AnneMarie ‘Bemmie’ Eustace
An entitlement essentially grants a landowner or developer the right to use a specific parcel of land for a designated purpose and is considered a valuable asset in the real estate development arena, applicable to both small and large projects across the board. The process may be triggered in a variety of circumstances at different points in the life of a project for developers and sellers.
A land use is generally regulated by local and state laws, with rules promulgated through statutes and ordinances. Typically local land planning agencies act as the regulating authority, though in large developments with regional impact, states may be involved as well. As an overview, the responsibilities of land planning agencies fall within the zoning ordinances, although they are guided by larger, comprehensive plans for the municipality’s future.
Growth management plans have been popular throughout the country in the last 20 years in an effort to effectively utilize resources and prevent urban sprawl, whether it is a city, county, township or Parrish. This is mainly accomplished through tighter regulations and more formalized plans that depict the municipality’s vision for future development and growth.
The Future Land Use Plan begins by creating an overlay of current zoning maps allowing the community’s governing fathers to identify specific growth corridors and find balance among, and transitions between future uses including residential, commercial, industrial, office, parks, and schools among others. The Plan offers broad designations whereas zoning regulations provide more refined details for the subcategorized zoning classification.
Sometimes a property’s use is inconsistent with the future land use and/or existing zoning classification. Consider an abandoned office/warehouse zoned industrial situated adjacent to property that is zoned commercial. The land owner would like to sell the property and realizes that a higher return on investment could be realized if the zoning was approved for commercial use. However, because the future land use plan designation and zoning classification are inconsistent with the proposed use, entitlements must be procured to allow commercial development. In this case, the future land use plan would have to be approved as a commercial designation, and then rezoned accordingly.
When rezoning for larger developments, it is prudent to consider pursuing the Planned Unit Development (PUD) zoning classification, which offers benefits to both the municipality and landowner or developer. Instead of being relegated to one zoning classification, such as C-3, which might allow low intensity commercial development, PUDs allow the flexibility of applying various standards from other zoning designations to the overall project and can incorporate a broader range of uses consistent with the adjacent commercial uses. All of the standard zoning issues applicable to densities and intensity of development, parking, loading, open space/landscaping, pedestrian ways, access, etc., are discussed and negotiated until both the municipality’s and developer’s concerns are resolved.
The municipality however, may restrict the intensities of uses within the PUD to ensure the development is consistent with upgraded services that will be required to meet the needs of the additional traffic generated. Those would include but are not limited to adequate water sanitary/sewer capacities and roadways. Maximizing the intensities is appealing to the developer since additional approvals are typically not required in the event the property is developed for a less intense use. Ideally, the developer would attempt to secure the maximum amount of flexibility within the PUD so that prospective buyers will already have the entitlements in place for commercial development.
In some cases, a property may be zoned properly to permit a particular use, though ensuring all the requirements will fit on the parcel can be challenging. In the case where space does pose a problem, a variance may be necessary to entitle the owner to move forward. This variance process is identical for a residential owner seeking a home addition that encroaches the building setback as it is for a larger developer requesting a variance to reduce a side yard landscape buffer. Variances are usually only granted under circumstances where the owner or developer can offer compelling evidence to the city to allow a variance by demonstrating how the property’s circumstance is different from other similarly-zoned parcels. In no case will building permits be issued unless the variance is granted permitting the owner to vary from the code requirements.
Conditional Uses, sometimes called Special Exceptions, are yet other cases where an approval process is invoked for entitlements. Consider a commercial property that allows restaurants as a permitted use, but if a drive-thru is proposed, this additional component would only be allowed as a conditional use. The process provides the municipality with the ability to impose conditions on the proposed development in order for the owner to secure approval for the modification. Examples of conditions might include orienting the drive-thru menu board with minimal distractions from the adjacent roadway’s oncoming traffic, orienting the menu board speaker away from adjacent residential zoning, or providing a by-pass lane, if one is not otherwise required.
Under circumstances where an owner is developing a large tract of land and wishes to sell portions of it, the tract must be subdivided into smaller parcels and in the case where access roads are needed for those tracts, a plat will be required as well. The plat legally documents and describes the new parcels and ensures that easements for utilities and access are in place. Once approved, the plat documents the improvements that create legal lots in accordance with the development regulations. In order for the owner to secure entitlements to proceed with building permits, the plat must be approved.
In the case where entitlements need to be secured, the process is often held in a public forum, which can add significant time to the development process. Nonetheless, public hearings afford neighbors and interested parties the opportunity to review the proposed changes and voice opinions that will be considered by the governing body prior to reaching a conclusion.
Since entitlements may be required at any point in time within the life a property, it makes good sense for land owners to obtain basic entitlements from the outset. This is beneficial both to the owner as a prospective developer and also to the owner as a seller who will be well-positioned to attract a range of potential buyers. Land owners are usually familiar with local politics and strength of neighborhood associations capable of raising objections to a proposed development. Since a prospective buyer does not always have a pulse on local residents who yield the power to halt a project, the required public hearing process could erode the developer’s confidence in securing approvals.
Another consideration is that the time required for the developer’s construction start can be markedly reduced if previously obtained entitlements are in place. For example, the rezoning process or amendment to a comprehensive plan can take months or years to finalize, and that has a direct impact on the time needed to obtain building permits and initiate the construction process. While not all entitlements may be available until an end user is identified, there are definitive steps that can be taken by the landowner prior to marketing the property. If these steps are initiated, the closing date may be moved forward ultimately attr