10 Development Due Diligence Considerations
June 10, 2014
New development projects are on the rise again. Here is a quick checklist of 10 issues to consider before getting started on any development project:
1. Obtain an environmental assessment (Phase I and Phase II reports and any asbestos abatement). Also, perform soil bearing and any other subsurface tests recommended by your structural engineer or as required by the local municipality, or both.
2. Check for any wetlands, floodplains or other environmental protection issues (e.g., landmarks, open space requirements, environmental preservation restrictions, Indian burial grounds or other archeological, etc.).
3. Check for the availability of recorded and unrecorded utilities, like sanitary sewer, water, electricity, gas, telephone, cable/other communications, service agreements, etc.
4. Determine any drainage requirements (including storm sewers availability, if applicable).
5. Determine the possible governmental requirements, like zoning, subdivision, utility tap-ons (permits and fees), special permits and fees (e.g., development fees, demolition, drive-through, signage, transportation or other impact fees, etc.), variances (grandfathered rights), off-site development requirements (including roads, school funding, etc. ), curb-cut restrictions, traffic light requirements, site plan approvals, recapture agreement obligations, special assessments, annexation/development agreements, FCC (other telecommunications), others – discussing with local authorities (review agendas/schedules for public hearing).
6. Check for the availability of any governmental subsidies.
7. Determine whether any approvals from private parties are required (e.g., demolition of party walls, access for construction staging).
8. Determine the current situation with public/private roads and whether any changes need to be made.
9. Determine whether there are any necessary estoppel certificates, architectural approvals, assessment waiver letters, etc. from developer/board of managers of business parks.
10. Determine whether any loans or bonds need to be assumed.
This list is by no means exhaustive, but should give you an idea of the many due diligence moving pieces for consideration before getting started on your project.