Tag Archive for: zoning

IOS Developments Drive Forward Despite Entitlement, Zoning Challenges

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With the trifecta of idling engines, diesel exhaust and the constant presence of 18-wheelers, industrial outdoor storage operators fight an uphill battle getting their projects approved by municipalities.

But rising demand — and the rising prices that come with it — has motivated developers to find ways forward despite community backlash.

Entitlement challenges, zoning difficulties and pushback from NIMBY-esque neighbors slow the production of IOS properties, causing developers to create strategies targeted at avoiding these pitfalls to get their deals done and meet a ballooning market need.

“The lack of available supply for truck terminals has historically been driven by local zoning ordinances,” said Cresa broker Eric Rose, who is based in Omaha, Nebraska. “Most communities aren’t friendly and won’t really add any more of these locations unless it’s via a case-by-case, special-use approval process, which is time-consuming and costly.”

As the continued growth of e-commerce and a renewed domestic manufacturing sector add pressure to expand trucking to handle increased logistics demand, some developers are striking out and figuring out how to add new capacity. With IOS vacancy rates slipping to 3% in 2022, according to Marcus & Millichap research, the need is clear. And with the high rents and sales prices being fetched by existing IOS properties, ground-up development can offer a significant payday, especially from interested institutional investors or truck carriers.

Earlier this month, Industrial Outdoor Ventures announced plans to turn the Twin Lakes Travel Park in Davie, Florida, 24 miles north of Miami, into a 38-acre industrial service facility. Situated south of Interstate 595, between State Road 7 and Florida’s Turnpike, the ground-up development will include two buildings totaling 227K SF and outdoor storage yards that can hold 280 truck trailers.

“This is another great opportunity for IOV to meet market demand by developing the type of modern facilities that today’s end users require and in a location that has a scarcity of land available for this type of asset,” Industrial Outdoor Ventures Senior Vice President of Development and Acquisitions Eric Johnson said in a statement.

Turnbridge Equities also just picked up a 3.6-acre site in Rancho Dominguez, California, near Los Angeles, in a $25.5M buy.

“The deal, another 2.49-acre pickup in the South Bay, aligns perfectly with our strategic vision of expanding our Industrial Outdoor Storage strategy in port-adjacent, infill and high barrier-to-entry markets,” a Turnbridge executive said in a statement.

In nearby Perris, California, Alterra IOS spent $8.5M on a 7-acre towing yard in early May, with plans to renovate it and reintroduce it as an IOS property with easy access to the busy Inland Empire.

Chicago-based Dayton Street Partners has been busy with redevelopments and plans to create new trucking facilities, one of just a handful of ground-up IOS developments taking place. The firm just finished a 95-acre terminal with 500K SF of industrial space at 5800 Mesa Road in Houston, which is being leased to the carrier Maersk.

The firm also has a 47-acre, 1,000-trailer terminal set to open in Baytown, Texas, near Houston and less than 20 miles from two Gulf ports, set to open in June. The terminal includes a 24-foot-tall, 1,382-foot-long building meant for unloading and reloading truck cargo. In addition, Dayton Street acquired two truck maintenance facilities in Atlanta with plans to renovate and reopen.

“The difficulties of finding appropriate space and building new facilities — often renovating existing industrial or vehicle-focused real estate, such as mobile home parks or underutilized warehouse sites with vacant buildings and minimal need for rehabilitation — means it often isn’t worth it to seek out real estate on the fringes of a market,” Dayton Street principal Howard Wedren said. “Financing has been rocky lately so it is difficult to get access to capital compared to those with longstanding client relationships.”

It is key to find locations near big travel hubs and ports, spots already in high demand for industrial developers seeking storage space.

“We don’t go to the outskirts,” Wedren said. “We’re very much into the high-barrier-to-entry sites. That’s our model, and we don’t deviate.”

High barriers are common for IOS projects. In Long Beach, California, the firm Cargomatic received city council approval for an IOS storage site last month near the busy Pacific port, just overcoming significant backlash by business groups and local leaders concerned about additional pollution from heavy trucks.

“There are no guarantees at the end of the day,” Cresa’s Rose said. “So do you go through a multiyear development process, not 100% certain that you’re going to get those rezoning and entitlements you need? Or do you just bite the bullet and buy the existing facility, and you can activate your service immediately upon opening the facility?”

In the case of Industrial Outdoor Ventures’ project in Davie, Director of Construction and Properties Rob Chase said the firm had good relationships with local leaders. It helped that the older travel park was showing signs of age and wear, and many in town were happy to replace the site with something newer.

Even with the support, it is a long process. Properly and fairly relocating existing residents is time-consuming, and even with the relatively simple construction requirements of these kinds of projects, it will still take 14 months of site work and construction once the site is cleared.

On the flip side, an empty site in Jurupa Valley, California, near the Inland Empire, that Industrial Outdoor Ventures acquired on the precipice of gaining approvals for construction in a portfolio purchase, now has to restart the entitlement process.

Chase said he sees the value of existing and new IOS facilities continuing to rise, spurring more developers to attempt more conversions, but he acknowledged that the process is often difficult.

“Having the right zoning is absolutely critical,” Chase said. “An entitlement process I describe as being long and drawn out is nothing in comparison to trying to change the zoning. That’s even more of a hill to climb. You could easily flip these properties, but pushing, sticking with it through to the finish line, is worth it.”

 

Source: Bisnow

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Live Local Act To Create Massive Development Opportunities In Florida, Law Firm Says

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The Live Local Act will significantly change how real estate is developed in Florida, Miami land use attorneys said at a recent webinar.

Held May 4, the webinar was hosted by Bilzin Sumberg partners Anthony De Yurre, Sara Barli Herald, and Carter McDowell. During the hour-long event, the attorneys urged developers to gather with their teams, consult with municipal planning staff, and take another look at their planned projects.

“This opens up a whole area of potential development that was not there before,” said Herald, who specializes in affordable housing and tax credits. “There are a lot of changes. This is probably the most significant land use change in decades.”

De Yurre, who specializes in zoning and complex land use, added “This is the Magna Carta.”

Also known as Senate Bill 102, the legislation was signed into law in late March, effective July 1. Among other things, the bill grants developers the ability to build the maximum amount of units a local jurisdiction allows – and at the maximum allowed height within a mile of a project’s site – on almost any property zoned commercial, industrial, or mixed-use. And that developer can obtain those rights without a public hearing.

The catch is that 40% of those units must be reserved for households earning up to 120% of a county’s area medium income (AMI) for the next 30 years. (A developer can seek the same rights with just 10% of the units reserved for affordable housing, but that will require approval from the jurisdiction’s elected body.)

In addition, SB 102 does not destroy other zoning rights reserved by states such as setbacks and parking requirements. However, the law states that cities and counties must consider reducing parking requirements for affordable projects built within a half-mile of a transit stop.

Besides zoning variances, the code grants developers property tax breaks if they constructed or substantially rehabbed a building in the past five years in which at least 71 units are affordable housing. If those units are reserved for people who earn between 80% to 120% AMI, the landowner is entitled to a tax reduction of 75% for those apartments. If the units are for households earning below 80%, a landlord can secure a 100% reduction on a property tax bill. The catch is rents must conform to HUD rent income restrictions or 90% of an area’s market rate, which ever is less, for the next three years.

 

Source: SFBJ

Revised Plans For Delray Industrial Project Adjacent To Dakota Homes Don’t Appease Residents

The county zoning commission unanimously approved revised plans for an industrial-commercial project that will abut the Dakota Homes development west of Delray Beach despite strong opposition from area residents who fear the project will decimate their property values and destroy their quality of life.

Resident after resident told the zoning board they never would have bought in the 387-unit GL Homes development, currently under construction, had they known that the land adjacent to them was zoned industrial. Some of the homeowners paid as much as $600,000 for their homes.

“We knew something was going to be built there but not an industrial park,” said Monica Belisle, whose home on Salty Bay Drive is about 250 feet from the project.

At issue is whether West Delray Collision can move its operations across the street to a 10-acre site on the south side of Atlantic Avenue about .2 miles east of State Road 7. The 164,000-square foot project also calls for a 35-foot tall self-storage facility, a car wash, two warehouse buildings and a tire repair facility.

The Board of County Commissioners will decide the fate of the project Thursday, Aug. 22.

The Zoning Commission forced West Delray Collision to revise its plans so that its operations were farther away from Dakota Homes after residents pleaded for help at a July meeting. The revisions include:

  • Increasing the setback from 100 feet to 170 feet.
  • Increasing the buffer to 50 feet.
  • Reducing the size of the self-storage facility by 12,000 square feet.
  • Adding a second canopy of trees.
  • Building a 50-foot wall on the east side of the property next to Our Lady Queen of Peace Church.
  • Moving the dumpster from West Delray Collision farther away from Dakota.

But the concessions did nothing to appease the residents.

 “It’s like dying by cyanide or electrocution,” he said. “We feel like we are being bulldozed,” said Boca Raton cardiologist Steven Pollack, who like Belisle also lives on Salty Bay Drive:

Pollack and others claim traffic congestion is a nightmare on Atlantic Avenue, which is only one lane in each direction. The state has plans to widen the heavily traveled highway but that project is not expected to start until sometime in 2022 and may take two or more years to complete.

It is a big mistake to put more traffic on Atlantic Avenue before it is widened, he said, noting that people may not get to nearby hospitals in time for treatment because of the traffic congestion.

“Moving the auto repair operation 70 feet away won’t make a difference,” said Matthew Belisle.

He was concerned with the 7 a.m. to 7 p.m. operations Monday to Saturday as well as noise issues.

“This is fundamentally unfair,” Belisle said. “It will financially ruin us.”

But Greg DiMaria, the owner of West Delray Collision, said he is trying to be as neighborly as he can be. As for noise, he said all of the auto-body repair work will be done inside a concrete building.

The vacant land, which is in the Ag Reserve, had been zoned agricultural-residential but in 2017, at around the time GL began selling homes at Dakota, the county approved a zoning change to light industrial.

Donald Bryan said his family has owned the land for more than 50 years. He said future land use maps have designated the parcel as industrial ever since 1980.

“This property has right to be developed based on property rights,” Bryan said. “What is fair is fair.”

The opposition to the project is intense. Zoning staff received 66 comments in opposition; only 1 comment in support. Petitions with more than 515 signatures opposing the project were presented to the zoning board from parishioners at the nearby church and an on-line petition from 231 Dakota Homes’ residents.

Four Seasons HOA President Art Goldzweig testified against the project in July. He told The Post on that he was disappointed with the zoning commissioners. He said he can’t understand how the board could ignore the outcry of the residents and the parishioners of Our Lady Queen of Peace.

“This is shameful behavior,” Goldzweig said. “They should all resign.”

He was also disappointed with Alliance of Delray Residential Associations for supporting the project as long the concessions were made. This is not a project that the association should be supporting, he noted.

 

Source: Palm Beach Post