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Government Approvals for Real Estate

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Government Approvals for Real Estate

Written by Brent Pace for Gaebler Ventures

Getting through the red tape of government approvals can be frustrating for an entrepreneur who just wants to run his business. Here we discuss some things to focus on as you try to get approvals for your next building project.

As an entrepreneur with a new venture, you are probably becoming acquainted with the wonderful world of red tape.

The government has controls on all aspects of business, creating standards as well as multiple hoops to jump through. As you work on your real estate project (whether it's building your own space or something similar) you will realize that getting government approvals can be a lengthy process. Here are a few items to remember as you embark on getting government approvals for your project:

Know the Gatekeepers

Each municipality is different, but the rule is the same. You need to get to know the folks in the planning and zoning department (and perhaps even on the city council in small cities) in order to get your project through quickly. Learn who these folks are, talk to them, have lunch with them, and try to get a feel for the vision they have for your property. Doing this will save you lots of time, money, and heartache.

Attend Necessary Hearings (planning/zoning/commission meetings)

You will probably need to attend a few council meetings or planning and zoning meetings. A lot of these meetings open up for public comment. As long as you are not embarking on a controversial project (say, tearing down low income housing to build a new high-end movie theatre...) there should be very few people there. But missing these meetings can set you back months.... And I mean that quite literally. If the commission only meets once a month you can't afford to miss the opportunity to get your project approved.

Focus on Benefits

When you are pitching your project focus on the benefits it will provide to your community. Some of this might include:

Increased tax base (especially if it is a retail project)
Helping an underserved clientele
Developing a previously under-developed or blighted property
Any sustainable or "green" components to your project
Job creation (big one with the elected officials)
Any open space or community amenities provided

A big item to really focus on, especially when dealing with a small municipality, is their opportunity cost. If you could re-locate in a number of cities - they should be glad that you are choosing theirs. Play this point up if possible. It doesn't hurt to suggest that a lengthy and drawn-out process might force you to take your project to the adjacent city.

Re-Zone Your Property - Don't Amend Master Plan

Your competitors - other real estate owners - would benefit greatly if you jump through all the planning and zoning hoops and then change the whole plan to make it easier for them to develop their property. Push hard to simply re-zone your parcel for your project. This is especially true if you are developing a retail or office space. It's great to have your own little monopoly, so don't change the neighborhood plan, just the zoning for your project.

Building Permits

As you get your approvals, don't forget the final step which includes picking up and paying for your actual permits. Sometimes a general contractor will do this, but if it's not specifically in their contract you will need to pick it up yourself. Although it will cost something, the satisfaction of knowing that you are fully approved and ready to start building will outweigh the cost.

Brent Pace is currently an MBA candidate at University of California at Berkeley. Originally from Salt Lake City, Brent's experience is in commercial real estate development and management. Brent will have tips for small business owners as they negotiate their real estate needs.