While some first time, or “new” developers sometimes rely on their real estate agents to know what can be developed on a piece of land; these do not have any standing in a technical assessment of a piece of land one might want to purchase for development. Engineers, are typically the best option able to collect and evaluate information often missed by non-technical members of the real estate professions. Typical Due Diligence Reports consider for a specific land uses:
- Zoning and Subdivision/Site Plan Regulations
- Setbacks, Maximum Building Heights, and Area Restrictions for specific properties.
- Stormwater Drainage, both from the parcel being developed and apparent offsite flow concerns
- Local Code requirements and available public utilities necessary for certain land uses.
- Traffic considerations for access to public roads and whether adequate public facilities exist to support the development.
- Floodplain concerns and regulation compliance
- Clean Water Act compliance issues
These and more need to be addressed and understood early in the process so you do not end up purchasing a property that cannot be used for the reason purchased or has limitations that will prevent planned cash flows as well as to help you access fair purchase price.
We recently assisted a developer looking to purchase an industrial property in South Kansas City which revealed a significant limitation in stormwater discharge allowance due to a significant discharge limitation under a State Highway.
The asking price was simply too high knowing that about 1.5 acres of the 7.5ac tract would be needed to manage stormwater flows making the allowable development, considering open space requirements; too limiting for the planned cashflow which could justify the purchase price. The developer decided to wait verses lose the developable area to excessive stormwater management needs.