Top 10 Construction Mistakes to Avoid #4

#4 Land Cost is more than a per acre price tag you pay at closing:

Don’t do it.  Please don’t do it.  Don’t buy property based on the cost per acre without first checking with me and our team at American. 

There are tons of variables that come into play when deciding the most cost effective piece of land on which to construct your facility.  There are too many to name here, but I will hit a few of the big ones:

a.  Most commercial, industrial and office facilities will require some type of Fire Protection System (FPS).  The codes are constantly changing and requirements are getting stiffer each year.  Buying an ‘inexpensive’ piece of land in a rural location can be costly in the end.  Not having access to municipal water services makes it really tough to economically install a FPS.  A well will not give you the proper water pressure or gallons per minute.  Underground water storage tanks have to be designed, built and maintained to meet the FPS codes.  These are really costly and can limit your expansion possibilities.

Fire walls are another alternative to an FPS and usually consist of carving your building into smaller pieces, separated by a masonry wall.  Any opening must be fire rated along with any penetrations.  This can really limit your work and product flow.

Both of the above options can be viable and legal.  We’ve done it.  The cost implications, however, often are greater than if you purchased a seemingly more expensive property in a municipality.

b.  Storm Water Management Plan (SWMP) is a fancy way of describing where rain water goes that falls on your roof or parking lots.  The DNR and other agencies require you to manage both the Water Quality and Water Quantity that comes off of your site.  Commonly this is managed through the use of Retention/Detention Ponds, Rain Gardens and Infiltration Ponds. 

These are a necessary evil to developing property in today’s world.  The trick, however, is to decide whether you would rather have these facilities on your property taking up valuable space or purchase property that has been master planned to accommodate adjoining properties into one larger SWMP system.

Checking to see what if any accommodations have been made is important when deciding the real cost of property.  We can help.

c.  “Sewer and water are available across the street.”  This is a common phrase spoken by many of my customers.  Access to these public utilities is great.  Having them stubbed into your property and out of the public roadway is awesome.  That’s what you want.

It is not uncommon to cut open a road, extend sewer and water pipes into your land, and repair the street.  Even though it is not uncommon, it is not cheap.  Often public utilities are buried 10, 15 and even 20’ deep or more.

This all adds to the cost of the project and reduces the impact of the perceived  bargain you may have gotten on the land.

A full understanding of access to public utilities is one of the first questions the team at American will ask a real estate broker or land owner when considering  property for ourselves or our clients.  It is important to us because it is important to you.

As I mentioned above, there are a ton of other factors involved in deciding on the perfect property for you.  I’d welcome the chance to chat about them all.