some buyers choose to hire local lobbyists to handle the case; however, if it doesn't appear to be controversial, a lobbyist is an unnecessary expense. If a lobbyist is necessary, look for a professional planner who has worked with the local planning staff, especially in a managerial capacity. Lawyers who specialize in rezoning also are effective lobbyists. The rate of success with lobbyists usually depends on how much attention they can give the case.
Gathering Support and Materials After concluding that rezoning is a viable option, buyers should develop a plan and gather local support. This can be accomplished with a few simple strategies.
Schedule a Pre-Zoning Conference. To ensure a successful rezoning, schedule a pre-planning conference with the planning commission staff since they will be presenting the petition. Make the presentation brief; listen and negotiate with them on their modification ideas. Their opinions typically reflect the desires of the planning commission — the final approving body.
Meet the Neighbors. Schedule meetings with adjoining property owners, homeowners, and business association groups, as well as neighborhood activists and the district representative. Since these constituents can rouse opposition, it is wise to listen to their suggestions and comments. If possible, obtain letters supporting the rezoning. Testimonials from homeowners or business associations can negate the impact of vocal opponents at the public hearing.
Sometimes adjacent property owners are more likely to support plans if their properties receive residual benefits, such as extended water and sewer taps.
Develop a Detailed Plan. All drawings should be detailed and in color. Land planners create the best renderings. Also, all written materials should be very clear, with diagrams and pictures if necessary to present the case. Bring enough copies for all of the decision makers and staff. Later in the process, remember to make new copies incorporating changes that have been negotiated in the 30-day period between the public hearing and the final vote.
Winning Presentation Strategies Timing is everything when it comes to the public hearing before the planning commission. Figure out when the petition will be considered. If it is near an election, schedule the petition before July or after the election in November. If rescheduling isn't an option, consider asking for a 60- to 90-day deferral.
The buyer always should attend the hearing to answer questions or quell concerns. Be prepared for a full presentation with pictures and drawings; also be ready for a rebuttal if necessary. If the staff recommends the petition and does a great job of presenting it, the buyer shouldn't need to make a presentation but should reserve the right for rebuttal time. If the buyer's presentation is necessary, the time should be split between his brief description of the proposal and the current property owner's favorable support. Adjacent landowners should be allowed to voice their support as well.
During the 30-day period between the hearing and the vote, the buyer must meet with each voting planning commissioner unless a member specifically requests to be contacted in writing. The most critical vote of support will come from the district representative or an at-large member who lives and works within the area in which the petition is located. His vote always carries weight with other commissioners. Also, meet with the representative right before the vote to gain support or a willingness to compromise.
Nuances of Each Property Type Each property type has particular issues that must be addressed for a successful vote. Knowing what the planning commission will ask for and strategies to win its approval will increase a buyer's success.
Multifamily Development. Opposition to multifamily development usually includes school overcrowding, crime, traffic, and appearance. For example, if neighbors object to the proposed building heights, remedies include creating buffer areas and incremental heights, such as developments where periphery buildings are two stories and inner buildings are three and four. Usually planners will allow higher density with fewer buffer areas if the proposed community is fenced. Dumpster placement also is very important — keep them away from the neighbors. In addition, attractive landscaping almost always helps win rezoning approval.
In many areas, planners will insist that multifamily developments have multiple entranceways to ensure access for emergency crews. In areas where storm water is a problem, detention ponds are critical and aesthetic placement is encouraged.
Other strategies to help win rezoning approval include making donations to neighborhood improvement projects and specific contributions toward the establishment of a traffic light, if necessary. If an unusable flood area exists, consider giving it to the community greenway system for a tax donation or allow it to be used as a ball field or recreational area.
Retail Development. The current trend in retail development is moving away from large strip centers with neon signs and toward village centers or mixed-use developments. Both of these can be challenging since most retail developers and end users have very specific parking requirements. Retailers' signage and visibility needs also are difficult to negotiate.
Currently, community planners favor breaking up shopping centers to make room for detention ponds, fountains, and other landscaping elements. Malls also are taking on a softer look with landscaped public space where mass transit hubs can locate. Finally, planners are asking developers to add sidewalks and trees to make malls more pedestrian friendly. Buyers' willingness to harmonize design with the existing properties and integrate it into the neighborhood is critical.
Traffic always is the No. 1 concern with retail development, so it is important to include deceleration lanes and at least two ingress/egress options. Also, a contribution to a stoplight fund is a good concession.
In some neighborhoods, single-tenant drugstores are perceived to be a dangerous addition because of the presence of drugs on the premises. Providing good security, competitive pricing, and additional jobs in the area are arguments that help win approval. Also, many neighborhood groups strongly oppose food stores that back up to residential areas due to the perception that these stores create rodent problems. Locating food stores as far away from neighborhoods as possible is the best way to overcome this objection.
Offering space for the municipality to locate a police precinct in a large or neighborhood shopping center is the best way to curb crime and vagrancy issues. Storm water drainage and detention ponds in non-arid locales are essential. Ponds must be fenced for security or made into play ponds with shallow water and run-through water fountains.
The planning commission may ask for other concessions, such as restrictions on the types of establishments within the petition. A common restriction is adult entertainment. It may be beneficial to have leases in hand and announce some of the tenants that will occupy the parcel. However, this tactic can be a deal breaker with neighbors and elected officials, so it must be used carefully.
Retail developers can offer many incentives to win approval. Trees, pocket parks, and greenway donations are popular with decision makers. Reduced signage and controlled lighting — which provides safety but is not unattractive and is low enough to not disturb the neighbors — are a must. Community rooms also make neighbors happy.
Office Development. Current planning commission requests for central business district high-rise development include first-floor retail activity, integration with hospitality or entertainment space, and decoration such as sculptures, frescoes, or fountains. A second urban trend is to request façade uses for parking decks. Innovative uses include first-floor retail, entertainment, public-safety offices, transit offices, and branch libraries. Upper-floor façade uses include urban lofts. Suburban offices increasingly are required to become mixed-use properties with day-care centers, retail, and residential units. It is believed that all areas should have 24-hour uses for safety and to minimize traffic congestion.
The major oppositions to office development are traffic and building height. Additionally, opposition occurs when proposals lack other integrated uses such as housing, retail, and public space.
Once height, traffic, and parking have been addressed, the only remaining issues involve security and the structure's design. In office parks, key safety concerns are multiple access points and connectivity. Police, fire, and medical services require access from several directions to improve response time. Addressing this issue appropriately also will lower insurance rates.
The best tactic concerning design is a beautiful visual rendering — usually an artist's colored sketch. Virtual tours can be effective, but since audiovisual equipment is unpredictable, an actual sketch is ideal. Design is a critical factor in gaining the planning commission's approval.
Industrial Development. Buyers wanting to develop industrial properties typically are asked to have park-like designs and restrictive covenants for clean grounds where multiple buildings are planned. Natural buffers often are required to shield the campus from other development, particularly where industrial is integrated with other uses. Since taller industrial buildings are gaining in product share, the most successful petitions include additional land surrounding the building to aesthetically minimize the impact of the increased height. Buildings with multiple fronts are favored for rezonings since the space can be carved up for multiple tenants if a single-tenant user vacates the premises.
Ingress and egress issues are critical because of traffic concerns. Work with both the planners and the traffic engineering departments to resolve these issues. Promising a turning lane into the property will help alleviate concerns about truck traffic.
Environmental impact issues tend to be the main source of concern beyond traffic slowdown. These issues include noise, chemical, and air pollution.
Detention of storm water also must be resolved in areas where runoff is an issue. Provide for additional land for a detention pond or include an underground detention capture reservoir.
While there are many challenges to consider when preparing a rezoning proposal, commercial real estate professionals strategically can advise their clients for a successful outcome. With thorough planning and careful consideration of local policies, obtaining rezoning approval can be an easy part of the development process.