Industrial Non-Conforming Impacts

[djmadnan]

Heya All,
I was wondering if anyone could post a list of potential impacts to light industrial businesses who might be forced into a legal non-conforming use by a zoning overhaul.

I am looking to anticipate the potential issues in a comp plan I am drafting.

Does anyone know anything about the impact on capital financing and valuation? The existing ordinance allows expansion of up to 25% in area if you are a non-conforming use.

Thanks!
Judd (aka djmadnan)

 

[Cardinal]

Expansion is the first issue that comes to mind. Many businesses would like to expand by more than 25%. As a rule of thumb, most economic developers I know will tell a business to plan its initial facility to at least double in size. Financing an expansion could be a little trickier if the property was not zoned for the use. Some state and federal programs may require the proper zoning for consideration.

The second issue I would consider is a change of use. Will the zoning permit changing from assembly to distribution, or the addition of new manufacturing cells or accessories (such as paint rooms or storage silos)? If the business moves, will you allow a new industrial use on the site? If not, you may have greatly devalued the property, which could make it difficult to sell.

Changing the zoning of a property to a less-intensive use is not easy. I have been involved in only a few such attempts, where we either purchased the property and owned it when changing the zoning, or I could demonstrate a market for an alternative use where the owner could make money.