Feasibility and Site Acquisition
Feasibility and Site Acquisition
The feasibility study is a very important starting point for the development and is the foundation for the project management contract. It should clearly identify challenges, opportunities and next steps for moving forward.
“Two things strike me this morning: how incredibly skilled and professional Ronaye is and how brilliant the original members were to hire Ronaye. I worked for Fortune 100 sized companies in manufacturing for 20 years and would have killed to have my project managers be half as thorough and skilled in the soft stuff (handling difficult people at info or neighborhood meetings) as well as the left brain stuff of budgets and schedules and building details.”
Creekside Commons Member
The feasibility study should include a financial plan, cash flow projection and development pro forma that estimates the cost for a home in the completed community based on the best understanding of current conditions. The following questions need to be answered (in general terms) to prepare an initial development pro forma:
Character and form: How will the buildings relate to the site? What will the likely average home size be? What type of units (townhouse or apartment)? How large will the common house be? What outdoor amenities will be included? Will the parking be above or below ground? How much in the way of “green building” features will the group want to include? What level of quality will the group want in the finished product?
Development:Will the cohousing group act as the developer or will there be a developer partner expecting to receive a profit? How long is it likely to take? What are the servicing requirements? What are the likely per square foot construction costs for the type of finishing the group desires? What are the local permit fees and development costs? What is required to get approval to build the project and how long will it take?
The information below provides an overview of the services that CDC can provide for this phase:
- Identify red flag issues related to legal title
- Investigate access to services (hydro, water, sewer) and potential infrastructure costs (roads, offsite improvements)
- Determine whether the site can accommodate the type of community the group is envisioning
- Determine whether any other consultants are required to establish feasibility (e.g. perk tests to confirm soil suitability for a septic system)
- Confirm the process, timeline and cost to get development approval from the authorities having jurisdiction
- Estimate potential construction costs
- Identify available investment equity from group members
- Identify potential sources of financing for land purchase
- Prepare a development pro forma with estimated costs for a completed home in the community
- Review current market values for comparable product to determine potential marketability of completed product
- Prepare projected cash flow requirements
- Identify best approach for project management, marketing administration and community building.
- Negotiate an agreement to gain control of the property selected by the client.
- Coordinate the appraisal and mortgage application required to secure a loan for the site purchase
- Coordinate the equity contributions from the members
- Coordinate the closing on the land purchase
For more information or to request a quote please contact: firstname.lastname@example.org