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Thread: Negotiating with developers

  1. #1
    Cyburbian
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    Negotiating with developers

    Some city governments seem to me bend over backwards to help developers realize their plans. I would think that if a town or city has its comprehensive plan in order and up to date and thus knows specifically what the people want for the future, that it is in a good position to negotiate with developers proposing large projects. Why shouldn't the town, in telling a developer what it can do for him, ask him what he will do for it? For example, if someone wanted to build a large resort in an area where the town had a bike trail on its wish list, why not try to work a deal for public access through an agreed-upon area of the property in exchange for the grant of a CUP, or relaxation of some rule? Is this sort of thing done? What should be the limits on the city in asking what a developer can do to improve the public realm? As a bonus to gussying up the community, I would think it would make for a happier relationship between residents and developers (AND decision-makers). Anyone have any examples, or comments, or warnings?

  2. #2
    Cyburbian Michele Zone's avatar
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    I believe this is an example from "Heart and Mind of the Negotiator": some town got a large employer to fork over a "donation" in exchange for NOT annexing their property (on the city limits) and imposing taxes (which would have been more money).

    I think in some circles that might be viewed as very near "blackmail". Oh well.

  3. #3
    Cyburbian Cardinal's avatar
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    It is frequently done. In nearly all cases, though, there has be be a clear and proportionate relationship between the demands of the city and the impacts of the project.
    Anyone want to adopt a dog?

  4. #4
    Cyburbian ludes98's avatar
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    Quote Originally posted by Cardinal
    It is frequently done. In nearly all cases, though, there has be be a clear and proportionate relationship between the demands of the city and the impacts of the project.
    What he said. Big box don't need no freaking trails!

  5. #5
    Cyburbian
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    Quote Originally posted by ludes98
    What he said. Big box don't need no freaking trails!

    Hiking through the Wally World parking lot- now that sounds like good, healthy fun!


    from Cardinal:
    there has be be a clear and proportionate relationship between the demands of the city and the impacts of the project.
    I suppose so, and I can imagine this could be pretty difficult sometimes, darn it. How close a relationship? "Your project will remove visual access to beautiful scenic land, one of our best resources, so please let us at least have bicycle access through part of it?" Hard for me to imagine how to relate the impact to the the prize in this totally fictitious example or any of the others that come to my mind. I suppose, ideally, the rule to be relaxed would have a specific purpose which would be furthered somehow by the negotiated deal...

  6. #6

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    One way of looking at planning (by no means the only way) is as a vehicle for putting the wealth generated by development to work for the community. There are two levels to doing that.

    The first level is what you require in your local land use regulations. I am talking here about things that are above and beyond the installation of on-site facilities like roads and water mains, about what a developer contributes to facilities that do not directly serve the project. As Cardinal says there has to be a reasonably direct relationship between these "off-site exactions" and the impacts of the project. Impact fees provide one good way to get developers to contribute to specific projects, but they are not always workable. So your regulations may need to provide for a less cut-and-dry, more negotiated approach. You can also request land dedications for parks, schools, etc. in specific circumstances, or a fee paid in lieu of the dedication. All of these approaches must be rooted in a local capital improvements plan, with a lot of factual background.

    The second level is more artful. It involves negotiating things you can't require. One must be cautious, not just for legal reasons, but also because you don't want the public to perceive that a developer is buying her or his way to approval. The key is to know what you want, ask for it, and have a reasonable alternative if the answer is no.

  7. #7
    Cyburbian SGB's avatar
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    Quote Originally posted by ludes98
    What he said. Big box don't need no freaking trails!
    Yet, Big Box has benefitted from allowing snowmobile clubs to continue trails across its property. Really. The negotiations occurred between the developer and the snowmobile club entirely outside the local development permitting process.
    Last edited by SGB; 03 Aug 2004 at 8:43 AM.
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  8. #8
          Downtown's avatar
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    Quote Originally posted by maximov
    Some city governments seem to me bend over backwards to help developers realize their plans
    I think a lot of this depends upon how desperately the city government wants the said development, and how desperately the developer wants to be in said city.

  9. #9
    Cyburbian
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    The second level is more artful. It involves negotiating things you can't require. One must be cautious, not just for legal reasons, but also because you don't want the public to perceive that a developer is buying her or his way to approval. The key is to know what you want, ask for it, and have a reasonable alternative if the answer is no.
    Is it appropriate for a municipality to include a 'wish list' of things it ordinarily could not afford to acquire on its own in its comprehensive plan? If it did, naming pieces of land it would like to acquire or particular improvements it wanted made to certain streets, and the list was supported by the townspeople, could the decision-makers then weigh the benefit of, say, some snazzy new sidewalks against a semi-unrelated impact, such as increased traffic through a residential neighborhood (which could otherwise be cause for denial)? I guess what I'm hearing is that the answer is no.

    Yet, Big Box has benefitted from allowing snowmobile clubs to continue trails across its property. Really. The negotiations occurred between the developer and the snowmobile club entirely outside the local development permitting process.
    Amazing. So snowmobilers now park and go shopping along the route? Or the zoning administrator likes to ride? I think I might have missed the point; sorry, I'm kinda ignorant about these things.

    I think a lot of this depends upon how desperately the city government wants the said development, and how desperately the developer wants to be in said city.

    Yes, and I guess I'm thinking about situations where the impact of a proposal is large and the town would like to make it work, but the trade-off just doesn't feel even.


    Thanks, all.

  10. #10

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    First, a "wish list" should appear in your comprehensive plan or associated documetnts, like an open space or capital facilities plan. Ideally the wish list for the next few years would be relatively specific and presented in the form of a capital improvements plan that the local government actually intends to fund, but even if that level of specificity isn't possible, you should identify your needs.

    You can't require a developer to contribute toward those needs unless you can show a fairly direct relationship between the nature and extent of that contribution and the impacts of the project. But nothing prevents you from accepting voluntary contributions. You just have to watch the credibility of the process: it is not good if it looks like the developer is buying approval.

  11. #11
    Cyburbian SGB's avatar
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    Quote Originally posted by Lee Nellis
    First, a "wish list" should appear in your comprehensive plan or associated documetnts, like an open space or capital facilities plan. Ideally the wish list for the next few years would be relatively specific and presented in the form of a capital improvements plan that the local government actually intends to fund, but even if that level of specificity isn't possible, you should identify your needs.
    All excellent points. I would think that an adopted Adequate Public Facilities law would also be a useful addition to the negotiations tool kit.
    All these years the people said he’s actin’ like a kid.
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  12. #12
    Cyburbian Big Easy King's avatar
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    Quote Originally posted by maximov
    Some city governments seem to me bend over backwards to help developers realize their plans. I would think that if a town or city has its comprehensive plan in order and up to date and thus knows specifically what the people want for the future, that it is in a good position to negotiate with developers proposing large projects. Why shouldn't the town, in telling a developer what it can do for him, ask him what he will do for it? Anyone have any examples, or comments, or warnings?
    Ideally, a city or town would benefit if the negotiation process with developers occurs smoothly according to the comprehensive plan, but politics often rules with a heavier hand. It's unfortunate that sometimes the most effective development (development in conjunction with necessary and/or additional amenities) does not occur. In some, if not all, towns and cities, decision-makers are more compelled to allow certain developments with a lack of necessary amenities or without any such additives, in order to continue to attract developers in a stale economy despite the goals of a comprehensive plan. New Orleans is an example of where this type of negotiation and allowances occur quite often.
    A person who strives is one who thrives. It's GREAT to be THE KING!!!

  13. #13
    Cyburbian
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    This discussion is fascinating to me.

    But nothing prevents you from accepting voluntary contributions. You just have to watch the credibility of the process: it is not good if it looks like the developer is buying approval.
    So, the town should not consider a developer's generosity in its final decision?

    I think I'm beginning to get it. I just went looking for our capital improvements plan with no luck- not sure one exists- but I did find an Impact Fee Analysis which repeatedly states that by law the town can't charge a fee which would provide a higher level of service than they already have. I assume that the larger the population the lower the level of service per unit, and this is how improvements to parks and such are justified (?). If the impact fee can include a charge to a new homeowner across town for improvements to the park, then it seems the law recognizes an impact on the park from a single home. Wouldn't it follow that a large development impacts all systems that such fees can be charged for? So defending a connection between impact and a requested 'gift' shouldn't be too hard... I don't suppose impact fees are generally negotiable. Sorry, this is dumb, tell me to shut up and go to school. And, thanks again, all.
    Last edited by maximov; 06 Aug 2004 at 5:40 PM. Reason: this idiot pushed SUBMIT by mistake

  14. #14

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    Not dumb, just things everyone has learn.

    Impact fees are set in advance. They are not negotiable. They must, however, be set up to allow credits for contributions that a developer in a unique position can make. For example, if a developer happens to own a park site you want and is willing to donate it, that donation must be credited against the fees.

    How easy it is to demonstrate a connection between an improvement and a new development depends on many things. Geography plays an important role. If an improvement is on a road that residents of the development are unlikey to use on a daily basis, fees collected from that development can't be used. So larger communities have to map benefit areas, and the fees may vary from area to area. On the other hand, calculating an impact fee for a sewage treatment plant that serves the entire community is much simpler.

    If you want to see an impact fee system that works pretty well in southern UT, take a look at Grand County.

    Finally, a developer's generosity per se is NOT a factor in a decision. If you make a suggestion about how someone could help and they reject the decision, you must still approve their project if it complies with all of the rules. Its that simple. But if a developer intends to work in a community over a long period of time, they have an incentive to be cooperative/helpful. It is strictly about the power of persuasion. And it is better if the power of persuasion is exercised by someone who is not directly involved in the processing of applications. That is, the planning staff, planning commission, etc, should just do their job. The city manager or mayor should probably be the one saying, hey we could really use X.

  15. #15
    Cyburbian
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    Quote Originally posted by Lee Nellis

    Geography plays an important role. If an improvement is on a road that residents of the development are unlikey to use on a daily basis, fees collected from that development can't be used. So larger communities have to map benefit areas, and the fees may vary from area to area. .

    Aha! Some communities are bigger than 400 residents? Now I get it. Here, it is hard to imagine an impact, or an 'improvement', that would not affect every resident.

    If you make a suggestion about how someone could help and they reject the decision, you must still approve their project if it complies with all of the rules.
    Yes, I can see that. But what if it is a conditional use? {A recurring item in our zoning ordinance that makes me anxious even allows unlisted conditional uses, if the PC determines they are 'similar' to a permitted use and in harmony with surrounding area.) And what if this conditional use will have impacts which could be reason for refusal if they weren't outweighed by the suggested 'extras'?

    And it is better if the power of persuasion is exercised by someone who is not directly involved in the processing of applications. That is, the planning staff, planning commission, etc, should just do their job. The city manager or mayor should probably be the one saying, hey we could really use X.
    Aha again! Thanks, that helps a lot. And thanks for the Grand County reference, I'll find that.

  16. #16

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    Unlisted conditional uses are unlawful. Memory is even tugging at me to say there is a Utah case that says so.

    In a small place like yours, it is ok to use listed conditional uses extensively as a way of addressing the issues, so that per se is not a problem. It is subject to some abuse, however, unless there are very detailed standards for when, and when not, to approve a conditional use. If there are specific trade-offs you can identify, then they should be explicitly set up in your local regulations. A lot of small places that can't effectively use impact fees use negotiated exactions language, based on a case-by-case FORMAL evaluation. A small town that has had used that with some success in the past is Victor, Idaho. They have probably tinkered with their regs (it seems like the maximum time a good set of regulations can hold together in the small town West is no more than 5-6 years, then people get over the shock of having regulations and start attacking them with amendments that weaken them), but I would be a little surprised it they changed that, as it has gotten them some facilities they wanted. You could have the administrator send you a copy.

  17. #17
    Cyburbian
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    Unlisted conditional uses are unlawful. Memory is even tugging at me to say there is a Utah case that says so.
    This comment has set me off on a quest for cases- no luck yet, but I will find them.


    A lot of small places that can't effectively use impact fees use negotiated exactions language, based on a case-by-case FORMAL evaluation. A small town that has had used that with some success in the past is Victor, Idaho. ... You could have the administrator send you a copy.
    This sounds like it could give me direction; I will certainly contact their office.

    Very grateful, Lee!

  18. #18

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    I think the case I am thinking about comes out of Smithfield. That may help narrow your search a bit. The classic case is from NJ: I think it is something like Rockhill v Chesterfield.
    Last edited by Lee Nellis; 10 Aug 2004 at 5:13 PM. Reason: one more thought

  19. #19
    Cyburbian
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    Quote Originally posted by Lee Nellis
    I think the case I am thinking about comes out of Smithfield. That may help narrow your search a bit. The classic case is from NJ: I think it is something like Rockhill v Chesterfield.
    I must say, Lee, you are much superior to my favorite search engines -- from the Rockhill v. Chesterfield opinion: "Reserving the use of the whole of the municipal area for "normal agricultural" and residence uses, and then providing for all manner of "special uses...and "other similar facilities," placed according to local discretion without regard to districts, ruled by vague and illusive criteria, is indeed the antithesis [***17] of zoning. It makes for arbitrary and discriminatory interference with the basic right of private property, in no real sense concerned with the essential common welfare."

    I found a Smithfield, Rhode Island case that addresses zoning (SMITHFIELD CONCERNED CITIZENS FOR FAIR ZONING v. THE TOWN OF SMITHFIELD) which looks like it will be helpful when I have a chance to read it (whether or not it is the one you meant!).

  20. #20

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    My memory was talking about Smithfield, UT.

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