Redeveloping the Norm: Identifying and Overcoming Developer Obstacles to Redevelopment in New Jersey
As buildable land becomes scarce in New Jersey, redevelopment is becoming an increasingly important vehicle for accommodating future growth. This report looks at ways to make redevelopment projects easier and less risky.
For the report, Redeveloping the Norm: Identifying and Overcoming Developer Obstacles to Redevelopment in New Jersey, the author surveyed mid- to large-size developers who have significant experience in the intricacies of redevelopment projects, to identify what they considered the key cost and risk drivers of greenfield vs. redevelopment projects. While no two projects are alike, the report identified several key components of a typical redevelopment project that represent opportunities to lower costs and reduce risk, including:
- Hard costs, such as land acquisition and site preparation,which can be controlled via redevelopment or rehabilitation designations and with property purchase contingencies;
- Project timelines, which can be shortened by streamlining the permitting and approvals process; and
- Risk, which generally starts out higher in redevelopment projects but will drop commensurate with efforts on the part of both the developer and municipality to shorten the timeline and bring certainty to the process.
The report examines, weights and evaluates cost and risk factors to show the implications of various development scenarios on the projected success of a project. The result highlights the areas where reducing cost and/or risk will have the biggest payoff.
However, the developers surveyed made clear that it is possible for cost and risk burdens associated with redevelopment to be mitigated. Developers were virtually unanimous that the most important factor in mitigating both cost and risk is a well-organized municipality that has articulated a clear vision, is interested in collaborating with a redeveloper who can align with that vision, and has the necessary administrative capacity to support the redevelopment effort. Previous redevelopment experience on the part of the developer was also cited as important.
Municipalities interested in fostering redevelopment can look to this report for insight into how developers evaluate projects and how towns can work with developers to conceive and design mutually beneficial projects and a smoother implementation process.
