Self Storage- Zoning I-3 correct?

[Henry Clark]

@P from prior topic.  You may decide to develop versus buy.  Several reasons to do this.

ZONING, I-3 RIGHT?

When ever I take a look at a new town to do storage, I take two approaches at the same time. Do I build? Do I buy? Do both of these at once and go with the one with the best return or impact. Preferably, I like to buy because this takes out competition, greater control over pricing, and hopefully they have some land to expand on. The expansion of an existing facility is always more profitable than the initial purchase or build.

A. Look at zoning either online or at the City or County courthouse look up both the Zoning Map and get a copy, if one exists of a Zoning template, which explains what each zone permits and may allow under a Special use or Condition permit.

B. Read each Zone in detail, unless they have a cross reference table showing “allowed” and “special use”.

C. Ask for the Future planned zoning map. This will tell you where you probably can ask for a change in Zone or for a Special Use permit; and have a greater chance of getting it approved.

D. Talk with the local realtors and they may know what is not on the above Maps and tables. Most cities don’t allow “Spot” zoning. So they don’t get sued. One city I know designated an entire area “Agriculture”, the lowest zoning possible, so they could control allowing what industries come.

E. Most of the time Storage is designated to an Industrial zone. But not always. I have seen it under Agricultural, Planned Residential, Commercial and some Industrial zones.

F. Look at a GIS map of the city. See if Railroads cross through. The Federal government gave both city sites and land along the tracks to the railroad. The Railroad then sold this land to help finance their construction. Look for any land that is still owned by the railroad and ask them to buy it. It won’t have a “For Sale” sign on it, but it will most likely be available for sale if it is not used as a work yard or siding. The good thing about this property since it is so old, it will be in the middle of the town, in a great location. It will probably be zoned “Residential”, but the Railroad will not sale it without putting covenants on it, that no human habitation (home, daycare, school, retirement home, etc) can be built there. Another good thing, is the Railroad does not pay property tax, anywhere. Put in an offer subject to zoning approval. Ask the Zoning committee to allow you to do a “Special Use” permit since the Railroad will never allow “Human Habitation” in this Residential zone. Also ask them to let you pay property taxes. Your units will be well landscaped and they will provide a noise buffer with the railroad.

G. Look at Non-Allowed zoned properties, next to Allowed zoned areas. Still look at these properties since Zoning committees may allow you to switch the zoning or do a special use permit. They do not regard this as “Spot” zoning, since it is next to an allowed area.

What do you do with this information?:

1. Now, that you know the zoning, look for any spots greater than 2 acres (“drive up” storage). Start checking on the prices, even if a location is not for sale. So you don’t waste your time looking at all locations, prioritize and pick locations that put you in a more favorable location between your future competition and your residential customers. Most storage facilities are Mom/Pop and were built with the owner in mind and not the customer. Examples: Gas station owner had two acres and built on one. Hotel operator had additional space. Etc. They did not necessarily build closer to their customers or for ease of access or street advertising. Buy them later when you have a footprint in the town. You don’t want to buy them first and have to go check on 30 units, 30 miles away. We built in one town, and before construction was done bought two other locations that were offered.

2. Line up your potential purchases in priority and start making short and time sensitive offers. You are now in power since you are not tied to one location or even one town. You have a 40 mile radius or whatever you consider a comfortable distance to manage.

3. The harder it is for you to find a location, the better. Less chance for “Stupid” money to build next to you, or out position you.

Zoning Adjustment Meetings:

“Just the Facts.” You will get to speak first, remember your an “Outsider” and don’t vote in that community. Take your time describing your facilities. The property and sales tax it will bring. Explain the current taxes and current look of the property. Show them a “Look” of the new facilities. No one may show up, or you might get 30 people to show up. You “personally” may have to notify everyone within a 200 foot radius or the City might do it. When the public speaks, don’t argue with them. They get their say. Hopefully your added property/sales tax dollars outweighs the public view point. When the vote (good or bad) is over thank each of the members, they’re not paid and most have businesses.

If the Zoning Adjustment committee approves or disapproves it, you then can go to the City/County board for another public hearing and a vote. Don’t waste your time, if the Adjustment committee voted against you. If the City/County Board approves, ask them to waive the need for future “Reading” meetings. The above two public hearings, possible two more “reading” meetings and the final “vote” meeting may take you 4 months, 4 weeks or maybe just two meetings. Depends on how often the boards meet and how much opposition/benefit there is.

Happy hunting. This is the most stressful and fun part of the process. You have very little control, but your decision on property will be the most important of the whole build/buy process. Add Control, by adding more location/city options. XXXXXXXXX is done growing, but you never stop looking. The best spot yet, is a cornfield where there isn’t a house for a mile. Would love to have built a 1,000 unit location there.

Remember, start small and make your big mistakes early.