Posted by ray@lcorn on October 24, 2000 at 22:58:16:
Sounds like you’re into a development option deal. The way it works is the developer options your property, does the initial due diligence work, and tries to gain the approval of the end user’s site committee. Depending on what type of client he has for an end user, the decision will likely be up to a committee. They can give you heartburn with some of the requirements they can come up with. It’s a lot like being nibbled to death by ducks.
Whatever the use, be prepared for a long process. I hope you crafted the option with significant option money. As a seller, I often structure the option with monthly payments. That way the developer doesn’t have to come out of pocket all at once, but over the ninety to 120 day option period I get more than most will get. As a developer I try to hold the deal for as little cash as possible for as long as possible. I’ve had a number of these deals drag on for a year or more. If it is a drug store, be prepared for it to take longer than anyone thinks… that market is very soft right now. Ditto for hotels. Restaurants and C-Stores will move a little faster, but if a rezoning is required you will be at the mercy of the Planning Commission. If you know anybody on the commission or the governing body, now is the time to put them on your Christmas list!
Your cross access easement is good thinking, but be sure you get it in writing in the contract, and that the deed and plats also reflect the agreement.
You may also want to check on the sign ordinance… you may want to reserve space on the first parcel, or vice versa, for sign locations. Interstate signage is critically important, and height is more important than anything, so keep an eye out for hilltops and trees… either can make 100’ all the difference in the world in a good location. You may want to also consider utility easements. If the developer is bring utitlies to the site, you want to be able to access them.
A tip: Be sure you write into the deal that if it doesn’t close you are entitled to all surveys, environmental and geotechnic reports generated by the developer. They will come in handy for the next buyer.