Contact Us

Constructive Candor

Got Entitlements?

FS-601940bEntitlements are key when developing or selling large commercial or industrial tracts of land. When a buyer or tenant comes into a market looking for a property, they typically want to move ahead with their project as soon as possible and time is of the essence.  If your property is not generally entitled for the proposed use, then you likely just lost an opportunity due to the unknown schedule and outcome of the entitlement process.

What are Entitlements?

Entitlements for a commercial or industrial development include Site Plan and SEPA (State Environmental Policy Act) approvals from the agency that regulates the property. Typical site plans will show the proposed building square footage, parking and drive aisles for both cars and trucks, storm drainage facilities, landscape, buffers and setbacks. In some jurisdictions, SEPA may require a preliminary fill and grade plan.  These approvals also require consultant studies, such as, traffic studies, storm drainage analysis and wetlands.

Site plan and SEPA approvals can be completed for an assumed maximum build-out of the site and the addendums can be approved by the agency issuing the original approvals.  

Addendums allow the property owner to tailor existing entitlements to meet the needs of a development proposal when the opportunity arises.  This saves time and allows more predictability in the process.   


What Benefits do Entitlements Provide a Buyer or Tenant?

Schedule – When a buyer or tenant comes into the market and they find a property that is in the appropriate location, then one of the first questions they ask is “what is the permitting and construction schedule and when could they occupy a new facility?” The site plan and SEPA approval can take months due to the time required to prepare studies, agency review and any negotiations.  Without the proper entitlements, no one knows how long the process will take and the potential tenant cannot be assured of a reliable development schedule.  These unknowns are risks to all parties in the transaction.

Budget – Without entitlements a buyer can not accurately compare the price of one property to another. The buyer will need to know what the project mitigation requirements are going to be for items such as; traffic improvements, fire impact fees, significant trees and domestic water availability.  If the entitlements are approved and these mitigations are known, then cost can be estimated for the required mitigation.

Zoning Clarifications – Property zoning is not always clear in regards to what uses are allowed and some land uses can require a Conditional Use Permit.  An approved site plan and SEPA that describes the proposed uses goes a long way toward clarifying for a buyer that a specific use is allowed to be developed on a given property.

An example is a big box warehouse where some jurisdictions require a site plan approval by the Hearing Examiner or a Conditional Use Permit.  Many of the recent industrial developments are warehouses ranging from 400,000 to 1,000,000 square feet of building.  Developments of this size can trigger the threshold for a Hearing Examiner approval.   


If you want to maximize the value of a commercial or industrial property and ensure that your project can compete with other properties, then entitlements are the next step to ensuring a buyer or tenant that you can deliver a site that meets their requirements.  Entitlements increase the value of property by defining many of the unknown mitigation requirements and adding confidence to the project schedule.  

Subscribe to the MacKay Sposito Blog!

 If you have questions or comments please respond here or you can reach me by email or LinkedIN.



Topics: Land Development, Residential Land Development, Commercial/Industrial Land Development

Leave us a comment below