Proceed w/ purchase despite planning commission concern?

Question

Hi! My boyfriend is under contract for this property in Forestville, CA: https://www.redfin.com/CA/Forestville/6530-Covey-R... 6530 Covey Road in Forestville, CA in Sonoma County, California - wine country or the greater San Francisco Bay Area. Today he visited the planning commission and while they agreed it's a commercial property (he would live on the top floor and run a store in the bottom half), the person he spoke with at the office said there's a concern that there's not enough parking. As you can see, the lot is just a gravel lot with space for 3 to 5 cars. He's really torn about whether to proceed - the planning commission would not give him a firm yes or no - they said there may need to be a public hearing but of course they wouldn't be able to say anything for sure without him going through with the purchase and submitting full plans. Thanks for any advice/input/thoughts/etc!

PS. One option is to go back to the seller and say this could hurt the resale price and to ask them to lower the selling price. Thoughts?

Brian Burke · Answer

One thing I've learned about the Sonoma County permit folks is you can never get a straight answer, and the answer will change as you talk to different people or even the same person at different times.  So be very, very careful in relying on what they tell you at Permit Sonoma.  They are among the worst I've seen anywhere.

I see two items of concern here.  First is whether you would be able to run your business from this location from a regulatory perspective.  And second, assuming the answer to the first question is yes, can you run your business there from a practical perspective?  By this I mean is there enough parking for your business to be successful there, or would it impose a challenge for your customers and hurt your likelihood to succeed?

If you feel that's enough parking, then you still have to solve for the regulatory question.  If the county won't allow your use at that location, getting a price discount doesn't that problem.  Instead I think what you should consider is asking the seller for some additional time to complete your due diligence and extend the closing date, both far enough out so that you can submit your plans and get your regulatory approvals prior to your deposit going non-refundable.

The seller can grant you permission to submit plans for approval so you don't have to close on the property to go through the entitlement process (see what I mean--I bet the county didn't tell you that--they give out bad info all the time).  But you do need time, the seller's cooperation, and money that you're willing to lose if you go through all of that and get denied.

If the seller won't play ball, you might be best served walking from this deal and seeking more suitable space for your intended use.

Ryan H · Answer

I agree with @Brian Burke on this one. As a Sonoma County architect, PMRD can be tricky. I saw this property come on the market a while back and considered it as well. What stood out to me is the adaptive re-use options.  However, I also could see a number of issues with trying to make an old world design meet new world regulations.  Some items to consider are accessible path of travel (gravel is not going to cut it), potential elevator, potential historical preservation involvement, and the biggest issue is if a business can garner enough clients to cover the cost and still make a living.  Forestville is a bit of a "stop for a snack" kind of place on your way to Bodega Bay or Guerneville rather than a destination.  Personally, I think it would work much better as a multi-family co-operative housing situation but that is a whole other yarn to knit.  Best of luck.

Jim Adrian · Answer

The parking spaces, offload area, and the path must be paved.  I would consider a 5' wide (or wider) paved path.  This would allow for 2 way passage of wheelchairs.

Joel Owens · Answer

You might do well to talk to a local zoning attorney there. They consistently go for approvals and changes all the time for clients and can likely give a real world knowledge of what will happen.

I am in GA not CA but I can tell you pretty much anything the government says verbally is WORTHLESS. If they are not willing to put it in writing and sign it you really have nothing to go on. The government people can say: ( That person no longer works here, you misunderstood what was said, rules just recently changed, blah, blah, blah.) As a developer or going for a use change a certain series of events have to happen in your favor to make a project viable and profitable. it can be a long and arduous process.

If the seller is wanting you to keep putting up more and more non-refundable money then it might be time to walk away. A big consideration is your risk factor. An example is if you are worth 10 million but buying something for 1 million and it doesn't work out the way you hoped but you take a 200k loss to get rid of it then it is not good but not the end of the world and you learned.

If you are worth say 1.4 million buying something at 1 million and it goes bad the repercussions can be felt a lot more and your risk/reward factor goes up considerably. The person worth 10 million likely has many other revenue streams going to make up the 200k loss in a short period of time. Another factor is your regeneration of capital time. If you are worth 1.4 million but the time to get to that point was 20 years as you had big equity gains from properties but your job or business itself does not afford much profit cash flow annually. In that case a failure could take a long time to bounce back from versus a doctor worth 1.4 million but making 800k a year and net worth is growing fast.

No legal advice given.

Ronald Rohde · Answer

And to play devil's advocate for the city, its unfair to the City for a property owner to barge in after closing and demand approval for their use. I've seen people buy land, expecting to build a hotel because the broker said it would be allowed, then the city requires a lot more costs for that use and the owner is upset. What do you expect the city to do if you come in with a fixed location, fixed end use AND you don't want to spend any money.

Talk to the city prior to closing and everyone will be happier.

Jim Adrian · Answer

@Missy Longshore

For ADA access gravel will not work like @Ryan H mentioned per 2010 ADA part 206.1.  You will also need 60% of your commercial entries ADA compliant, meaning no steps. 2010 ADA part 206.4.1  From the pictures it looks like you will need to add a ramp.

https://www.ada.gov/2010ADAstandards_index.htm

Nic DeAngelo · Answer

In my experience, planning commission tie ups have been brutal. The old wink, nod, and nudge have turned into multiple years of headaches with no end in sight (currently still dealing with 2 issues on deals). We HAVE had things move quickly from city officials getting behind us, but that was with clear discussions and firm commitments. I've learned if it feels unsteady, it only gets worse from there. Once they have the leverage and you've just purchased a property, they know you're all in without much you can do to make things move. Just my 2 cents on it!

Missy Longshore · Answer

Thanks all! My boyfriend has decided to cance the deal since the parking lot cannot be expanded. Thanks so much for the feedback and input, I really appreciate it!

Missy Longshore · Answer

Thanks for these helpful replies! @Brian Burke, @Ryan H, @Nic D., and @Ronald Rohde, a few follow ups:

1. Isn't it the job of the planning commission to offer possible roadblocks to approval, especially if it's before the sale goes through? Wouldn't that be a sort of CYA policy for whoever is behind the counter at the planning office when you walk in? Consider the alternative - if you walk in and say 'I'd like to use this zoned commercial building for a store and do some mild alterations' and they say 'I perceive no possible issues with that whatsoever' - couldn't you come back around and blame them later? Curious how you feel about this.

2. The parking issue in particular: there's a lot of street parking at this location as you may be able to see in the picture. Are there any rules/guidelines/laws for business parking you're aware of? How does it work if you have a storefront on Main Street and don't have a parking lot? FYI there's also a burger store across the street (Carr's Drive In) that is a drive in from the '50s with a HUGE lot and I was thinking he could lease the 5 closest parking spots to his property if necessary.

3. The property is already zoned commercial and in theory he could buy the building and just start operating out of it - any problems with this?

4. @Jim Adrian thanks for mentioning the ADA design - the good news is the paved access pathways are pretty good although he'll need to measure for width but everything commercial is on the first floor and pretty wide open. Do you happen to know if the entire parking lot would need to be paved or just the ADA space?

Thanks again, this is really helpful! There's another deposit due soon but the plan is to take the weekend to think about it.

Missy

Nic DeAngelo · Answer

I agree 100%.

Proceed w/ purchase despite planning commission concern?

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