Building & Construction

After the construction of your commercial building, make sure that the entire site has been properly cleaned. Many left over products such as construction dust, and prolonged smells of paint or furnishing can temporarily limit the amount of money your investment was projected to haul in. Besides poor construction cleanup effecting the site and the developers pocket, it could possibly affect the land soil. Contamination that leaks into the ground can become a future problem for the developer. The practical effect is that these products whether harmful or not can possibly lead to molds, sickness, and possibly even nuisance. Another problem can happen down the road when the developer might opt to sale his development. If problems are found by a potential buyer, it could halt or end the negotiation. So, make sure to have engaged in due diligence throughout the site's developments. That due diligence includes recognizing and exploring location problems, building flaws, and bad techniques. This can possibly involve lots of outside work, however knowing a little about a lot is helpful in any aspect of business.

Professionals

There are many professionals and contractors needed for development of a parcel of land. To successfully build any site whether commercial, residential, or any other classification, it is best to explore all options and choices. With the economy still in limbo, some investors especially the less experienced ones might opt to save a few dollars by contracting or hiring the cheapest available company. Better yet, some may even elect o hire friends. Now, there is nothing wrong with these instances, but more often than not these agreements do not work.

Always remember "you get what you pay for." Don't skip the important steps and the important aspects of hiring the right contractor or professional. Trying to maximize profits in the building stage will definitely have an affect on the investors judgment. A few extra thousands or millions are worth the gamble during and after construction. However, a poor building or a cracked foundation is not worth the few dollars you might save.

Due Diligence and Commercial Real Estate Purchases

Commercial real estate purchases often involve a greater investment than private real estate purchases; therefore, a buyer needs to ensure that she has gathered as much information about the property as possible. Buyers must perform due diligence to eliminate any surprises after the transaction.

Buyers must perform due diligence in two areas: the land itself and the structures on the land. Regarding the land, the buyer must be aware of any past land use, any zoning regulations attached to the land, and any easements or encroachments on the land (just to name a few). Regarding the structures, the buyer must inquire into the applicable building codes, perform inspections, look for structural problems, and determine if there are any environmental issues such as asbestos or lead.

As Prof Emerson says, "there is no bad business deal insurance." Buyers must perform due diligence to prevent headaches and financial disaster after the purchase.

LOI

Letter of Intent (LOI) is a preliminary agreement between negotiating parties. After the preliminary agreement, the parties hope to enter into a concrete contract in the near future. These are non- binding documents or are they? Of course, some of the general information listed on the document includes: prices, down payments, confidentiality agreements, and financing.

When drafting any legal document, accuracy is pivotal, especially in the law of property and land planning. One legal concept that can possibly make a Letter of Intent relevant and possibly controlling is the parol evidence rule. This rule makes any other prior agreements or documents irrelevant when the parties sign a final embodiment of there agreement. So, if two negotiating parties move forward in there transactions and the LOI is the only written document available, the LOI will likely be given great weight by the court. It will be given weight b/c there are no other final documents to show otherwise. These are rare instances, but accuracy and due diligence will negate this occurrence. No seller or buyer wants to be held to unfavorable terms in a LOI, except when they are receiving the windfall.

Environmental Issues/USTs

We have been researching the AL Code and the ADEM administrative code for information about underground storage tanks (USTs). For the environmental issues presentation, we were asked to include the Sinclair's restaurant property immediately east of the "Semester Parcel", across Boultier, on the north side of Fairview Ave.

We found out that this property was at one time a gas station, and that the petroleum UST underneath it was never removed. Big problem. On top of that, the strict ADEM requirements for monitoring, mediating, and/or removing such a UST were all instituted (1976) after the filling station converted into an art shop. Thus, the Sinclair's site was "grandfathered in." This hoists us up onto the horns of a dilemma; should we recommend that our client ignore the presence of the UST because the relevant state law does not apply and risk future liability because of leakage into an aquifer or the water table? Or should we recommend that our client expend enormous sums of capital up front to have the UST removed, only to later discover that he/she need not have bothered? Isn't playing with other people's money fun?

National Environmental Policy Act (NEPA)

We recently visited Riverwalk stadium and talked with one of the city planners resonsible for the development. We learned that government developers have additional regulations that they must follow, one of those being the National Environmental Policy Act (NEPA).

NEPA requires federal agencies to complete an environmental impact assessment (EIS) for every major action that significantly affects the environment. If a state or local government uses federal funding for a development then they too are responsible for completing an EIS. NEPA ensures that the government considers all of the environmental impacts.

The Riverwalk development faced several environmental issues. This site has been involved in numerous types of industrial activities for over a hundred years. The land has been exposed to coal oil by-products, newspaper wastes, and railroad pollution.

NEPA was not a roadblock for the Riverwalk development because the city was redeveloping a brownfield. Environmental regulators encourage development that converts environmentally troubled areas into useful spaces.

Environmental Issues

Our continuing redevelopment of the Old Cloverdale "Semester Parcel" presented preliminary issues regarding site development. With any land development project whether local or state, the EPA has the discretion to exert its influence and power. The EPA is not a overbearing entity of the federal government. Instead, it works with local and state governments, who exercise due diligence, to settle and eliminate environmental problems.
There are several federal acts to be mindful of when developing such as: Clean Air, Clean Water, and Solid Waste Disposal. Certain Projects require one to obtain a National Pollutant Discharge Elimination System permit before starting a project. After receiving this permit, the developer must then submit a sediment and erosion control plan, which is basically a best management practice obligation. Within the confines of Alabama, one must obey the guidelines of ADEM(Alabama Dept. Environmental Management). On the local level, the developer must also command his attention to the historic commission. The legitimate concerns that can resurface as a result of poor redevelopment can lead to future problems, which lead to bigger bills. Knowing the local, state, and federal acts regarding the environment can lead to a successful site process.

CBA'S

What effect would a Community Bargaining Agreement have between a historic community and a land planning developer? The answer is.... probably no effect at all. A CBA specifies the public benefit and amenities that a particular developer will provide to the impacted community in exchange for the community's support. These agreements are tailored to benefit both sides. However, some issues can arise. 1. Who will have standing to challenge and enforce the CBA's terms? 2. Are the terms enforceable? 3. Do such agreements lack consideration?

One successful CBA comes to mind when questions are raised regarding there efficiency. The Stapes Center in Los Angeles had a very successful agreement which has yet to produce any conflicts. Even though there are wide disparities between L.A. and say a city like Montgomery, Alabama, a CBA could possibly have a positive impact on your development. Overall, CBA's should be judged on a case by case basis, but I think the public good outweighs the harm.