By Taralinda Willis
The field of construction is highly regulated at the local level. In most municipalities, new construction projects must go through a lengthy process of presenting their plans to neighbors, local elected officials, and city staff for a variety of approvals before they can break ground.
At each step of the process, the project can get blocked or stalled by opposition from a voting body or the public or the developer could decide not to pursue the project because the local standards will make the cost too high.
But as the project moves forward, the owner will begin to solicit the services of a variety of vendors, from architects and civil engineers to commercial lenders and general contractors. To improve their chances of winning business from commercial developers, these vendors must pay close attention to the approvals process.
New construction projects go through so many levels of regulation and public review that it can be hard to gauge how much traction the project has at any given point unless you understand the purpose of each step in the process.
The following is a friendly guide to understanding the major public approval steps you might see a proposed new commercial development go through at the local level. Although each municipality has variations on this process, most cities and towns require a developer to gain some or all of the following approvals before breaking ground on a new project.
- Some municipalities require that the owner of a proposed new development notify all businesses and residences within 300 feet of the project address about the upcoming project before ever applying for city approval. In some cases, developers may do this even if it is not required by law.
- Timing: 6–12 months before groundbreaking
- Keeping Track: The architectural team may send a postcard to every address in a 300-foot radius from the project inviting neighbors to an informational meeting. The meeting is open to the public, but if you’re not in the neighborhood, you are not likely to find out about it. To find projects at this stage, it’s best to read local newspapers and check in with your network about any proposed projects they know about. Alders, neighborhood representatives and chairs of homeowners associations are also typically in the know regarding upcoming community engagement presentations and Q&As.
- Why It Matters: This is often the first time a proposed project is made public in any way.
- The developer brings their ideas for whatever they’re going to develop to the local governing authority, which might be the planning commission or the city council, depending on the size of the municipality. The developer will get input from the voting body about their support or opposition for the project and what changes the developer might need to make to the plans to get approval.
- Timing: 6–8 months before groundbreaking
- Keeping Track: The conceptual review will be listed as an item on the council meeting agenda and/or on the municipality’s online event calendar, typically a week or two prior to the meeting.
- Why It Matters: At this point, the developer will usually need to hire a civil engineer and an architect to produce the required materials and complete the application for the next steps in the approval process. They may also begin reaching out to general contractors to get an estimate for the cost of the project, and they will probably begin talking to commercial lenders to line up financing.
Application to Planning Commission
- If a project has gained enough support during the conceptual stages, the developer will submit an application for initial approval of the development plan from the planning commission, followed by approval from the city council or equivalent governing body. The plan spells out all of the details of the project, including the usage, size, density, height, parking ratio, and the plan for things like stormwater management. This application is often packaged with four or five related requests that must also gain approval for the project to move forward. These might include, but are not limited to:
- Rezoning: If the land or existing building(s) are zoned for a different use than the proposed project, the owner must request that the lot be rezoned to allow for the new use. For example, if the land is currently agricultural, and the developer wants to build a 4-story, 75-unit apartment complex, they must request the land be rezoned to multifamily. Rezoning can be time-consuming and difficult, and sometimes land owners request a rezoning in order to improve the value of their land for a future sale.
- Comprehensive Plan Amendment: A rezoning request often also prompts a need to change the city’s comprehensive plan, which defines the guidelines for future development and growth in a municipality. The developer will need to make a case for why their intended use is a better fit for the site than what the community had previously planned.
- Conditional Use Permit: Sometimes a property is zoned for a specific use, but the zoning ordinance also allows for other uses, if planning staff and voting bodies approve of the specific use. To get that approval, developers must apply for a conditional use permit. One example is a multi-family building with retail on the first floor. The planning committee might only approve of the retail space if the developer intends to use it for a coffee shop or another use that is seen as a benefit to the surrounding residences.
- Certified Survey Map: For legal purposes, land owners will often request that a property be re-surveyed to change property lines and separate land that is slated to be developed land from land that will remain undeveloped. This request is usually not as contentious as the development proposal itself.
- Other approvals: In some municipalities, a developer might need to show that they have already gotten approval from smaller committees within the municipality, such as a traffic committee, a forestry committee, or a sustainability committee, showing that the project meets the standards the city has established for those areas.
- Timing: 3–5 months before groundbreaking
- Keeping Track: All of the necessary applications will typically show up in one agenda item on the city’s planning committee agenda, and then on the city council agenda after passing the planning committee. The public has an opportunity to comment on the project at these formal approval request meetings.
- Why It Matters: The initial approval is the hardest step of the process. It is where the most objections will be raised, and developers may need to make many changes to their plans before gaining approval. After approval, the project has a high likelihood of coming to fruition.
Sale of Land/Building
- After a developer has gained approval for the proposed project, and completed most or all of the financing arrangements, they will finalize the purchase of the land or the building that will be redeveloped. Typically, the buyer and the seller will have had a contract for sale since the very beginning of the approval process, but that contract is not a matter of public record. A developer will typically have a contingency in the contract that allows them to back out if the project does not gain approval.
- Timing: 1–2 months before groundbreaking
- Keeping Track: All real estate transactions are a matter of public record, and the records are usually accessible through a searchable database on the city assessor’s website, the county register of deeds, or another government database such as a Land Records Database.
- Why It Matters: Once a sale goes through, almost all of the project’s major vendors will be locked in and the project is almost guaranteed to come to fruition. The general contractor will be gearing up for the groundbreaking and beginning to line up specialty subcontractors.
- The project architect will submit plans to the city’s Building Inspection office, which will make sure the project meets all relevant codes. Once the Building Permit is issued, the project is cleared for groundbreaking, and the developer is often obligated to begin construction within one year.
- Timing: 1–2 weeks before groundbreaking
- Keeping Track: Building Permits are listed in the city’s Building Inspection records database, which is usually available online for free.
- Why It Matters: The building permit lists the address of the project, the total cost, the owner, and the general contractor, making it a useful lead for subcontractors looking to bid on construction work or vendors who might serve the ongoing needs of the development once it is completed.
Turning construction project intel into new business
A good rule of thumb for the construction industry is that it is never too early to reach out to a project owner to offer your services. But as this guide makes clear, it can be a waste of everyone’s time to reach out after a project has reached a certain point. For example, there’s no sense offering general contractor services after the sale of a building or property is recorded in the county register of deeds because the developer will have likely lined up a contractor months ahead of time.
To make sure you find projects early enough in the process to offer your services, you need to systematically track the databases and notices that inform the public about proposed projects. The best way to do this is to use a custom tool for tracking municipal meeting agendas and minutes, especially if your coverage area includes more than one city or county.
Curate was developed from the ground up as an AI-powered business development solution for firms in the construction industry. Curate customers get alerts about every construction project in their coverage area as it moves through the approvals process by tracking local government meeting minutes and agendas.
To find out how Curate can help you stay in the know about construction projects in your area, schedule a discovery call.