UrbanConcepts: A Leader in Zoning and Entitlement Research
Zoning Due Diligence Entitlement Evaluation Reports


Entitlement Evaluations

Zoning Report

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El Conquistador Resort
El Conquistador Resort

Based on Urban Concepts' unique background in land use planning and community involvement, the EER will document the current zoning and planning applicable to a particular property as well as interpret any special overlay issues, special districts or interim controls that may effect the entitlement picture. Secondly, Urban Concepts will also provide an assessment of the future entitlement forecast, evaluating any pending legislation, trends in the local community and volatile political concerns that may impact the future development potential of the site. Given the complex regulatory environment that controls the building process in today's marketplace, these services, which are unique to Urban Concepts, can prove to be the difference between a project that is viable and one that is not.

Over the past seventeen years, real property transactions stretching from Honolulu to San Juan, Puerto Rico, with a collective valuation in excess of $30 billion, have been executed relying on entitlement evaluations provided by Urban Concepts.

In the context of Zoning Due Diligence, we offer five products to the various parties in a real estate transaction that focus on Zoning and Land Use Entitlements:

Coordination of Zoning Verification Letters

Our office will coordinate and collate the request, follow-up and receipt of “Zoning Letters” (also known as “Re-build Letters”) from local agencies per the instructions of the lender. This product is most effective in portfolio transactions involving multiple jurisdictions. The fee for this service is typically fixed on a unit basis. It should be noted, however, that many jurisdictions will ignore the lender’s submitted forms and respond to the request in a limited manner dictated by the attorney for the local agency. We are also seeing more jurisdictions refuse to write verification letters without conducting an on-site inspection.

Basic Zoning Report

Our analysts will conduct an off-site review of available materials to determine the zoning classification; code restrictions such as height, setback, parking and density, along with a list of permitted uses; and provide a standardized compliance report on Urban Concepts letterhead outlining the publicly available information, in a format approved by the lender. It will include copies of the necessary code sections and Certificates of Occupancy, along with statements from the local agencies regarding open building and zoning code violations.

Permit and License Review

The Permit and License Review is designed to deal with uses that are heavily regulated at the local, state and national level. The product itself is aimed at equity interests concerned with the regulatory status of an existing or proposed use. These types of uses can include entertainment and hospitality uses which serve alcohol; licensed health care facilities; and environmentally sensitive installations. The Review will detail the status of the required licenses and permits necessary to operate the subject facility, along with a review of the most recent related testing and inspection reports.

  1. Municipal Permits and Licenses
    Municipal permits and licenses typically include:
    • Local Business License
    • Fire/Life Safety and Assembly Permits
    • Sprinkler System Test Reports and Inspections
    • Police/Alarm Permits and Inspections

  2. County Permits and Licenses
    County permits and licenses usually involve the Health Department inspections for kitchens and pools, along with permits for industrial waste and water quality issues:
    • Health Department Permits and Inspections
    • County Tax Registrations
    • Industrial Waste Permits

  3. State Permits and Licenses
    State Permits and Licenses can include the Fire Marshal inspections and control of the sale of alcoholic beverages, along with elevator and boiler inspections:
    • State Fire Marshal Inspections
    • Alcoholic Beverage Control Licenses and Inspections
    • Elevator Permits and Inspections
    • Boiler Permits and Inspections
    • State Tax Registrations

  4. Federal Permits and Licenses
    Federal licenses and permits tend to focus on broadcasting licenses for two-way communications and on retail liquor dealer regulation.
    • FCC Licenses for two way radios
    • Federal Tax Stamp for Retail Liquor Sales
    • Postal Meter License
    • FAA Clearances for Part 77 Hazard

On-site Building Code Review

This product is also geared to equity interests related to potential renovation or deferred maintenance budget items. The Building Code Review will involve sending a representative to the site to conduct a physical search of the local files and a physical inspection of the premises. An on-site review tends to be more accurate than a remote review and can be more expeditious in terms of clearing conditions related to a pending transaction. In the event we conduct an on-site code review, we can also offer Americans with Disabilities (ADA) compliance reviews as well.

  1. On-site Building Code Compliance Review
    • On-site public record search for open building code violation issues
    • On-site public record search for building permit records (shell construction only)
    • On-site public record search for Certificates of Occupancy
    • On-site building code compliance inspection

  2. On-site ADA Compliance Review
    Our staff will provide an on-site review of compliance with the provisions of the federal Americans with Disabilities Act (ADA), along with a budget for any necessary retrofit work.

Entitlement Evaluation Report

The full Entitlement Evaluation Report is intended to combine elements of the other four products, along with a comprehensive on-site review of the planning and zoning regulatory environment, into a single document.

The Entitlement Evaluation Report, which includes a site visit and inspection, typically focuses on zoning code issues such as height, setback, parking and density; general/comprehensive plan consistency; and discretionary approvals such as conditional/special use, zone changes and variances. This type of report tends to be directed to equity interests concerned with understanding the chronology of planning actions with respect to the subject property and dealing with the current and future implications of those actions.

  1. On-site Research:
    The basic elements of the Entitlement Evaluation are outlined below:
    • Determination of the current Zoning Designation
      • Complete Zoning Analysis (including a list of permitted uses or testing against a proposed use)

    • Parking count comparison with code required parking
      • Height, setback and density review (based on an on-site inspection)
      • In the case of vacant land or redevelopment situations, provide an entitlement summary of potential height, setback, density and parking limitations (based on information available on-site)

    • Review of prior and pending discretionary approvals, including Planned Unit Developments (PUD’s), development agreements, conditional/special use permits, variances, zone changes, subdivisions and street (ROW) dedications/vacations.
    • Review of easements and CC&R’s
      • Review of General/Comprehensive Plan consistency
      • Public record search for open zoning code violation issues

These elements can be combined with a Zoning Verification Letter, a Building Code Compliance Review, or a Permit and License review to provide an overall look at the regulatory framework constraining a selected property.

The summation of the report will address the following series of seven specific questions that tend to guide the decision making process of the attorneys involved in the transaction. The questions, which go to the heart of the Due Diligence process as it relates to zoning and entitlements, are answered based on the information contained in the body of the document:

  1. Is the existing use of the site (or the proposed use of the site) permitted by the current zoning designation? Hence, is the current use conforming or non-conforming to the requirements of the zoning code?

  2. Was the approval of the existing project the subject of a discretionary action on the part of the local jurisdiction, or is the proposed use subject to discretionary approval, such as a conditional or special use permit, zone change or variance?

  3. Is the existing building a conforming structure with regard to density, height, setback and parking requirements? Alternatively, does the proposed building conform to the density, height, setback and parking requirements of the code?

  4. Are there any open building or zoning code violations on file with the local jurisdiction?

  5. Does the existing building have a valid Certificate of Occupancy which permits the current use of the facility?

  6. Does the project have the required local, state and federal permits and licenses necessary to legally operate the current use?

  7. The key question in the due diligence exercise is: Can the existing facility be rebuilt to its current configuration in the event of a catastrophic loss?