Program development, site assessment among critical elements for project planning.
By Frank R. Muraca, ARCH Consultants
Site assessment and land due diligence are essential activities in the early stages of the development process. Just as a market demand study is critical to demonstrate the need for program development, site assessment is critical for project site planning.
An appropriate amount of property evaluation may uncover important issues that significantly affect the development schedule and financial planning assumptions.
Frank Muraca, ARCH Consultants
The required breadth and depth of investigation varies depending on the scope of program plans and current status of the property. When selecting consultation on assessment activities, choose an experienced development manager with knowledge of the industry, market and building type.
An experienced development manager can help you understand important go/no-go decisions in the process. These go/no-go decisions are where developers confirm the viability of a development. The first decision includes defining the programs and services the facility will offer.
Identify the assessment scope
The first step is to determine the scope of evaluation and when certain tasks need to be accomplished. It is important to note that while appropriate financial resources must be allocated to these activities, the costs are minimal as a percentage of the total budget and have the potential to diffuse expensive construction and/or regulatory difficulties and delays.
There are three certain activities that should be considered standard in a basic site assessment. These include but are not limited to:
1. reviewing zoning to determine opportunities and constraints;
2. reviewing applicable regulations and building codes;
3. evaluating site topography and utilities to determine impact on site planning, project cost and project schedule.
These activities not only help to identify specific risk factors, but also help determine the suitability of a potential site in relation to planned programs and help clarify assumptions for an accurate economic analysis.
Involve the whole team
Development planning is a multi-disciplinary process involving a variety of team members, all engaged to consider marketing, finance, operations, design and construction. Identifying these roles and responsibilities for the project organization chart is crucial for the effective progression of your project, resulting in a successful building environment.
The very first go/no-go decision in the development process is property evaluation. At the onset of the project, an integrated approach with management of the required activities must be established. It is important that, from the beginning, the team members feel that they are working together toward a common goal.
The approach to site assessment places team participants in different roles. Go/no-go stages must be established early in the process in order to set what level of due diligence is necessary (see sample task list).
Finally, risk and reward are weighed by the variety of disciplines. The appropriate level of investigation is then determined by balancing risk as well as reward. No single approach is “best.”
The expansive listing of tasks involved depends on specific sites and their associated building programs. Owners will need to answer key questions when making a decision on approach. Assessment success factors include knowing your product, the community, the site conditions and the local zoning approval process.
Show you’ll benefit the community
Operations may have different goals than development and it is important to understand how this coincides with the community’s needs. Demonstrate what benefits your project offers to the community during entitlement efforts. This could include items such as tax revenues, job growth and resident benefits.
By understanding the needs of the community, you stand a much better chance of getting approvals in a timely fashion, and such understanding could also help mitigate zoning process risks. Local needs may sometimes be in conflict with not only development needs, but also the needs of the end consumer.
Referring to ordinances defining the use and classification of your business practices can prove useful when sharing the intentions of your proposed facility with the community. Identifying all products, services and features of your business will help paint a clear picture of how each characteristic of your business will address a specific need or resolve a problem that exists in the community.
A key component to any successful planning strategy is a development process that focuses on limiting exposure early on. At the same time, this affords owners an appropriate level of property evaluation to move forward through go/no-go steps.
The use of time and resources, then, is a reflection of closing on the land and what contract covenants exist, the local municipality process for zoning, and requirements for mezzanine financing if applicable.
The ability to fund early development tasks is a direct outgrowth of the financing method and equity available. How much is spent before finding out a project is a “go” is the task at hand for site assessment and land due diligence.
Sample task list for site evaluation
- Review local/regional planning efforts to assess impact on site
- Review zoning ordinances to determine opportunities & constraints
- Review applicable building codes & regulations
- Evaluate site topography to determine impact on site plan
- Evaluate project site costs and construction factors
- Consider political factors & implications
- Determine current & planned transportation access
- Determine current & planned access to utilities
- Determine boundaries of wetlands & floodplains
- Determine parcel boundaries, setbacks & “buildable” areas
- Determine general storm water requirements
- Evaluate site’s potential for programs & future expansion
- Environmental site assessment & review findings
- Sub-surface soil testing (geotechnical reports)
- Title search & legal review; assess impact of substantial findings
- Real estate appraisal for impact on loan-to-value assessment
- Entry/Entrance & Buffer Areas
- Real Estate Taxes
- Natural Barriers/Boundaries
- Cost considerations on purchase
- ALTA survey
- Climatic conditions
- Vicinity map (regional location)
- Purchase/Lease agreement
- Economic/market feasibility
- Evaluate economic impact of land acquisition terms/options
- Develop a site utilization diagram based on working assumptions
- Develop conceptual site plan
- Certified land survey
- Tree inventory and survey as required by local municipality
- Assess cost and schedule impact of site conditions
— Frank Muraca is president and senior planner for ARCH Consultants Ltd., an independent, national services firm specializing in all aspects of building project management for senior, learning, healing and civic environments.