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May 28, 2012
From the Ground Up

An open attitude between developers and municipal officials generally leads to satisfactory results

"They are impossible to deal with." It has been said about every town and city hall in Maine. Yet, commercial real estate projects and economic development continues to advance throughout our great state. So what gives? Are all state and municipal officials the "bad guys" and simply in the business of layering on red-tape? Or are property owners and developers overly sensitive and impatient? Surely neither is universally true. But one thing is certain: Understanding how to work with government officials and within regulatory policy is paramount to any successful real estate transaction or transition.

Every municipality has some form of checks and balances over the land upon which we live, work and play every day. These rules are typically spelled out in a formal document called zoning ordinances. Within these pages, land-development regulations, as well as permissible industries and uses, are defined and outlined. Of course, depending on the size of the municipality, these ordinances can become extremely thick and complicated. However, whether you're in Portland (pop. 66,194) or in New Portland (pop. 764), there are tools and resources to help you simplify and understand the policies regarding your real estate holdings. Oftentimes, you simply need to ask.

It's been my experience that communication, or rather lack thereof, with government officials is where problems can arise. With that in mind, I recently corresponded with Nathan Poore, the city manager in Falmouth, about a client of mine who was interested in purchasing a commercial property in his city. My client had concerns that Falmouth had a reputation, fair or unfair, of being "difficult to work with." Within 30 minutes of my conversation with Nathan, I received a detailed email from him explaining the roles of certain town officials as well as some interesting economic incentives in place for prospective new commercial businesses. Nathan wanted my client to understand all the resources available in order to make the transition to Falmouth as seamless and fruitful as possible. This type of progressive interaction proves to me that Falmouth, and most municipalities, are open for business if the lines of communication are reciprocal and established at the onset of interest.

I had another recent positive experience in Saco. I represent the owner of a commercial food processing plant in the Saco Industrial Park. This property has a particular infrastructure that makes it specialized and in demand. It also, however, requires a lot of regulation. So when we were approached by a new business that would be doing heavy processing and distribution, we immediately decided a sit-down with town officials would be in order to avoid any problems down the road. We met with Saco Code Enforcement Officer Richard Lambert and economic developer Peter Morelli. There were a number of potential issues, but together, we developed a plan to get this prospect into my client's building. The music to this broker's ears was a line from Lambert who said at the end of the meeting, "Let's work as a team to bring this business to Saco." These town officials were genuinely welcoming of this company because we were proactively finding out what needed to be done within the codes and zoning ordinances. It was not an "us vs. them" mentality; rather, we were a team.

Of course, it's not always as simple as setting up preliminary meetings to discuss new business or development. And it's certainly not always as cordial as my previous examples. Zoning and code enforcement is designed to be black and white. But as industry evolves and the world around us changes, there has to be an avenue for adaptation. This is when zoning appeals and contract zoning can come into play. Many towns and cities have a zoning board of appeals, typically comprised of elected local residents and area professionals. This group can settle disputes with town code enforcement and also allow conditional uses typically defined within the zoning documents. Any decisions, however, are solely driven by their interpretation of existing code law.

A contract zone, on the other hand, enables an impermissible use to locate on a particular parcel of land. The contract zone only applies to that lot and is not a zoning change, per se. Typically, a property owner or developer will agree to certain limitations or restrictions in exchange for the more favorable zoning. In other words, municipalities that agree to a contract zone will have a very good understanding of what will be, and can ever be, built on the parcel. The Walmart and Lowe's development on Route 109 in Sanford is a recent example of a successful contract zone. That area was primarily zoned Industrial Business but Sanford allowed the retail use on the parcel in order for the development to move forward.

Proactively engaging your municipal officials is the most effective way toward successful real estate transition or development. Any time people's livelihoods and investments are at stake, the process can get emotional and sometimes frustrating. But working with officials as a resource should lead to satisfactory results.

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