Are You Entitled? Development Rights vs. City Expectations

Are You Entitled? Development Rights vs. City Expectations

By Adam Baugh and Alex Hayes

Whether it’s raw land with no utilities, a complicated infill parcel, or a prime commercial corner, developers face a variety of challenges when attempting to bring their vision to life. Strategies for successfully navigating the complex web of zoning regulations, permitting processes, and local politics vary from jurisdiction to jurisdiction and require expertise and strong relationships. Even when a property might appear to be a perfect fit for a developer’s market strategy, unforeseen issues can arise.

An issue we see regularly is when a property’s existing entitlements do not align with a municipality’s vision or goals for the area. As the Valley matures and the remaining vacant parcels finally develop, some municipalities have opposed development that does not align with their vision, even when the existing entitlements permit the use. This can create a complicated dynamic for a developer, especially when they expect to have future development opportunities in that city. Is the proposed development worth potentially affecting a long term relationship? How steadfast is the municipality’s opposition? How far are we willing to go to protect development rights? These are a few of the questions developers may ask themselves. In such situations, it is essential to have a clear understanding of the property’s entitlements, what development options exist, and what the implications are for each of those scenarios. To be successful, developers must do the following:

1. Due diligence

  • A critical early step is conducting thorough due diligence. This involves researching and understanding the property’s zoning and related entitlements, including whether any stipulations or conditions of approval are applicable. This helps developers identify hurdles early on, allowing them to plan accordingly and avoid costly surprises later in the development process. Recently we uncovered a staff approval from 1991 that established the land use right of a scrap metal dealer a city was trying to shut down. Had we not found that unknown document during the due diligence phase, the opportunity would have passed and the use terminated. Early due diligence matters.

2. Know your facts – What’s allowed?

  • Understanding what uses are permitted by right is essential. Zoning regulations specify the types of land uses, building heights, setbacks, and other parameters that are allowed without the need for special approvals. Developers must be aware of these regulations to assess the feasibility of their projects and determine where the city may have leverage in the entitlement process, particularly if any variances, use permits, or other entitlements are necessary. In the face of municipal opposition, understanding what can be accomplished without needing additional approvals is key.

3. Know your process – Administrative or discretionary?

  • Understanding the processes that may be required to finalize a site plan is essential. In most cases, new development will at least require approval of a site plan. Administrative approvals involve a review by city planning staff and are typically faster and less cumbersome. Discretionary or legislative approvals, on the other hand, require a public hearing and approval by a Planning and Zoning Board or City Council or both. Understanding which type of approval is needed is crucial, as it can significantly impact the timeline, complexity, and risk. This also varies from municipality to municipality. For example, in Queen Creek, site plan approval is an administrative process. In nearby Chandler, the equivalent process requires a public hearing before both the Planning Commission and City Council.

4. Manage expectations

  • Development is often about the art of the possible. Sometimes that means understanding that just because a land use or building height may be permitted by right, it may not be in the best long-term interest to pursue it against the headwind of municipal opposition. Understanding where the opportunities for compromise exist can be key for a project’s success and tee up success for the next one. It’s important to keep one eye on the long road.

At the end of the day, most cities and towns in Arizona are pro-development with supportive planning staff and decision makers. However, the devil is always in the details. Having an experienced land use counsel on your team to navigate the regulatory and political minefields can be the difference between a successful project and a lawsuit.