CASE STUDY

Engagement	Entitlements assessment of a non-performing development.
Client	Financial institution
Partner in charge	Jason Duckworth
Project Manager	Rich Wilson

 

Our client was a major commercial bank who had recently taken back a 30-unit luxury residential development in the Mid-Atlantic region from a borrower who had declared bankruptcy.  Nearly all of the community’s site improvements were in place, a few homes had been built and sold, a few builder spec homes were partially complete, and many lots remained vacant.

The project was initiated at the height of the housing boom with the intent to target the highest possible price point for its location.  As the housing market weakened, the project became infeasible.  The bank came into possession of the property without a clear understanding of the project’s status, but hoped to recover their investment quickly by selling the project in its entirety to a new developer.  However, early attempts to market the property were impeded by uncertainty over responsibility for completing site improvements, and the status of public sewer.

ADS was engaged to research, organize and summarize pertinent project, market and entitlement information.  The bank required a thorough understanding of the project’s current construction status and municipal obligations.  Our work took the form of a five-part Project Summary, which included:

1. Development Project Investigation / Analysis
   Arcadia studies all project site data to get a full understanding of site implications in terms of physical planning, zoning, community impacts, natural resources, and infrastructure requirements.

 

2. Comparable Market Analysis
   Arcadia researched data on comparable home sales in the sub-market in order to provide a better understanding of current sales prices and velocity.

 

3. Project Summary Sheet
   Arcadia summarized all project information likely to be of interest to the development community into a one or two-page marketing brief for dispersal by the bank to potential purchasers of the property.

 

4. Entitlements Status Report
   Arcadia created a binder of all pertinent documents regarding necessary permits and approvals from local and state agencies, including local approvals status including any liability to the municipality, PA DEP sewage planning module status, and others were applicable to the specifics of the project.

 

5. Electronic Access
   ADS also managed the creation of digital files of all documents and provided the digital files to the bank via compact disc.  ADS also made the digital documents available on a password protected FTP.

 

This Project Summary identified a number of owner responsibilities and enabled the bank to take steps that would make the project more marketable.  Arcadia Development Services performed the work in just three weeks, made possible by multiple Arcadia staff making extraordinary efforts to meet the client’s aggressive timetable.