Mixed-Use Projects: A Development Checklist
Mixed-use projects involve a number of players: the master developer; co-developers; parcel owners/landlords; associations such as master associations, condominium associations and homeowner associations; retail and office tenants; lenders; and governmental and quasi-government authorities.
Following is a checklist to help the developer provide initial information that its counsel will need when embarking on the development or redevelopment of a mixed-use project. The master developer’s counsel on a mixed-use project should be the document "gatekeeper." To draft and negotiate documents effectively and efficiently, the master developer’s counsel needs to communicate and closely work with the project development team, including land use and zoning counsel, the surveyor, the architect, the engineer and the developer. All parties should review and understand the elements in this list.
- Proposed Uses: What are the proposed uses of each parcel in the project, including location of buildings, facilities, infrastructure, and amenities? Which uses will be integrated and which will be independent from one another, and if integrated, how are they intended to function?
- Intended Users: Who are the intended users of each parcel, including whether or not it is anticipated that each parcel will be developed by the master developer, a co-developer or another parcel owner/landlord?
- Ownership Structure: What is the ownership structure for each parcel, (i.e., will there be various entities created for each parcel for financing and/or liability purposes)?
- Subdivision: Is subdivision necessary, and if so, what portion of the property is intended to be subdivided, and what governmental approvals are required in order to develop the property in accordance with the proposed uses?
- Alternatives to Subdivision: Instead of subdivision, would possible alternatives such as the creation of land condominiums, air rights parcels, ownership lots, or mortgage lease line lots accomplish the developer's goals?
- Financing: How will the different components of the project be financed?
- Government Programs: Has the developer evaluated the project from the standpoint of federal, state or local programs such as tax increment financing, enterprise zones, new market tax credits, low income tax credits, retail business districts, and brownfields laws?
- Phasing: What portion of the project will be built first, what portion will be phased and what is the intended phasing schedule?
- Access: How does the project "work" from an access, ingress and egress standpoint (designating private and public roads)?
- Shared Facilities: Which facilities, common areas and utilities will be shared by all, which will be shared by a few, which will be controlled by one owner or tenant, and how will costs will be allocated for any shared facilities? Which amenities are required to be provided by the local governmental authority for use by the public?
- Control and Management: How long does the master developer expect or need to be in control of the project? How will the project or the various components thereof be managed?
Mixed-use projects can take on lives of their own, and many things change during the life of a project, so it is prudent to revisit and modify this list periodically during project development.
Sharon Nelson Craig is an attorney at Lerch, Early & Brewer in Bethesda, Maryland who practices in the area of real estate transactions, including the sale, purchase and leasing of commercial real estate, condominium formation and mixed-use project development. She and the firm's land use attorneys work together to provide cost-effective management for master developers. For more information about mixed-use development, contact Sharon at (301) 841-3836 or firstname.lastname@example.org.