14 Aug

5 Unknowns of Retail Development Leading to Success

By Aidan Kelso, Development Associate  &  Al Callegari, SVP – Development

In today’s market, no two retail development transactions are alike. Every development project and tenant client have their own challenges; whether it is obtaining variances, creating site accessibility, or assembling land to create a development site. One common trait of a successful developer is knowing the challenges and having the experience of dealing with a wide range of issues that are relevant to each land assemblage transaction. Here are five of the top unknowns in development and how DLC turned them into opportunities for success.

Unknown 1: Turning an Irregular and Non-Prototypical Location into a Fully Functioning Prototype

Developers need to be able to visualize the transformation of what is currently there to what could be there. Take the Walgreens DLC developed in Paterson, NJ. We were tasked with finding a site for Walgreens directly across from St. Joseph’s Regional Medical Center, a state-designated trauma center that cares for the most complex cases. Securing a site big enough to develop a Walgreens was virtually impossible given the extreme density of the area. We put on our thinking cap and came up with a plan of assembling ten contiguous properties, owned by seven different owners to create a perfect site. Finding the land was only half the battle. Directly across the street from our development location, was a local pharmacy which had an existing multimillion-dollar business with the Hospital. DLC was able to facilitate a deal with the owner, where they would sell the existing business to Walgreens. Not only did we deliver a non-prototypical store that functioned just as well as a prototype, but developed the site with huge retail potential into a location that became a top ten store in the chain within a year.

(Walgreens Construction in Paterson, NJ by Jeffrey Sauers of Commercial Photographics, Architectural Photo Artistry) 

Unknown 2: Taking Inferior Limited Access and Converting it to Full Access   

For the development of a Chick-fil-A site in Farmingdale, NY, site accessibility was the cornerstone factor in the deal. We were tasked with finding a Chick-fil-A site on State Route 110, where 55,000 cars pass daily. It seemed ideal to create a site on a signalized corner with access from all direction. However, at the particular intersection of Gazza Boulevard and State RT. 110, there were no hard corners available to develop. With one parcel of land – one lot off the hard corner – under control, we had to create access back to Gazza Boulevard to create an entry point to the signalized intersection. We negotiated a deal with a local business owner to purchase his parcel of land which ultimately gave us the much-needed access back to Gazza Boulevard. Thanks to the improved accessibility of the site, this Farmingdale location is forecasted to be the top performer in Long Island. Remember, inferior accessibility could render a site useless.

Unknown 3: Poor Signage, Poor Business 

For a Chick-fil-A site in Farmingdale, NY, we had to apply for a few different sign variances. The most important of which was obtaining a variance from the New York State Department of Transportation to allow us to erect a monument sign on State land in between the Chick-fil-A building and Rt. 110. The State did not allow an easy pass for us. Not only did we have to negotiate an easement agreement to use their land, but we also had to show the engineering study that this sign would not impede drivers’ line of vision while exiting the site. We coordinated our efforts with a traffic engineer and after multiple studies, our engineer was able to show the NYSDOT that our sign did not impede drivers’ vision, granting us the right to erect the monument sign. Without this, there would have been poor visibility and the client would have lost a key component to marketing/branding this location. This could have been a deal-breaker if we were unable to erect a monument sign on RT. 110.

Unknown 4: Never Underestimate the Importance of Preplanning Meetings and Work Sessions with Governmental Approval Groups

When contemplating a site, our development team works with the local municipality, studies municipal rules and regulations, and plans what we will need to apply for in order to obtain our governmental approvals. Our team also conducts research on what has previously been approved in the municipality and leverages this information to help build a case around our pitch. Because no two retail development transactions are alike, we work closely with civil engineers and land use attorneys to fully comprehend each site and entitlements/approvals that run with it. We also coordinate regularly with the Planning Board, Zoning Board, and the Board of Architectural Review in various preplanning meetings, so that come time for our public hearing we know exactly what will need to be done to gain municipal approval and move forward with our development project.

Unknown 5: Think about What is Generally Taken for Granted…Utilities Availability and Cost

We heavily rely on civil engineers to assist us through the process of contemplating where we will gain our utility connects and where they will run through a site. The goal here is to keep the utility run as short and efficient as possible. In some cases, this means running it through another site before reaching its final destination. If this is the case, we will work closely with the landowner – either the state or a private landowner – to create an easement agreement allowing us to do so. Further, municipalities have enacted a gas moratorium to address the supply-demand imbalances. We need to fully contemplate what the forecast for a development site is and may need to look for alternatives for our clients. Striving for efficiency in running utilities will not only make our development plans easier but will also save on cost.

(Completed Walgreens store in Paterson, NJ by Jeffrey Sauers of Commercial Photographics, Architectural Photo Artistry)