3 Steps to a Successful Commercial Real Estate Developer/Municipality Partnership

4.18.2017

By: Steven Denholtz, Chief Executive Officer

Let me say at the outset – public/private partnerships are not easy!!  But local real estate initiatives are significantly strengthened by the synergy of municipal leaders and developers establishing effective mechanisms to work together.  A successful project will reap rewards for both the local community and those that invest in it.

I’ve witnessed failed partnerships and heard my share of horror stories. I’ve been frustrated and discouraged but also partnered with some great cities and towns to build projects that enhanced community aesthetics, added jobs, and provided new and innovative living options.

Vocabulary is important.  Municipalities seeking private development must ensure that their municipal officials are educated on the realities of private development as well as economics and community planning. Speed to market is critical.  Talking the same language is essential to attract the quality developers that help communities thrive.

No two municipalities are the same and, of course, there will always be challenges, but a spirit of collaboration can go a long way. Below are some tried and true tactics we have developed over the past 65 years for working closely with cities and towns across the nation to ensure success.

1. Be willing to compromise. Be flexible and make this known from the outset – Exploration of all options is arguably the most important strategy to keep in mind prior to and during work with a municipality. Often, developers believe that their project, as formulated by their team of engineers, planners and financiers, is the best possible use for the town. They imagine a fully formed project that will check off every box on their wish list, eg., high-density, set back variances or a retail project at the corner of the most highly trafficked intersection in an affluent area.  But a town is often unwilling to approve such a project. Unfortunately, this realization is one that every developer will face on almost every project. We have seen resistance to our “perfect” plans come from a wide range of sources, whether it was a group of concerned local citizens or the town council.  By adapting, or adding or subtracting features to better reflect a town’s residents and vision, we have been able to overcome this resistance and successfully construct collaborative projects that represent the best uses for the town.

2. Engage stakeholders – In our highly-connected era, maintaining efficient lines of communication with stakeholders in a town is not an option. It’s a must.  And make sure your team speaks with one voice.  If decisions are made on the spot, it is important to closely communicate all changes.  Meeting minutes are important.  Whether it’s a local environmental group, a municipal leader, or an influential community member, proactively forge a strong working relationships with as many stakeholders as possible. Trying to keep the public or leadership in the dark about potentially upsetting portions of a project will generally backfire and create an uncorrectable breach of trust between the developer and the town. Open, trusting relationship are the best tool to ensure that the municipalities hear our concerns and consider adopting them.

3. Be patient but also persistent – Projects don’t come together over night. Receipt of approvals is typically lengthy, especially when they involve environmentally sensitive issues or complexities that impact traffic patterns or usage.  These cause headaches and delays for both the developer and the city/town. It is essential to maintain momentum and push ahead on the permitting and approvals process each time it becomes possible to do so. Waiting for resolution of each aspect of a project before taking the next step will delay you.  A back step now and then may occur – but those are risks that should be taken.

Following these best practices has allowed Denholtz Associates to successfully collaborate with dozens of municipalities to fulfill our core mission of adding value to the communities we work and invest in. We are currently developing projects in Clark, NJ, Red Bank, NJ, and St. Petersburg, FL.  Each of these mixed-use projects has required great efforts from all involved. We look forward to continuing to work to build stronger and more vibrant communities with our municipal partners.