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NIP DEVELOPERS OFFER THEIR
<br />JDEAS FOR IMPROVING THE RR
<br />-r hen it comes to their working relationship, developers and the cities in which they
<br />operate may well be the "odd couple" of the business world. Although they often have
<br />similar objectives and many times share a common vision of the community's figure, the
<br />relationship frequently stumbles over the processes required to get there.
<br />Here is an overview of the insights and recommendations offered by the developers we surveyed:
<br />MAKE THE "PROCESS MORE
<br />PREDIC7ABLE.AND CONSISTENT
<br />NAIOP developers were almost unanimous about
<br />one improvement: knowing what a city expects of
<br />therm and then being confident that they can rely on
<br />those expectations remaining consistent throughout
<br />the process. They would like to see more cities
<br />make predictability and consistency in their
<br />requirements and expectations a basic principal
<br />in dealing with the development community.
<br />"The key issue is certainty."
<br />— Rick Collins, Ryan Companies
<br />"The key issue for developers is certainty," said
<br />Rick Collins, Ryan Companies. "We need to be
<br />able to commit to a schedule, no matter how
<br />long it actually takes." Another said that
<br />scheduling delays, or a poorly - defined, almost
<br />open -ended process that seems to be made up as
<br />es along, are sufficient reasons by themselves
<br />e out a city completely, and take a project
<br />somewhere else. "Each development opportunity
<br />requires that we manage several different
<br />activities at once," said Greg Anderson, Anderson
<br />Builders. "We need to know that there is a
<br />predetermined and well- communicated process
<br />within respective municipalities."
<br />"Most important to me is knowing what the city
<br />expects and being able to depend on those
<br />expectations being consistent throughout the
<br />process;' added Chris Willson, First Industrial
<br />Realty Trust,
<br />Emphasizing the need for more cities to adopt
<br />"time -and- schedule - sensitive" processes for
<br />reviewing and approving development
<br />proposals, NAIOP developers indicated the
<br />importance of understanding the relationship
<br />between time and money in the development
<br />business, "Timing is essential when committing
<br />to a business tenant's schedules, and we are
<br />always racing against changing weather
<br />conditions in Minnesota," said Dale Glowa,
<br />United Properties. For complex redevelopment
<br />projects in particular, said Arne Cook, First
<br />Industrial Realty Trust, "we need more certain
<br />answers, and we need theta sooner!"
<br />F ''stability is important in controlling the
<br />s according to those responding to the
<br />survey. "City staff must have the professional skills
<br />required to manage the process through to tinal
<br />city council approval," commented one member.
<br />"At the end of the day, the planning staffs need to
<br />direct the process and firmly guide elected officials
<br />to a reasoned decision;" said Paul Maenner, 'PAW
<br />Development, LLC. Added Cook, "problems
<br />develop when a city council does not empower its
<br />professional planning staff to do their jobs, or
<br />even ignores their recommendations." An
<br />additional challenge was cited by Joe Weis, Weis
<br />Builders, who observed that, in his experience,
<br />"city councils and their planning commissions are
<br />losing control of the zoning process to the
<br />neighborhoods."
<br />The solution, said John Wall, Wall Companies, is
<br />for, "a city's leadership to look ahead, agree on a
<br />vision and then try to rally their bureaucracy to
<br />pursue the same objective."
<br />COMMUNICATE 'SETTER WITH THE
<br />DEVELOPER— RESPOND 'O,DiCXLY AND
<br />ACCURATED/
<br />An open question in developers' minds seems to
<br />be whether some city staffs "truly mirror the
<br />views of their own councils." Making sure that
<br />city staff and council members are in harmony
<br />on where the city is headed adds significantly to
<br />the reliability of the process and the
<br />predictability of the outcome. Cities that view
<br />their staffs as true experts, and value their
<br />reports and recommendations, are the best to
<br />work with, said several respondents.
<br />"Timely and straightforward communications
<br />are critical," said Rick Martens, Brookstone
<br />Development, Inc. "Un- returned phone calls,
<br />hard -to- arrange meetings are a problem. Even if
<br />the news is not good, we need to know. We can't
<br />operate in a realm of uncertainty"
<br />"Initial staff feedback on our development
<br />concepts is crucial," explained Maenner. "It's the
<br />key to our 'go forward' or `drop' decision." Once
<br />that initial staff assessment is made, it must be in
<br />a form that is reliable and can be acted upon,
<br />without fear of future unanticipated demands or
<br />changing requirements, he added.
<br />"With the right access to the right
<br />people, we can make decisions that
<br />speed up the process and ensure that
<br />things are accomplished properly."
<br />- Scott Tankenotf, Hillcrest Development
<br />Ready access to city staff is part of the
<br />communications challenge, too, according to
<br />Scott Tankenoff, Hillcrest Development. "With
<br />the right access to the ri ' -:pie, we can make
<br />decisions that speed up the process and ensure
<br />that things are accomplished properly," he said.
<br />Said another member: "Tell me what exactly
<br />what I have to do, and when I have to do it. But
<br />don't keep me guessing. The development
<br />process and surprises just don't mix." Calling
<br />sudden changes of direction, or changes in
<br />requirements, the "bane of the development
<br />business," others interviewed pointed out that
<br />city staff needs to understand and appreciate
<br />that they are always racing against
<br />challenges — Minnesota's weather, for example, "or
<br />the need to maintain site control, always difficult
<br />under the best conditions," according to David
<br />Garland, CSM Corp., or, "the ability to commit
<br />to prospective tenants that we can deliver their
<br />space in time," said another. Greg Munson,
<br />McGough Development, also pointed out the
<br />difficulty of closing on the financing for a
<br />project if final city approvals are unexpectedly
<br />delayed due to changes in city requirements.
<br />"The quicker we can flush out the issues that
<br />matter, the better," said Tony Kuechle, United
<br />Properties. "It will save both city staff and us a
<br />lot of time and money."
<br />WEEP THE COSTS INVOLVED IN TH
<br />PROCESS PAM AND PROdECT:r'BEI..%'
<br />Apparently nothing quite sets a developer's teeth
<br />on edge like the frequently uttered phrase, "fees."
<br />In our survey, and in other in- person interviews
<br />conducted with NAIOP members who are
<br />fulltime developers, many made the point that
<br />they have nothing against being charged and
<br />paying realistic costs for infrastructure
<br />improvements directly related to their proposals.
<br />What seems grossly unfair to them are fees or
<br />costs that, in their view, are unconnected to their
<br />proposals. Said Glowa, "We receive absolutely no
<br />value for the park dedication fees we are
<br />required to pay. They should be eliminated?'
<br />Added another, "Park dedication fees are a very
<br />large cost from which we receive no direct
<br />benefits that I can see. They only benefit
<br />residents in another area of the community."
<br />NAIOP developers are not anti -fee, and certainly
<br />understand the cost pressures currently facing
<br />municipalities. However, many questioned city-
<br />imposed fees where there is no connection to the
<br />project they are proposing. "Cities must stop
<br />increasing or adding fees just because they need
<br />more revenue," observed Craig Patterson, Welsh
<br />Development, LLC. "Stop adding extra charges
<br />to fix other city budget problems," said another
<br />developer, advising them to instead, "encourage
<br />capital reinvestment in their land base. The long-
<br />term benefits would outweigh the short -term
<br />gain from fee generation."
<br />Others pointed to excessive costs resulting from
<br />the use of outside consultants. "Cities should
<br />actively participate in controlling consultants'
<br />fees, which are a pass - through," said Munson.
<br />"Developers are expected to manage all of our
<br />consultants to a certain budget, but we can't
<br />control the city's consultants. While it is obvious
<br />that cities must rely on some outside services,
<br />4248 Pork Glen Road • Minneapolis. MN 55416 • p: (952) 92 8-7461 • f: (952) 929 -1318 • www.naiopmn.orq • «J Copyright 2005 Minnesota Chapter of NAIOP �( NAIOP
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