As a follow up to my previous blog, I talked about the importance of meeting with City staff early in the process and how the Inventure team takes the time to research the City’s Comprehensive Plan and Codes on all of our projects. I wrote about how we conducted pre-development meetings with the City Administrator and the City Planner in the early days of our project in Big Lake. We laid out our ideas and made sure they were in line with what the City was looking for. I emphasized how Important it is for us to establish a relationship early in the process with the cities with whom we are working. This blog highlights the importance of that relationship when things don’t go exactly as planned.
The Inventure team is always looking to execute great projects that maximize the returns for our investment partners and provide a suitable space to meet the needs of our tenants. Maximizing returns for our investment partners includes maintaining adherence to the development budget. In this case, the Inventure team had to go to bat for our ownership partners when the development budget was threatened due to unforeseen Sewer and Water Availability Charges (SAC & WAC). Unforeseen, because the City of Big Lake lacks language in their City Code related to such charges.
The solution was to request a reduction in the number of SAC & WAC Units from 3 each to zero. At first, the combined total of SAC & WAC fees totalled in excess of $30,000 to be paid at the time we obtained the building permit. In other words, construction could not begin until our team paid these fees. Upon learning of the SAC & WAC fees, we reached out to the City’s Community Development Director and explained our position. Our position was: in the absence of language in the City Code authorizing and describing the calculation of the SAC & WAC fees, these fees should not be assessed to our project. Initially, the Community Development Director reduced the number of SAC & WAC Units on our project from 3 each to 1 each. This reduction resulted in a new SAC & WAC fee total of approximately $9,000. Our team paid the new amount with a note on the Building Permit that we reserved the right to further dispute the SAC & WAC fees. We paid under protest so that we could get started with construction to avoid delays in the project.
Over the course of the following weeks, our team presented our case at the City Council meeting open forum and ultimately at a workshop meeting. In the end, we were successful in getting the City of Big Lake to reduce the SAC & WAC fees down to zero. There is no doubt our relationship with the City was strained during this process but due to the work our team did early on, our relationship remains intact. We remain excited for this project and are on track to open Beautiful You Dermatology in Autumn 2023.
Doing the important work of relationship building early in the life of the project gave Inventure a path to successfully reducing unforeseen fees. This is a win for our investors, a win for our tenants, and a win for Inventure. This is also a great example of how our team leverages our expertise to get to “Yes.”
John Uphoff is a seasoned Development Associate with a decade of invaluable experience in the field. With a Bachelor’s degree in Planning and Community Development from St. Cloud State University, he brings a comprehensive understanding of the intricate dynamics involved in real estate development.
Throughout his career, John has consistently demonstrated success in spearheading and overseeing projects from inception to completion.