LOS ANGELES—Land entitlement is only getting more challenging in Los Angeles. From CEQA lawsuits to new anti-development legislation, like the Neighborhood Integrity Initiative that hits the ballot in March, to rising land costs, there are a lot of obstacles for developers. We sat down with Rob Solomon, chief development and legal officer at BLT Enterprises for an exclusive interview to discuss the land entitlement process, how it is becoming more challenging and what developers need to know before jumping into the land entitlement process.

GlobeSt.com: Has the process to obtain land entitlements for new development become more difficult this last year? Has the animosity in Los Angeles about new development made securing land entitlements more difficult?

Rob Solomon: I am not sure that it has become more difficult, it has always been difficult. What has been more challenging is making projects pencil as land prices continue to skyrocket due to a number of factors, including lack of available sites and an unlimited flow of capital. In addition, development costs have increased and opposition to certain projects has become extremely well organized.

Also, there is significant uncertainty with Measure S, the Neighborhood Integrity Initiative, on the March ballot. If it passes, it will impose a two-year moratorium on almost all projects in Los Angeles that need a zone change or general plan amendment. I don't know if Measure S is the result of animosity towards development in general or how project approvals are granted in Los Angeles.

Moreover, developers continue to face challenges when it comes to balancing a project's benefits with its impacts on parking, traffic, overcrowding and gentrification, among others. When you add all of this up obtaining entitlements is difficult and will continue to be difficult.

GlobeSt.com: What is your strategy for navigating through the land entitlement process? What do other developers need to know before jumping in?

Solomon: The most important elements of securing a land entitlement are to understand what may be objectionable about your project, figure out solutions to address concerns that will arise and generally rally support for a project at the outset. Too often, owners or developers will simply file an application for entitlement without knowing the hot-button issues and try to garner support through meetings with various stakeholders, including local officials and neighborhood groups.

These meetings are essential. By proactively communicating with local leaders and city officials, developers can learn about local objections to any given project, as well as learn about what the community wants. We also highly recommend sharing renderings early on in order to best communicate the overall vision of a project – a picture is worth a thousand words. These strategies will help to identify issues early on in the process and allow a developer to implement changes that address local concerns.

GlobeSt.com: Because the entitlement process is so difficult, has entitled but undeveloped land increased in value?

Solomon: Absolutely. There is a significant premium paid for entitled land. Entitlements create value. The entitlement process is complex, requires a great deal of time, capital and finesse, and is subject to risk. There are lots of developers that will pay a premium to remove the risk with an entitled project that can break ground quickly. Keep in mind, however, that when the market turns (and they always do), lots of entitled land will remain undeveloped until the next cycle.

GlobeSt.com: Do you expect this issue to get better or worse in 2017?

Solomon: It's not going to get any easier, and if the Neighborhood Integrity Initiative passes, a lot of developers will go fishing for the next two years.

GlobeSt.com: What is your strategy for navigating through the land entitlement process? What do other developers need to know before jumping in?

GlobeSt.com: Because the entitlement process is so difficult, has entitled but undeveloped land increased in value?

GlobeSt.com: Do you expect this issue to get better or worse in 2017?

Solomon: It's not going to get any easier, and if the Neighborhood Integrity Initiative passes, a lot of developers will go fishing for the next two years.

Instant Insights /

Land Entitlement Is Only Becoming More Challenging

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