Municipal leaders must evaluate a number of factors when faced with a company pursuing a development project within their borders, says Charles A. Nemer, a Principal at McCarthy, Lebit, Crystal & Liffman. Business leaders who are willing to work with the community to address these details in a constructive fashion demonstrate a level of respect that can often help it move forward more quickly.
“When a business is looking to expand, it has typically studied the situation and crafted a plan that will allow it to capitalize on a particular opportunity,” Nemer says. “This type of project, however, is also likely to impact the municipality to some degree. Thus, it is imperative that company leadership describe the thought process behind the plan and show what it would mean for the community’s future.”
Smart Business spoke with Nemer about how building a stronger working relationship with municipal leaders can lay the groundwork for cooperation on important projects.
Where do companies run into trouble when undertaking capital improvement projects?
Zoning is the most common point of conflict. When a property/business owner seeks a variance for a particular use that is not permitted under the current zoning ordinances, it sets up a debate between the applicant and the municipality.
On the business side, the company can talk about how the new development will create jobs and therefore, strengthen its own market and industry positions. If the company has been around for a long time, it’s an opportunity for community leaders to reaffirm their commitment to the business. When it’s a new business, it could mean an influx of jobs as well as the chance to diversify the local economy. These are all worthy points for the company to make as it attempts to sell the project.
There is another side of the equation, however. What is the effect on the municipality? What would be the larger consequence of rezoning a particular parcel of land? How would it impact traffic? Does this location have the necessary roads, sewers and water lines to support this plan? How would the new development fit in with the other properties in that part of town?
In addition to physical changes, there are economic considerations when a business wants to build or expand. Tax abatements are desirable for businesses that want to minimize expenses, but they take valuable funding away from schools that rely on tax revenue to operate. What is being offered to ensure the schools are not harmed by this change? The burden is on business leaders to prove the worthiness of their plan and to craft it in such a way that the community benefits as well.
What can a business leader do to help this process along?
Business leaders need to show a willingness to sit down and talk about the details of their plan. Ideally, this is done before any applications for variances are filed with the municipality.
The company should work with its legal counsel to put together a presentation that highlights the benefits that would be realized for both the business and the community if the plan is approved. At the same time, it should not attempt to gloss over points that may be a concern to municipal leaders.
The purpose of the meetings is to discuss these potential hardships and benefits of the project and determine if solutions can be found. Open dialogue is an important part of this effort, as is the ability to see the project from other points of view.
Local government leaders are elected or appointed to represent their constituents, which includes business owners as well as the people who live in the community. Business representatives need to understand this dynamic and be mindful of it as they strive to get their project approved.
What role can legal counsel play in this process?
The company should work with an attorney that has experience in municipal law and can rely on that experience to initiate the dialogue between the business and the municipality. This is not something that will happen quickly. It’s about building relationships and patiently working toward a conclusion that benefits both parties. The company’s approach to this dialogue can go a long way toward determining the ultimate outcome. ●
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