One of the most important factors, if not the most important factor, when buying or selling land is knowing what can and cannot legally be built on the site. Fully entitled land is the the type of land that has received all the necessary governmental and regulatory approvals for a particular use on a specific piece of property.
Understanding a property’s current zoning and future land use is critical for developers and land brokers as this sets the baseline of what properties can and can’t legally be built. These guidelines generally include the types of allowed buildings (industrial, retail, multi-family, etc.), minimum and maximum size requirements (either in terms of square footage or units), parking requirements and the like.
However, just because the zoning and future land use may allow for a certain development, that does not necessary mean the type of development is truly feasible, and certainly doesn’t guarantee that it will receive the necessary entitlements. The process taken by developers, to get to the actual government approvals to build their development, is known as the entitlement process.
Depending on the governmental jurisdictions, where a property is located, the entitlement process can be prolonged and tedious. Not only does the development have to comply with zoning and future land use from that municipality, it also has to conform to things such as storm water runoff requirements, connections to off-site utilities, including electricity, water, sewer, gas and cable lines. In addition, the developer will almost assuredly have to get approval from the Department of Transportation regarding ingress and egress to the development. Often times, large developments or developments on main thoroughfares can trigger the need for additional infrastructure, such as turn lanes, traffic lights, etc. which can add on hundreds of thousands of dollars to a project. Also, in many cases, approvals from the Department of Environmental Projection and/or the Army Corps of Engineers will be needed in order to protect wetlands or conservation lands.
These are just a few examples of the many approvals that developers must navigate in order to actually receive the entitlements to develop a property. Navigating this process can be lengthy and costly, so land brokers and developers who have a firm understanding of that process possess a great advantage to anyone looking into making a land purchase.
About Chris Palmer – Chris has been working with commercial real estate in Pensacola, Florida since 2010. He primary specializes in working with commercial real estate clients on development and investment related properties. Click here to read his full bio, or if you would like to contact him, you can call him at 850-610-8339 or email him at [email protected]