A good real estate development starts with the right architect. An architect is concerned not only with the concept but also the planning as well as designing of a building or any real estate development. A degree in architecture equips one with the knowledge of the building and operational codes that are to be adhered for every architectural design.

An architect is trained such that he/she transforms a user’s needs and demands into design and eventually into physical form. This implies that he/she should have complete training that will aid in the building of safe and healthy construction for people and the communities. Architects have to obtain licenses to practice architecture as their building designs and planning decisions play a vital role in the safety and security of the public.

Architects specialize in different fields among architecture i.e., land, land development, buildings, office parks, residential, landscape and the like. This specialization is a result of the increasingly fragmented, demanding and concentrated world. Thus, it is difficult for a single architect to be aware of the know-how of each of these fields and to accommodate the distinct demands of different clients.

An architect plays a very significant role in a project from its conception to its construction. The final physical form of a building or any real estate development is designed by an architect who obviously considers the desires and needs of the client. As such, it is important to choose an architect who is well qualified as well as experienced in the specialized field of your choice. An architect who has been in business for at least 5-10 years must have developed a strong foundation of relevant concepts. He/she must possess the skills, knowledge and experience needed for a decent and fascinating project. This indicates that it is essential to review an architect’s qualifications prior to selection; his/her degree, experience and license – all should be checked before one hands over the project. An important point to note is that he/she should be experienced for five plus years in the particular field of the development project and not just as a general architect.

Having said the significance of educational qualifications, it is time to review an architect’s affiliations and accreditations. An achieved architect should also be affiliated with a reliable institution, for instance, the American Institute of Architects (AIA), Royal Architectural Institute of Canada, Royal Institute of British Architects and the like. Affiliation with such institutes demonstrates an architect’s credibility and popularity in the industry. An architect who is affiliated and accredited by similar professional architectural organizations has certainly passed their comprehensive requirements. This is a strong recognition and a proof of their achievement. However, mere affiliation is not the only consideration before choosing an architect. Other relevant factors and elements should also be considered so that the ultimate decision is made bearing all concerns in mind.

Geographical area of specialty is also an important element. Some architects are specialized and well-aware of certain area(s), and as such their scope is quite limited to those areas. Although he/she may excel in architecture and the particular area(s), this does not ensure that he/she will be able to deliver equivalent results in the area of the project’s requirement. Thus, this aspect should also be kept in mind.

Certain other conditions are also relevant as they ascertain whether a project will be successful and simultaneously whether the relationship between the client and the architect is sound and pleasant. A good architect should possess good communication skills and should be responsive of the client’s questions and/or queries. This is a very important factor, which ensures the completion of the project on time and on good terms. For your relationship with the architect to be successful, the architect you ultimately select should, by all means, follow up on calls and emails and should keep his/her word on different aspects related to the project.

An architect’s connections are a reflection of his/her success and achievement as well as political and negotiation skills. One who is well connected and has contacts like city planners and those in political processes is most certainly preferred as opposed to his/her counterparts with relatively few connections and contacts. Yet another factor is an architect’s membership of local clubs as the Kiwanis, Toastmasters, Knights of Columbus, Rotary etc. An associated member is most certainly a better candidate.

Each one of the above mentioned factors are important considerations for an investor or a customer prior to choosing a suitable architect. At first, it might seem difficult to find architects with all qualifications but there are ways. You can talk to developers, other popular architects, city planning and building departments, local economic developments, chambers of commerce etc and ask for references. Similar references cal also be obtained from experienced customers, sellers and buyers. The advent and popularity of the Internet has opened previously unknown avenues for obtaining information. The Internet can be a source of information, details and contact about reputable, qualified and experienced architects. The websites of architectural professional organizations may also list prominent architects in different regions.

A good architect is the key to any real estate development. Once a solid relationship and understanding has been established with the right architects(s), the entire process of idea generation, conceptualization through to final construction becomes simpler and satisfying. A good architect is aware of all reasonable specifications and is filled with ideas that form successful real estate development strategies. Thus, it is absolutely imperative to choose the right architect – one who is aware, experienced and reputable.

The exciting thing about property development is that any one with reasonable financial backing can get into it. In this article we shall discuss the attractions of property development.

One of the principle reasons behind the growing popularity of property development is the anticipated return on investment. Unlike the stock market which is unpredictable and therefore somewhat scary, property prices in the UK have risen steadily since 1945, not withstanding a few cyclical downturns.

Therefore many people rightly believe that so long as you buy carefully, conduct thorough research, renovate in the interests of your target market and budget carefully; there is a lot of money to be made in property development.

As a result the way that property developers are perceived has changed over the years. Property development is no longer the preserve of ruthless big business but is open to anyone who can afford to pay a mortgage and building costs. As such, more and more people are quitting their day jobs to become property investors, lured by the attraction of quick and sizable profit.

As well as offering large profits, property development also provides a creative way to make money for those who want a career change. Unlike most office jobs, if you are a property developer you do not have to sit at your desk all day- quite the reverse in fact. Property developers spend most of their working day on site supervising their projects or out in the field talking to estate agents and local planning authorities.

Furthermore, as there are no specific training or qualifications required, property development really is a democracy of ability. Anyone who has an aptitude for it can be a property developer, regardless of their professional or education background.

The other reason why barriers to entry are so low is that you do not need overheads to be a property developer since most of the work is carried out on site. This means that all the necessary investment goes on purchasing and renovating the property and turning it around for a profitable sale.

I have been wrestling with the emerging field of sustainable entrepreneurship, which has its roots in the concept of sustainable development that grew out of the conservation and environmental movement of the 1970’s, so I undertook a short analysis to try to understand the concept further. A Google Search of sustainable development yields 30,600,000 web sites, references and/or citations posted on the internet suggesting significant interest in all aspects of what constitutes ‘sustainable’. The Merriam-Webster on-line dictionary defines ‘sustainable’ as “…relating to, or being a method of harvesting or using a resource so that the resource is not depleted or permanently damaged; … or relating to a lifestyle involving the use of sustainable methods…” The key phrase is ‘not depleted’ which I have indicated in bold type. This was and continues to be the essence of sustainability which has produced a plethora of social economic movements, none as more popular as sustainable development. Wikipedia [I’m not a fan of this web site, however it does serve a purpose in providing quick accounting of a subject] explains that sustainable development ties together concern for the carrying capacity of natural systems; that is the load capability of nature to support all life, i.e., natural capital, and human challenges of economic growth.

Dating from the 1970’s when the concept emerged in reference to establishing limits on developed growth, the term “sustainability” was and is used to blend ecology and economic growth, with terms such as ‘limits to growth’ and ‘steady state economy’ contributing to the environmental movement that caused wholesale changes in building and zoning codes across the nation relating to economic development, particularly land development. The idea that we have unlimited resources to be developed was challenged by the newer idea of limited resources that must be wisely developed in concert with nature has resulted in competing forces which have shaped our economic development over the last forty years. Practitioners of sustainable development consider it to have three elements: environmental sustainability, economic sustainability and sociopolitical sustainability. Special interests groups on both sides of the spectrum have laid claim to this concept to perpetuate their own agendas. However, a common sense approach, in my mind, has always been the preferred, particularly when we almost unanimously agree in today’s world that there is a natural limit to resources which must be recognized. With that said, I firmly believe that the free market has and will continue to be the best place in which to allow the blend of economic development with sustainable development to occur.

An example of how the free market is used to accomplish sustainability is the work pioneered by the Santa Fe Institute’s Dr. Brian Arthur who applied natural principles of biology to the study of economics, in particular economic growth; which has become known as ‘The Santa Fe Approach’. Arthur was very interested in explaining how economic markets work, how business forms, in terms the natural world, and how the human organization, in order to grow, must adapt and assimilate to its environment, constantly adjusting to changes. The ‘The Santa Fe Approach’ was a leading concept that helped to pave the way for a new field in economics called ‘ecological economics’. The concept of sustainable development has been furthered enriched by the new field of ecological economics popularized by Dr. Robert Costanza who founded the International Society for Ecological Economics (ISEE) and carried out much of the founding research at the University of Maryland.

The objective of ecological economics is to ground economic thinking and practice in physical reality, especially in the laws of thermodynamics and biological systems. It accepts as a goal the improvement of human wellbeing through economic development, and seeks to ensure achievement of this through planning for the sustainable development of ecosystems and societies. Ecological economics distinguishes itself from neoclassical economics primarily by the assertion that economics is a subfield of ecology, in that ecology deals with the energy and matter transactions of life and the Earth, and the human economy is by definition contained within this system. This system is defined as natural capital, which consists of all non-renewable resources such as oil, coal, gas, and minerals, and renewable resources such as ecosystems that comprise the planet, in both quantitative and qualitative terms. It involves such terms as ‘carrying capacity’ which refers to the ability of nature to support human activities, and goes to the center of what sustainable development is, and from which emerged sustainable entrepreneurship.

A recent white paper entitled “Sustainable Entrepreneurship in SMEs. Theory and Practice” by Evy Crals and Lode Vereeck, defined sustainable development as the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce, their families, local communities, the society and the world at large as well as future generations. From sustainable development, according to this white paper, came sustainable entrepreneurship defined as the continuing commitment by businesses to behave ethically and contribute to economic development while improving the quality of life of the workforce, their families, the local and global community as well as future generations. All right then; sustainable entrepreneurship can be considering a more holistic approach to undertaking a business venture. But how does this relate to the true essence of entrepreneurship?

The Merriam Webster Dictionary defines an entrepreneur as one who organizes, manages and assumes the risk of a business or enterprise. Often we use business and enterprise interchangeable to refer to the same thing. The word ‘entrepreneur’ comes from the French word ‘entreprendre’, which means “to undertake”. In a business context it means to undertake a business venture. Entrepreneurship and small business are typically used synonymously, interchangeably and presented as one in the same. Actually, entrepreneurship differs from small business in four critical ways: amount of wealth creation, speed of wealth accumulation, risk and innovation. [Reference: See the Green$: Achieving Your Entrepreneurial Dream, LOGOS Press, January 2011.]

In the case of acceptable definitions of sustainable entrepreneurship, where reference is made to the common good, I would like to clarify that sustainable entrepreneurship cannot and should not be about establishing some kind of social common good, as in a communal framework associated with planned economies such as the former Soviet Union, East Germany, Cuba, Venezuela and Socialists African counties. It is an oxymoron to do so. In contrast, the common good in a free market context, is about job creation which produces disposal income which begets increased demand for goods and services. This then is accompanied by a multiplier effect that allows a dollar to flow through the economy something like 2 times or more, which further begets additional demand for goods and services, which further increases disposal income, resulting in increased corporate revenue for re-investment, capital accumulation, and business growth. This compound economic activity produces increased state and federal corporate and personal income tax revenue, which allows for infrastructure investment in public works such as roads, bridges, railways, dams, and national lands like parks, wetlands, mountain ranges, and the like.

Rather, in my view, sustainable entrepreneurship is the process of sustaining a level of entrepreneurial development as to create a paradigm shift in economic activity such that national GDP, job growth, capital investment, technology advancement, and quality of life is unmatched, unsurpassed and unequalled. I realize this seems a bit altruistic and sounds like I am talking about Utopia. But I am not. We can and should strive through local, state and national efforts to seek to establish an economic mentality that is strategically focused on entrepreneurship and authentic organic economic growth at the community level across America. We can and should incorporate the concept of sustainability into the free market consciousness and allow the consummate entrepreneur, who seeks wealth creation within a tremendous risk-reward environment, through sustained invention and innovation, to achieve success. We can least forget that it was, has and will be entrepreneurial development that made our country great. We need so more of that now.

When you are an investor, there are tons of different types of land you can invest in. You might find that investing in vacant land is a great way for you to make money. So let’s clear up any confusion that you might have and talk about how you can make a purchase.

First of all, let’s define vacant land. It’s land without much improvement. Property that has been improved with a major structure (like a house) is not considered vacant. Also, land that is totally undeveloped is considered raw land, not vacant. Vacant land might be slightly developed with fences or sheds.

So, how can you find it? You might want to think about finding a good real estate agent that knows the area you plan to invest in. They can often listen to what you plan to do with the land and make some great suggestions as far as what you should purchase. You may want to consider seeking out an agent with experience in raw land, since vacant land is a lot like raw land and many everyday agents may not be experienced with it. Perhaps you should speak with local farmers about who you should hire as your agent. They might have some experience investing in undeveloped land since they work with acreages to plant their crops and run their farms.

When you go to the bank to acquire a loan for your land, expect a little bit more of a tough road than normal. When you invest, your lending institution will most likely have a harder time accepting undeveloped land as collateral. You should speak with your agent about this problem; don’t worry as it’s pretty common.

Investing in vacant land can lead you in a hundred different profitable directions. Once you acquire the loan and then the land, there are so many things that you can do with it. Just make sure that you are getting advice from the right people.

Commercial property development is the “in thing” now. The rewarding return on investment has made this business a highly popular one; while investing in the residential real estate market has become passé.

Now what makes it so lucrative? As stated earlier, one of its major attractions is a more secure return on investment especially vis-a-vis the unpredictable stock market. Since 1945 the real estate market in the US has seen only a few recessions, and has mostly shown a steady growth.

What makes commercial property development even more exciting, is that anyone with reasonable financial resources can work at it with few risks involved. Not only does it ensure good profits, it can make a money-spinning career for those who have the knack for it. And that is without any prior training, qualifications or business background.

However, investing in the commercial real estate market is a different ball game altogether than the residential market. You first need to know about the mortgage basics. Commercial real estate creditors’ area of focus is the property itself, its condition and it’s earning capacity. They are generally not too concerned about the individual or company that is buying or refinancing the commercial property. Though credit scores do matter, they are not as important as in residential property deals.

Also, you must get hold of a good commercial mortgage broker, one who will get you in touch with lenders with a variety of credit schemes. After you get such a broker, you can either seek the help of a commercial real estate agent to find a suitable property for investment, or do it yourself. If you are a first timer it is better to seek the help of a licensed real estate agent and licensed broker as well.

But if you do it yourself – do it well with proper research, renovation plans for the property and sound capital backup. Also, know about the market or economic cycles, while you deal with development property. Those who propagate the market cycle concept insist that one should buy development property in market recession time, and sell when the cycle is in growth. However, there are many who cite various pros and cons of this theory.

Moreover, most veteran property developers invest in property irrespective of the cycle. There is no steady pattern in macro-economic cycles that can be predicted with great accuracy. It is not always possible to have cash at hand when the cycle is at its peak. There are many layers to the property market. Which in turn, has many sub-markets. These market layers also have different cycle patterns at different times which cannot be generalised at a given time, and hence is a very complex equation. Commercial property development is also related to supply and demand.

When there is more need for housing, property will have to be developed irrespective of the cycle.

As a rule, a regular property developer depends on a financial viability assessment and ‘due diligence’ analysis of a development plan. If these indicate sufficient profits vis-à-vis the risks involved it is considered a viable project. This is the general rule, though the macro-economic factor is often also taken into account in such analysis via such factors as the effect of interest rates and inflation on a particular development project.

All in all, the process is complex and is to be implemented with a great deal of care and caution. But once you get a hang of it, nothing could be more money making than commercial property development.

There is a right way and a wrong way to purchase “control” land before you actually exchange the funds. This is crucial, critical to your developments success! You need to have this information to use in your feasibility study to determine the viability of the project. Once you have ‘control’ of the land, (which we will show you how to do with no risk of losing money or no money down) you need to be able to determine what you can build on this land which is determined by the appropriate governmental bodies in your area. You would already have a very good idea of this by following my guidelines for doing your market research. But unfortunately, sometimes the area size is not enough to be able to accurately determine how many ‘units’ can be build on this land. Your architect will have to accurately determine this for you. This is quite a simple process for the architect and than you will have to move onto obtaining a Development Approval. This is something True Developers do very early in the process. By doing this they are in effect minimising their risk at the earliest stage of the development.

So in the above mentioned article, I wrote how you don’t buy land first!!!! You do your research to determine the land’s ‘development capacity’ and once this is achieved as mentioned above, and you know for sure that you can development X units on this block that cost you X dollars, therefore providing yourself with the land cost per unit, you are able to set about lodging the appropriate forms with the governing body to obtain Development Approval. This is your number one aim. With out it say good bye to your development and your research and your hard work that you did to get to this position. It is important to follow the step by step process for making your development application ‘rejection proof’. There is some detail to doing this, but a briefly, you must first study the building development regulations within your ‘patch’, you must study the building development forms, you must have copies and studied your zoning maps and building height regulations, and you must know what you want to build! Once you have this under control, you must have plans detailed to lodge with your application to the local authorities stating what you plan to build. There are several item that need to be considered here as well, such as:

* Land boundaries and the relationship between them and Building set backs.

* The land area/gross building floor area ratio.

* Unit number/visitor car parks required on the land ratio.

* Car access to and from the site from the road.

And many more other issues that need to be taken into account. This is what determines how viable your project will be. So, getting back to the initial question of its viability, so if you do not know that you can build the amount of ‘units’ on the block of land you have hopefully not purchased, but have ‘control’ of, you will not know its viability and therefore you are setting yourself up for going broke!!!

You need this information to determine how much you have paid for the land per unit, as these and many more issues determine the financial feasibility of the development.

On the 1st September, 1988, the Jamaica Real Estate (Dealers and Developers) Act, 1987 came into operation.

Broadly speaking the two main objects of the Act are:

1) The licensing, regulation and control of persons engaged in real estate business as real estate dealers or salesmen.

2) The regulation of dealings in Jamaican land in development schemes.

The Jamaica Real Estate Board

This Act, establishes the Real Estate Board which is the statutory corporation specifically created for administering the provisions of the Act. The status of the Board is such that before the Minister makes certain Regulations he is required to consult with the Board. This body, while possessing wide powers in relation to its various functions, like any other statutory body must act within the general provisions of the law and paiticular1y according to terms of the relevant Act.

The Schedule to the Act prescribes the Board’s constitution and operating procedure. It outlines the functions, duties and responsibilities of the Board and requires the board to give account of its activities.

Decisions of the Board are not necessarily final and conclusive and certain decisions regarding registration of dealers, salesmen and developers are subject to appeal to the Court of Appeal.

The Board is required to afford to every applicant under the Act an opportunity to be heard if refusal of the application is being considered, the role and powers of the Board’s Inspectors are discussed below.

Inspectors

Matters relating to the appointment and powers of real estate inspectors as it relates to monitoring.

The powers of inspectors are fairly wide consisting of power to

(i) Require information

(ii) Require the production of documents

(iii) Enter and search premises, subject to warrant

These powers must be exercised in a reasonable manner and it will be observed that the Act:

1) Allows time for requested information to be supplied

2) Requires that there be reasonable grounds before an Inspector directs production of document

3) Requires an Inspector to produce his identification card on request

4) Makes a warrant issued by a Justice of the Peace a pre-condition for entry to premises.

It should be noted that Inspectors act not on their own behalf but as representative of the Board in order to ensure compliance with the provision of the Act and assist the Board with the discharge of its functions.

Regulation of Real Estate Business

Nature of Real Estate Business

Describing what is meant by “the practice of real estate business” for the purposes of the Act. An understanding of this is important because the control of property business is one of the main purposes of the Act. This means that not everyone can get up and begin advertising homes for sale in Kingston Jamaica.

The practice of realty business involves the carrying out of a number of land-related activities on another’s behalf in exchange for some form of reward or benefit (monetary or otherwise) that is, compensation or valuable consideration. Not all categories of such activities are necessarily regarded as Jamaica property business under the Act and it excludes certain categories of persons from necessarily coming within the scope of the Act, briefly these are:

1. Attorneys (that is, persons conferred with power to act under a power of attorney)

2. Attorneys-at-law acting within the scope of their profession

3. Court officers

4. Persons with certain duties regarding Jamaica property, for example, administrators (of estates of deceased persons), executors of wills, receivers (for example, in relation to companies), trustees.

5. Persons dealing with land which they partly own

6. Other public officers carrying out their official duties

7. Building managers as regards rental of units in the relevant complex.

Legend has it that the late Sam Walton, founder of Wal-Mart, used to fly over towns he was considering for new stores just so he could get an eagle’s eye view of which way the place was growing. Where he saw new houses, new businesses, new roads and highways is where he would build his new store.

Good lesson: If you are going to make money buying and selling land, make sure it’s where people are headed.

There are TWO basis ways to make money on raw land: You can “BANK” it or you can “DEVELOP” it.

In this article, I will share the first way to make money on raw land, which is called Land Banking.

Banking is the “buy-and-hold” of a parcel that you believe will become more valuable at some point in the future. On the mega-deal scale, land banking is quite the norm in Las Vegas, where hotel and gaming companies buy, hold and trade bare desert parcels like kids swapping baseball cards. At the center of the Giant $7.9 billion acquisition of Mandalay Resorts by MGM Mirage that closed in 2005, for example, were 100 acres of undeveloped land on the fabled Las Vegas Strip. The four parcels were valued for tax purposes at $24 million per acre, a third of the value of a deal that included four brand-name hotel-casinos. But here’s the kicker: Just 10 years earlier, Mandalay had acquired the biggest portion of that undeveloped land for just $1 million an acre.

“We all should have bought property back in 1977,” MGM chairman Terry Lanni told the Las Vegas Review-Journal at the time that the deal was announced. “We could have just taken a dart gun and [picked] anywhere and done well with it.”

On a more down-to-earth level, smaller investors can bank properties, too, either buying and holding larger parcels in the path of development or picking up “remnant” lots in developing or already developed areas. You can find these remnant lots in even the best newer neighbourhoods or subdivisions. By definition, every place has some properties that are less desirable than others-landlocked lots in a lake community, for example, or residential-zoned parcels that front on major streets.

[To be Continued – In the next article, I will be sharing the second way (Land Development) to make money on raw land]

Sustainable development was coined in 1987 by the Bruntland Commission where they defined it as, ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’. Since then, sustainable development theory has been greatly expanded and these ideas have been utilised around the world. The need for development to become more sustainable is important, as many of the planet’s ecosystems are degraded. Without the essential services provided by these natural systems, the planet cannot sustain life. For this reason, sustainability has been integrated into development at an ever-growing pace.

There are many different examples of development for sustainability around the world, with sustainable cities, eco-industrial parks, and corporations all moving towards greater sustainability. The following article will describe the above movements and provide examples of sustainable development.

A sustainable city considers the natural environment in its design and aims to reduce the input of energy, water and other resources, as well as minimising the generation of waste and other environmental disturbances. Vitoria-Gasteiz in Spain is one example of a sustainable city or eco-city. It has implemented a policy of mixed land use and high density development along its major transport routes. An upgraded public transport system allows more residents to live there, while remaining green belts still provide habitat for wildlife and recreational areas for people.

Eco-industrial parks are areas where industries are placed together to co-operatively manage the use of resources and environmental impacts caused by their operations. By sharing resources they improve efficiency and create less waste. An eco-industrial park in Kalundborg, Denmark has a number of businesses that utilise the by-products of other manufacturers. The waste created by a power station in the park is used to make cement by another firm. Other businesses use heat generated by the power plant and cement factory for some of their processes.

Corporations are also recognising the importance of incorporating sustainable development principles into their operations. In America, Interface Inc., a major carpet tile producer has greatly improved its ecological footprint. By using recycled and more environmentally friendly products, and more efficient manufacturing processes, they have reduced their energy and water consumption. The levels of waste, particularly hazardous waste have also been greatly reduced.

By the adoption of sustainable development, all of these examples have improved their environmental performance. As more and more governments, industries and individuals incorporate sustainable development, the future of the planet will begin to look brighter.

The Background of CID – As the development of real estate continues to expand in Idaho, the impact caused by such expansion requires the necessary construction of public infrastructure to accommodate such growth. In 2008, Idaho legislature enacted the Idaho Community Infrastructure District Act (“Act”). The purpose of the Act was to create new mechanism for the financing of public improvements for the public agencies and developers alike. The Act, styled after similar legislation in New Mexico and Florida, addressed a critical issue of how to pay for new public improvement burdens in a cost effective manner. The Act authorizes bonds to be issued and repaid with a mechanism that taxes or assesses the land benefiting by the new public improvements. This provides for much needed community development which may otherwise be infeasible due to the significant costs imposed by the extensive public improvement burdens. At the present time, a Community Infrastructure District (“CID”) is allowed in an incorporated city or in the county if within the City’s comprehensive planning area and the city consents to the CID formation. The Act allows for the issuance of general obligation bonds, special assessment bonds or revenue bonds or any combination thereof. The projected annual assessment, tax or revenue stream secures the repayment of the bonds.

Eligible Public Improvements Available For CID Financing

• Water Improvements
• Sewer Improvements
• Flood Control Projects
• Roadways
• Public Parking Structures
• Landscaping and Lakes
• Lighting and Traffic Control
• Parks
• Recreational Facilities
• Public Safety Facilities
• Financing Costs
• Real Property Interests
• Development Impact Fees

A sound CID should be established with the following overall objectives in mind:

The real estate developer’s financial goals should be met whenever reasonably possible since their project and its customers will be repaying the borrowing costs of the CID financing so long as it does not present any undue credit risk;

The real estate developer should use an experienced consultant to assist them in understanding all available options when going through the CID process;

On larger development projects, the CID financing should be structured to allow for multiple bond issues at different points in time and improvement areas should be employed to minimize the financial obligation on unimproved or underdeveloped property; The particular development project characteristics or constraints should be understood so that relevant risk associated with the project’s development and its ability to repay bond debt is clear. Examples of this are environmental constraints, infrastructure constraints, and private financing caps;

The legal and engineering side of the construction and/or acquisition of the improvements should be understood if tax exempt bond financing is being used. More specifically, the specific construction related guidelines and procedures should be spelled out when a real estate developer is constructing the public improvements and seeking reimbursement from CID bond proceeds;

The estimated annual cost and the maximum annual cost of the CID financing to the borne by all property owners involved in the development process needs to be fully understood and properly disclosed; and

The project’s appraised value needs to be properly performed consistent with sound bond underwriting and appraisal practices because the CID bonds are ultimately secured by the projects value. The appraisal instructions should be clearly defined from a CID bond credit perspective. For example, if bonds are being issued on an appraised value that assumes the project has unimproved lots with no performance guarantees at the appraisal date, then the appraiser has overstated the value for the value-to-lien ratio.

For more information in properly establishing a CID please contact http://DPFG.com