June 17, 2015 Eric Bethany

First Steps in Commercial Redevelopment:
Where We Start

225 Ottley Exterior

We specialize in intown redevelopment.  That means that we get called almost daily to help figure out how to turn a blighted property into something amazing – something that will provide value for the developer, the community, and the future occupants.

We get the call because there is a desire for change—specifically a change of use for a building.  When we work in Atlanta, this has the legal requirement that the new use conform with the current zoning ordinance as well as the current building and life safety codes.

Buyers and sellers (and their brokers) call us because they need to determine a value for the property.  The value of the property is directly linked to income potential based upon how much we can responsibly fit on the site (more on “responsible” site development below).  While zoning constraints can sometimes seem simple—like maximum square footage allowed is tied to lot area–there are typically underlying, less obvious constraints that actually determine maximum practical square footage.

Under most portions of the Atlanta zoning ordinance, parking is the usual driver that determines density, not square footage limitations, particularly when a structured parking deck is not a feasible development option.  The more you can park, the more you can build—so it is critical for developers to hire capable design teams familiar with the Atlanta’s processes if they want to achieve their goal of a financially viable investment. The outcome for us is that we  are now, by necessity, very adept in this process and have become one of the more creative parking lot designers in the City of Atlanta.  After all, if we did not know the nitty gritty details of site development, we would never get to the fun part of designing beautiful, community-enhancing projects throughout our Atlanta neighborhoods!

We typically ask new clients to sign us up for a baseline site study.  The goal of this analysis is to look at how much of an existing building we can save and repurpose, and how much parking can fit on the site.  This provides a very accurate vision for what is possible for a project.  It is not an in-depth design study, but a critical first step in pegging possibilities to a place.  (You’ll learn more about baseline site studies in an upcoming blog post.)

Often times, there is not a workable deal under current zoning constraints.  Therefore, the next step in our process is to provide political feedback regarding the viability in pursuing either variances or rezonings to facilitate the responsible maximization of a site.  Responsible is a critical word, not used lightly.  We see the responsible component as a code word for what we think is both right for the site, and something for which we can rally community support during the process of securing entitlement approvals. We have spent the last 15 years building political capital with a wide range of intown communities, and we have the privilege of being able to pick and choose the projects we will take through a community process. We do not waste it on what we deem as inappropriate projects or projects that are not benefitting the neighborhoods we design for.  We also are able to shoot straight with our clients in giving feedback on whether they have a reasonable chance of getting approvals or if they are simply not setting achievable goals.

In the end, this process is tremendously empowering for a client and is ideally complete before a property is put under contract.  Timelines for entitlements are critical and need to be properly addressed in a purchase contract.  It is extremely difficult to go back to a seller and ask for more time once the contract is signed.   The flip side is that if we can provide a viable as-of-right redevelopment option, the buyer has the opportunity to provide a more competitive offer with limited inspection periods.

We have often heard the advice given to young developers to steer clear of sites that have entitlement issues.  However, we see a practical benefit in these properties, because in many places it is only these challenged locations that can be obtained at a reasonable price.  There are always risks associated with zoning modifications that drive down the price.  Gaining a clear picture of the time, cost, and likelihood of success are critical early steps in determining whether the pursuit of such properties is worth the effort.  In the end, this extra step can bring the right developer to a suitable property, and through neighborhood engagement, it can result in well-matched development for a community.

About the Author

Eric Bethany A graduate of Tulane University in New Orleans, Louisiana, Eric Bethany joined KWA in 2015. In addition to contributing to the architectural activities of the firm, Eric works with principal Eric Kronberg to compile and publish research on KWA's Urban Space blog and helps manage KWA's marketing efforts.

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