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The Importance of Due Diligence Engineering Prior to Commitment to Purchase

January 15, 2020

Locating the perfect piece of property for your new development is the ultimate chance for your imagination to run wild with dreams and plans. In your mind’s eyes, you can see exactly where the project will sit and how it will exist in perfect harmony with the surrounding landscape.

But as the old saying goes, “If you fail to plan, you’re planning to fail.”

Unless you are careful, the zeal for a site and lofty expectations for the perfect project could do more harm than good. At Kimley-Horn, we frequently see how a lack of proper planning can set your production schedule back and make it go over budget. Sometimes, a client involves us well after a property is under contract and a preliminary concept plan is already underway. Once we enter the scene for civil design and permitting, we quickly uncover issues that can delay schedules and blow budgets which often alter the developer’s project significantly.

Proactive due diligence allows real estate developers to identify and evaluate risks and better define the measure of success for any project. Specifically, pulling your engineering partners into the initial evaluation of a project can help stave off late complications. Kimley-Horn has assembled a comprehensive list of situations and project components that should be thoroughly vetted before making yield commitments or purchasing your next property.

#1 Access and Driveways

Sight distance, spacing, and offsets are three factors that impact how, when, and where you can install a driveway. Existing driveways may be nonconforming and subject to removal when redeveloping a site or changing its use. Since these considerations can vary by county and city, it is essential that you know exactly how they affect the perfect design scenario.

Additionally, it is good to consider the following as they can impact cost and design:

  • Will the development require roadway improvements, such as turn lanes?
  • Are there prior studies or restrictions which restrict site access?
  • Does the city have plans to acquire right-of-way along the property’s frontage?
  • What is the lead time for obtaining a driveway permit in any particular jurisdiction?

The more you know before design begins, the better prepared your team will be with alternate solutions and contingencies that do not hamper your project.

#2 Floodplain

Texas has experienced a significant amount of rain in recent years from a variety of severe storms and weather patterns. You must discover whether or not your property lies in an existing floodplain, as this variable can dramatically affect your project. The presence of floodplain on your site will influence specific design parameters, including:

  • Finish floor elevations are required to be a certain height above the base flood elevation. The height, which varies by municipality and watershed, can significantly affect construction cost and accessibility design.
  • The floodplain boundary will dictate your driveway locations, as access points need to be out of the floodplain.
  • Emergency service districts and fire marshal regulations often limit occupancy when site access is hampered by offsite low-water crossings.

Additionally, as a result of the Atlas 14 study undertaken by the U.S. National Weather Service, real estate and construction professionals in the Austin metropolitan area must now base their work on the 500-year storm events and associated floodplain extents which are typically excluded from property disclosure statements.

#3 Existing Topography

A natural extension of the floodplain discussion, engineering experts will analyze the geographical and geological details of your potential property. Just because the land appears to be flat and featureless does not mean it will hold up to the demands of whatever you want to build. The literal lay of the land can influence multiple aspects of the design and construction process, including the following:

  • Offsite stormwater flows, as flat sites often drain poorly and may be inundated in minor rainfall events.
  • Building location and finish floor elevation, as your foundation may require internal elevation splits if the site has too much topographic change along the building footprint.
  • Potential development areas, as the City of Austin regulations generally limit construction on natural slopes over 15%.
  • Ability to regrade a site, as the City of Austin limits the depth of cut and fill.  Non-administrative variances require approval at public hearings which can significantly affect the permit timeline.
  • Retaining walls, which may be needed to provide compliant building pads or parking facilities.
  • Pond location and footprints, as the geometric requirements for stormwater quality and detention vary significantly by depth and outfall location.

It is imperative that you evaluate existing conditions, because you do not want to learn that you committed to a problematic property after design begins. 

#4 Existing Utilities

Kimley-Horn has experienced several instances where production was dramatically delayed because the developer did not confirm the presence of utilities on the property. If utilities already exist, you need to know where they are located, how deep they were constructed, and be ready to answer the following questions:

  • Are the existing utilities far from the property line?
  • Do the existing utilities lack the capacity to serve your development?
  • Is the existing wastewater line on the high side of the site?
  • Is the existing water line over 16” or constructed with atypical pipe material?

If you reply “yes” to any of those questions, you may need costly utility extensions, public system upgrades, lift stations, and/or grinder pumps installed in order to provide adequate service to your end user. If you wait until after closing on the land, the additional cost of extending utility infrastructure could hurt your budget, extend the construction and permitting timeline, or ultimately kill your project.

#5 Additional Site Constraints

Once the above issues are addressed in a proactive manner, you will need to focus on these miscellaneous concerns. Each one comes with its own nuances, which is yet another reason why contracting an engineer during the preliminary phase of development will save undue time, money, and headaches.

Existing Easements: These dictate where proposed utilities, buildings, landscape, and other elements of your future development can be located. Vacating an existing easement may take months even when no facilities are present.

Compatibility: Not only does this affect your development in terms of the height and location of your buildings, but specific site and architectural design standards will apply depending on the jurisdiction.

Impervious Cover: Often measured as a percentage of the overall property, impervious cover includes buildings and ground cover that do not allow rainfall infiltration. You will need to know the specific imperious cover limit for your property, according to jurisdiction, as it directly impacts the buildable portion of your property. Most municipalities limit impervious cover by zoning, but additional limits may be imposed by land use, watershed, corridor overlay, subdivision plat, or a myriad of entitlement restrictions.

Environmental Features and Existing Vegetation: Another element dependent on local legislation, you must account for environmental and ecological preservation in order to allot the proper amount of land area to comply. A consulting engineer can assess the likelihood of environmental features through a desktop review and advise if further evaluation or field observation is warranted. It is essential to identify tree preservation and mitigation requirements, even before a tree survey is completed, because removing protected or heritage class trees can be burdensome and costly.

The Austin metropolitan area is one of the top real estate markets in the country, according to a recent study by PwC and Urban Land Institute. Developers should take advantage of all the activity and attention our city is receiving but also take prudent steps to evaluate prospective sites. To ensure success with your new property and bring the imagined concept to life, it is important to be aware of the local hurdles and roadblocks associated with site development.  Site development regulations are not just complex but are also constantly evolving or being reinterpreted, so engaging with the experts and professionals who are trained in such oft-overlooked minutia will strengthen any development team. The sooner you involve an experienced civil engineer in your new development – even before you make an offer to purchase – the more successful your project will be.

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