Large Land Development in Suburban Area

[Ronnie Booth]

Hey BP!

I recently locked down a large parcel of land in a suburban area I'm not used to working in. I'm used to doing small 2-4 unit developments, but this is 6-7X that amount and in an area I've never done a project in.  

The Question

How would you move forward on this deal? Would you try and partner with a developer on the project? Is so, would you go ahead and get a concept plan to pitch to the partner or just turn it over to them to figure out? Would you just wholesale it? Again, if so, would you go ahead and get a concept plan to pitch to the partner or just turn it over to them to figure out?

The Land

The parcel is 11.5 acres, however, there is a flood plain that runs through it roughly leaving about 7.5-8 full acres of developable land. The zoning allows for a minimum lot size of 10,000sf. I'm currently working on getting an updated survey to verify the exact amount of land that will be developable. 

The City

I spoke with the city about how their approval process works and, in short, found out they're out of their minds and seem to be trying to make developers lives harder. I was told I needed to submit a conceptual site plan which would take about 1 month to approve through the city. If the city approves the plan you have 2 DAYS to submit your full construction documents. This means that while I'm waiting for approval on a concept plan, I have to spend $25,000+ on construction documents that may end up being irrelevant if the city decides to disapprove my original concept plan. 

The Plan

Originally, my plan was to try and develop the land myself and sell lots to individual developers. However, I've recently become aware that the cost of doing that would far exceed anything I alone could maintain. My second thought was to simply hire an engineer to draw up a concept plan that I could show to a more seasoned developer who may want to do the project themselves. In this case, I would do a funded double closing adding my fee to the price and would likely have submitted the concept plan to the city on their behalf prior to closing. 

The Cost

The quote from the engineer came back over $30,000 for:

1. Concept Plan

1A. Traffic Shed Analysis (If necessary)

2. Preliminary Plat

3. Construction Documents for Entitlement

3A. Stormwater Management – Water Quality & Quantity Detention, etc.

3B. Permitting Assitance, SWPPP, & ARAP Application/Plans

4. Project Coordination and Meetings (Hourly-Not to Exceed)

I have a good due diligence period, but due to engineers/surveyors being backed up in my area I need to get moving. 

Thank you in advance!

-RL