Constraints

Written by  //  March 14, 2011  //  Retail Feasibility  //  2 Comments

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After gaining an understanding of the environment in which the project sits, the next step is to determine the constraints which need to be accounted for. Constraints include physical attributes, market realities, and government regulations.

As a developer, government regulations such as rights-of-way, public space requirements, environmentally sensitive areas, parking requirements, set backs, site coverage, floor space ratios, maximum heights, and land use restrictions all play an important role in determining what is feasible on any given site.

A municipality must contend with the same issues but through a different perspective since it is ultimately the one imposing such restrictions. During a rezoning process, municipal planners may recognize the implications of these restrictions and wish to relax certain regulations. To do so, however, requires understanding as to why these restrictions are there in the first place. Is the district in a watershed at risk of flooding? Are local roads over capacity? Is there strong local opposition to increased heights and density?

In some cases, physical attributes and market realities might prevent a developer from even reaching the maximum buildable area allowed by government regulation. Retail developments in suburban Edmonton, for example, are restricted in size primarily from the high construction cost of building underground parking in relation to the future achievable rents. With 4-5 parking spaces needed per 1,000 f2 of retail (requirement from retailers), higher floor space ratios from municipal authorities have little impact on the actual built density. In these circumstances, both developers and municipalities are ultimately constrained by market forces out of their control.

Municipal planners and developers can agree on one thing the importance of the rezoning process being certain and predictable. Municipal constraints are generally flexible, but without a relatively clear understanding as to what can be expected from both ends, the negotiation process will be overly frustrating. At the end of the day, private sector forces must be able to price land parcels according to their future potential in order to start the redevelopment process. An ad hoc and unpredictable rezoning system can paralyze this process as the risks scare developers away. Every project is unique and a flexible negotiation process is important, but clear targets and objectives can help build transparency.

Better communication between both sides will pay off significantly over the long term. For a developer, getting municipal authorities on board for a rezoning requires the presentation of a convincing plan which is well researched and has demonstrable public good. Experienced planners should be retained to negotiate with the city and consult with the public through this process. The additional cost of taking this part of the process seriously is more than worth it on complex projects considering the risks involved in having a rezoning application rejected. The earlier municipalities and the public are consulted, the more they will feel a part of the project, and the greater the chance of securing support. Generally, municipalities welcome this process as it provides them the opportunity to voice issues and request provisions.

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Reurbanist

Reurbanist is a multi-disciplinary firm that blends land use economics with urban planning and economic development. At its core, Reurbanist believes that great urban places that are compelling and vibrant must find success at both a fiscal and social level. Stronger cities and urban destinations translate into improved job growth, municipal tax revenue, and a higher quality of life for residents.

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