It’s a deal-killer. Even if it's the perfect location. You can prove the market demands more self-storage, present pretty pictures, line up your funding, design the next award-winning site, and have the perfect business plan. But if you don’t have the proper zoning, your perfect deal is dead.
Finding good locations for self-storage is not that hard. Any rookie or would-be developer can almost intuitively walk into any market and identify the best location for a new storage business. It doesn’t require years of experience in real estate to understand the basic characteristics of a quality site.
But it isn’t just the price of that prime lot that may challenge the self-storage developer. Our target isn’t just the quality location at the right price. We need the proper zoning or entitlements to build our desired use, or the best deal might never see the first tenant.
Sometimes, navigation of the zoning bureaucracy is necessary, even when self-storage is an allowed use. Older self-storage properties with rickety, rusty gates, fences and doors; poor managers; ugly curb appeal; and complacent owners have moved some zoning authorities to force self-storage businesses to conform with substantial restrictions, even where the use is allowed “by right.”
When a developer calls me with a zoning issue, I’ll admit, I cringe a little. During my self-storage career, I’ve seen "perfect" deals that never work out. I’ve seen developers take all the correct steps to rezone a property and have wonderful success. Conversely, I’ve worked with developers who’ve spent tens of thousands of dollars on a rezoning application—for terrific projects—to ultimately realize failure.
Attacking a rezoning application is never simple. But if you’re considering a rezoning for self-storage, here are a few tips that might streamline your process.
Rezoning Guideline 1: Be a Pro
Throughout the course of launching any new business, the best strategy you can take is to be professional. In the case of applying for a rezoning, it’s likely you’ll be piecing together a tremendous amount of information, and navigating particular channels that may be unfamiliar. Developing a sound strategy and reasonable timeline for presenting a rezoning application is crucial to success. You should plan your rezoning activities just like you would any other piece of the deal-making process—acquisition, design, funding, construction—with contingencies.
A rezoning undertaking can be very risky. It can also be very expensive and ultimately fail. The reward of success might be substantial if the rezoning climate creates a barrier to entry. Or your rezoning case might set the standard for future cases, opening up opportunities for other developers. Identify and plan to mitigate the risks! Writing purchase contracts contingent upon rezoning can be a reasonable strategy to ensure you don’t live with a deal that won’t work.
When facing a zoning challenge, one of your first steps is to understand the rezoning process. A necessary rezoning that suits the overall comprehensive plan of your community could be an easy administrative process that requires a simple application and a couple of hearings. More complex cases, however, may be layered with public hearings, expensive submittals and never-ending bureaucracy.
Gather knowledge from the beginning. Visit your local planning office and understand the entire process. Read and understand the zoning you’re trying to change, and the zoning you’re requesting. Review the local community plans and comprehensive future plans. Research recent rezoning requests and applications that were approved and denied. Understand the process!
Make solid submittals. Being professional throughout the process requires you provide all the necessary data, then maybe some additional supporting documents. Feasibility studies, traffic-impact studies, artistic renderings, preliminary site plans, stormwater-detention plans, landscaping and green-space plans, pictures of similar projects, examples of similar rezonings, and all required documentation should be prepared and packaged professionally to ensure your application is easily understood. Anticipate the questions and prepare the best answers.
Rezoning Guideline 2: Gather Support
For a rezoning case that’s not administrative, you need all the support you can gather, on the front side of your application. Before meeting with persons of influence about your project, develop your concepts to the point where they can be easily understood. This includes renderings and conceptual site plans. Sometimes a rezoning can be more easily changed by the existing owner of a property than by a new owner. Consider this part of your acquisition strategy.