|Zoning Due Diligence||Entitlement Evaluation Reports|
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.
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.
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.
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: