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Want To Know The Bullshit It Takes To Get A Project Approved? Commercial Real Estate Reality.

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This may have happened.

Without getting too much into detail because I do not want to get sued and I want this guy to read this and maybe still not know it’s him. This is a conversation I had with an actual person who sits on a board that decides what projects get the political OK. There will be no names or references to the actual project. Did I say I did not want to get sued?

To set the scene I am sitting in the fourth row on the right hand side of the room. Up in front of me is a semi-circular row of seats for the board members behind clean blond wood . Microphones and name plates are in front of each person. In my hand is the agenda for the meeting each project in order. The agenda has already been thru a “staff” meeting so that every board member already knows what each project is. The process to even get a project on the agenda has already taken months of meetings and approvals. Without getting into detail I am assuming that most of you reading this understand most of the process. To even get to this point plans have been submitted. The state the county and the city have specific requirements that must be met. A good example is the size and number of parking spaces that are allowed depending on the size of the lot and the building density. I know this is basic stuff but some people may not know.

To most of the people in the room much of the agenda voting is a fore gone conclusion. Several yea’s on most projects. Some abstaining because the board member has a stake in the project which happens more that most would think. The occasional nay because it’s close to one of the board members friends back yard. The nay vote doesn’t stop the project but gives the board member a chance to look his friend in the eye and say “hey I voted no.”

Occasionally something will get tabled. That means that something has come up or better put someone in the neighborhood or some lawyer has sent in a letter saying they don’t want the project completed. There is always an open forum and time for public comment on each project. If ten or more neighbors show up to talk about your project in person you are in trouble. Nobody on the board wants to be seen as someone who doesn’t “listen” to the public.

I know I may be digressing a bit but I have learned to sit there quietly and just show my face. A big part of this is see and be seen. On most occasions there is a lawyer representing the project. If it’s a major one the TV stations will have some bright-eyed intern show up with a camera and try to get comments from both sides. I try my best to avoid the camera always (don’t assume) because nothing good really comes from it.

So here I sit waiting for a project to come up for a vote. There is a call for public comment. Nobody stands up which is a good sign. The lawyer steps up and quickly goes thru the simple details of the project and then sits. The chairman then asks for any comment from the board and one of them speaks up.

” I need clarification on a few things.”

The lawyer stands quietly and moves to the public podium. ” What can I help you with sir?”

” I know we have looked at this project for a few months but I still have a concerns about the density of the units and the parking on this lot.”

” All of the proposed units are within all government guidelines and the parking is exactly what the staff required. We have not asked for any variances or exceptions and have the staff approvals.”

” Yes I see that. I am not sure this is the kind of project that this neighborhoods needs at this time.”

Well FUCK! Out of nowhere this guy has decided he and only he is the one who needs to decide what project a neighborhood he does not live within twenty fucking miles of needs and he waits until the very last second to say so.

” This is a quality project with millions of dollars of investment into the community not to mention the tax dollars it will generate for the different government entities.” The lawyer now addresses not only the board but the public seated behind. ” There is no opposition from the neighbors that we are aware of.”

” You have talked to all of the residents in the neighborhood?”

” We sent letters and held a public meeting at the community center. Once the details were explained we had a positive response from them”

The board member looks down at some papers and then to the chairman ” I would like to table this until next months meeting. I think we need more public input.”

The chairman looks up and down the seated rows ” any objection to tabling this until next month?”

Silence. ” Motion to table.”

” Motion” from the board member and he then turned to his left.

” Motioned seconded.” from the board member to his left.

” Motion carried. Next item on the agenda.”

It was over that quick. The lawyer glanced my way and then sat. I stood up and went outside. The lawyer followed.

” Don’t say anything. I will try to find out what happened.”

” Don’t say anything? Do you know who I need to call and tell them what happened. Do you realise how much money has already been spent? Do you want to make that call? You are going to get paid no matter what right?”

” That’s not the point. I will make some calls and give you some feedback as soon as I can. We did everything right here.”

” No we didn’t or we would be starting on the construction scheduling.”

” Let’s regroup tomorrow and maybe meet later in the afternoon.”

With that he walked away. I hung back as the meeting was still in progress.

The remaining people started to trickle thru the door of the conference room. The newspaper reporter talked to someone wearing a t-shirt that said ” Buy Local Buy Fresh” and the board members were that last to file out. As I stood near the exit of the door the dissenting board member caught my eye. He hesitated acknowledged me and then walks towards me.

” Hello, how are you this evening?”

” I’m doing just fine, would you mind explaining your reason to table that project and why now and not six months ago before we went thru the entire process?”

” I just took a second look at it and it doesn’t seem to be the right time or the right fit for that neighborhood.”

” And you base this on what?”

” I’m not sure that it’s what the neighborhood needs.”

” I think we have established that you and only you don’t think it’s not what you want.”

” That’s not what I said.”

” So there is somebody else that does not want the project. Who is it let me talk to them? Do you have specific names?”

” I’m not sure that is necessary.”

”¬†You mean not necessary for you but not us. We have to send letters have meetings solicit approvals and submit documentation but you have to do what, nothing? That’s how it works for you right?

” That’s not they way it is. You have a project that I have questions about.”

” So again at what point in the last six months did you not see the need to bring up those questions?”

” They didn’t surface until just recently.”

” So what made them come up?”

” I did a drive buy and made some notes.”

” When last week? Did this just now get your attention?”

” Listen I have paid the proper attention to this as with all the other projects we have in front of us.”

” So this is just one of the many, that’s what you are saying.”

” This position takes up quite a bit of time.”

” Well I’m sorry you have to take time away from you busy life. What did you think you were signing up for? Please don’t give me the I’m just giving back to my community speech. How many projects have you personally got on the table? I know of at least two right now.”

‘ My personal projects are not what we are talking about here.”

“Oh, I agree but when was the last time one of you projects got tabled at the very last-minute at the cost of potential millions?”

” I think you are over stating this.”

” Maybe I am just stating the facts. So tell me in your infinite wisdom what you think the neighborhood really needs.”

” Well again I think the density is too much for that site.”

” It has to be that dense to make any money for one and that’s what the actual zoning allows. What kind of density are you talking about?”

” Well we are getting into big city high-rise type projects and they don’t fit.”

” It doesn’t fit how? This is exactly what the dare I say it the public wants. You think we are going to turn into downtown Chicago in the next ten years? Are you the one who will personally save the city from the urban blight?”

” We don’t need that many people and cars on that small of a sight.”

” How about that fifteen unit proposal you are working on? That seems like a big number to me. Why don’t you just build a nice single family low-income house on that site and donate it to the city. Why fifteen units? Wait you want to make money. You did get the zoning changed to try to get that density did you not?”

” That project is still in the planning stages. We are still looking at options.”

” So tell me what you want us to do.”

” When I drove by I remember the restaurant that use to be there, was that property originally owned by your family?”

” Long is a very common name so no.”

” That was always a great place. I use to go there every time there was a basketball game with my family.”

” That was a long time ago. They closed when the economy went bad just like a lot of other places. The present owners tried to keep it going but they were losing money every day. They came to me to get a value for the land and long story short we made a purchase. They were ecstatic. I think they are in Florida.”

” Is there not another possible user who could make it go?”

” How much money do you have? I want you to be that user. Let’s make a deal. I will give you a rental rate and then you put up the possible millions and personally guarantee¬†that the place will stay there for at least five years.”

” I”m not talking about me personally.”

” Why not you seem to have the passion for the space? We have done some numbers. You want some other fool to lose a fortune just so you can have a sandwich just like old times?”

” How about a chain restaurant like Cracker Barrel?

” It’s called demographics traffic counts allowable use. They would not look at anything close to this size and besides how many parking spaces do you think that would require? Are you going to OK something like that? Hell no.”

” I also thought it might have some historical significance.”

” Really are you going to try that? I will have the entire historical association show up at the staff meeting just to debate it. Guess what the end result will be? It does not have any historical value and they cannot and will not participate.”

” How do you know that?”

” I already talked to them. The president lives around the corner from me.”

” Are you sure?”

” Yes, give him a call. They have about fifty more buildings that they are paying attention to.”

” So tell me the real reason you delayed this. If it’s political as in personally political I will find out.”

” I’m not sure what you mean.”

” I will have my lawyer call you tomorrow.”

” Why do you need your lawyer to call?”

” It’s what I pay him for.”

” It does not seem necessary.”

” I agree it should not be necessary.”

” I’m not sure what I would say any different to him that I’m not telling you now.”

” It’s late and I am hungry for dinner. Nice talking to you. I hope to see you at the Fire Department fish fry next week.”

My phone rings I reach to look and slow down. I hate it when people pay more attention to their phone than the three thousand pound car they are driving. I pull over and answer.

” Hello, yes this is Duke.”

” Duke is this a good time?”

It’s my lawyer. ” Yes I am just pulling over.”

” I made the call and to make it clean and simple he wants you to call and get an endorsement for his project from the developer of that huge mixed multi unit building across the street from his.”

” Why didn’t he ask me himself? Why doesn’t he ask the developer himself?”

” He knows that you know him and he wants his deal to go thru and he thinks that this will help get it done.”

” So he is holding my deal up to make sure his gets done.”

” You can frame it how you want. That’s what he said.”

” I have a question. Are you going to represent him on his deal?”

” It’s been discussed but as of this time I am not.”

” Call him back and tell him I will make the call and get it done.”

” Will do.”

I am sitting in the parking lot of some fast food place car running heater on. I scroll thru my contacts and make the call and leave a message for a call back.

A month later I am at the same meeting agenda in hand. My project gets called. My lawyer stands up and walks to the podium. He goes thru the motions. There is a call for a vote. All yeas accept one. It passes.

Further down the agenda I notice a project number for a fifteen unit building. It comes up for discussion and a vote.

The vote is called many yeas but one member of the board speaks up. ” Why are we putting a small multi unit building across from a multi story retail and residential complex? It seems out-of-place.”

My lawyer now representing this projects stands back up. ” We have all approvals and an endorsement from the developer of the complex across the street. He thinks it would be a good addition to the neighborhood.”

” It does not seem to fit the neighborhood at all.”

The lawyer looks at the other board member and with a nod looks to the chairman “we would like to take this project off the agenda for this month and look at the possibility of putting it on at a later date.”

The chairman speaks up. ” Motion to take off the agenda?”

The lawyer turns and looks at me as he goes to sit. As the meeting ends I go outside and the lawyer follows.

I lean against the wall opposite the conference room door ” it doesn’t look our boys projects is going to make it.”

” Not looking good even with the endorsement. Any thoughts?

” Yea, he needs to learn to play better politics.”

 

 

 

 

photo credit: <a href=”http://www.flickr.com/photos/ocarchives/3952964087/”>Orange County Archives</a> via <a href=”http://photopin.com”>photopin</a> <a href=”http://creativecommons.org/licenses/by/2.0/”>cc</a>

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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  • Bob Schecter

    You need a different lawyer.

  • #1 Rule – Every cre deal involves politics of some kind, shape or form. It seems insidious, but it is the human condition and it is reality. There is ALWAYS an agenda. The trick is learning what the agenda is.

  • Paul B.

    There will always be naysayers for each project who must express a nebulous objection to conform with the public opinion in his area of jurisdiction. This is the bain of most projects and the domain of the attorneys who bask in the action on behalf of the developers. It’s no wonder that anything get approved and built. I recall on one major project that the developer already sunk half a million in fees only to have their project delayed through another midwest winter. Duke, your synopsis brings up memories of many a late night before government and city council members answering stupid questions that had nothing to do with progress. Anyway thanks for sharing.

  • Charlie M

    With real estate projects there will always be the difficult task of aligning the incentives of the developer, the local government, and the community members. Often I see people making the mistake that the community members and government want the same thing, but they definitely see things from a different angle. For the government, it’s more about perception whereas the people see the reality of their changing neighborhoods. For example, if a developer drops a trophy apartment building into a neighborhood that is becoming gentrified, but offers a large % of affordable housing, that provides the politician a talking point in their next election. However, the local people just see a big development that is driving their neighbors off the streets.