David Arneil
Commercial developments represent a considerable risk to the developer/investor so it is not surprising that a great deal of time is spent tweaking the design to extract maximum value for money. The investor also requires maximum return in the minimum time so the period from feasibility to opening should be as short as possible - any delay to the completion of the building costs money in terms of lost rental or sales revenue. Therefore, any strategy for saving time is of great value.
Here is a brief summary of the development process:
Identify a demand for Retail, Office, Factory space (delete as appropriate). Identify possible sites. Prepare feasibility studies. Set a deadline for completion. Develop design. Agree on final design. Revise design. Agree on final design. Revise design. (Repeat this part as necessary until time runs out). Apply for permits. Revise design. Get contractor. Revise design. Build. Continue to revise design until completion.
Of all the stages in the process one that can be particularly frustrating and time consuming is obtaining construction permissions i.e. the planning permit (ŕzemnť rozhodnutie) and the building permit (Stavebnť povolenie). It is frustrating because obtaining permits is one of the things that is ultimately outside the control of the developer. It is time consuming because
Well that's just the way it is.
So what steps can be taken to secure these permissions as quickly as possible?
1. Be aware of the permitting process. This doesn't really make it go any quicker but it does mean you can plan for it. The requirements can appear quite daunting. For example, consider that in order to obtain time planning and building permits it will be necessary to consult and obtain the approval of some 20 - 30 different local authorities. Unfortunately there is no published guide to the procedure although each authority has its own guidelines.
2. Run the design phases for the planning permit and building permit concurrently, i.e. begin design for the building permit before the planning permit is obtained. In this way the building permit package can be ready for submission as soon as the planning permit is obtained. This is the main way of condensing the process and saving valuable time. However, there is a risk that some work will be wasted if the planning permit is not granted.
3. Split the permits. It is possible to separate problematic areas so that the overall scheme can progress, although this option also has its risks.
4. Perhaps the most important step is to appoint local experts who are familiar with the process. These consultants should have experience with the particular local authorities that will be reviewing the project.
5. Finally, go easy on the consultants and remember that the planning law is open to interpretation and therefore manipulation. Some authority decisions are impossible to anticipate.
David Arneil is Associate Director of Cost Management at Capita Beard Dove. His column appears monthly. Send comments or questions to d.arneil@capita.cz.
