Webinar
Land promotion from a Promoter / Developer’s perspective
Land promotion from a Promoter / Developer’s perspective
Opportunities for Strategic Development are continuing during these uncertain times. The “new abnormal” stimulates new ways of thinking and collaborating, helping how we look to the future of land and development but one thing is for certain, we will need more development and now is a good time to make plans.
In this webinar, we discuss land promotion from the perspective of a land promoter or strategic land developer, the legal and planning framework and the importance of common interest. We’ll consider the different stages of the process, the obligations on you, the consideration of risk and strategies for planning success.
Please do let us know of future topics that you are interested in, or for more information about our webinars please contact us and you can view past webinars at SHMA®ON DEMAND.
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Webinar transcript
(Please note this is auto-generated and un-edited)
0:40
Hello, and thanks for joining us. Today, we're going to be speaking about longer promotion on this webinar. I'm Louise Ingram, partner in the West Central Development team at Shakespeare Martineau. Joining me on this webinar, Andrew Gore and David Pendle, with as planning, which is part of Shakespeare Martineau. So I'm going to be talking about the legal size of land promotion and Andrew and David, and to be talking about the nuts and bolts of the actual planning process and how to get three. And this Webinar is the first of two webinars we're doing. The next one is next week is exactly the same time. And this one is from the perspective of a developer or promoter. And next week, we've got landowner hats on. So talking from the perspective of a land owner. So and Andrew is going to start just discussing the basics of what Islam to promotion.
1:35
Yeah, like, you'll waste. Promotion effectively is a sort of catch all term for trying to kill planning consent on a piece of land. And that can be for, what, I suppose, what we typically associate with residential, commercial, mixed use schemes.
2:01
And as you say in this instance, we're going to look at promotion agreements. And the beauty of information agreements is that in this scenario, both the landowner and the promoter should be working towards the same objective, which is to secure planning consent to that and maximize the development on the sides, and sell it for the highest price to the highest bidder. So the rule to be a common goal and synergy throughout the process in that respect?
2:44
Clearly, the, the type of planning strategy that is appropriate to that to the site will determine the timescales of the lung promotion, will determine the strategy as well in some instances where there's a housing shortfall in particular who thought it might be appropriate to go straight into the planning application. And in other instances, it might be more appropriate to promote a site through a local planning process. So it's it's very much, also for courses. But, yeah, effectively, it's an approach whereby the developer takes the risk for a agreed proportion of the land value upon sale.
3:44
So, from the legal framework, and it is quite straightforward, as ... just said, you know that, the share of the reward at the end, which is, which is why they promote it in, with the deal, it's a two stage process, really.
3:58
It's the obtaining planing, whether that's true.
4:04
Allocation first, and then a planning permission, or straight to the Planning Commission stage. Once they've got that planning, then there will be a disposal stage. And once the land is sold, the share of the sale proceeds. So, just to re-iterate, the promoter doesn't buy, you, got information agreement unless you've entered into a hybrid type of agreement where they might be able to buy a proportion of the land, but on a straightforward promotion agreement, it just goes to the market and the market determines the price. And it's sold to an independent third party. Said throughout that process is a huge amount of co-operation, but ask there's a common interests which is generating the highest price possible in the market, Then that corporation, you should flow fairly easily. So, and David, you were going to chat through the stages of the planning process.
4:56
Yeah, how happy to do that fact. Thanks, Luis. I mean, as Andy mentioned, you know, there are there are a couple of routes to, to promotion within the planning planning system. one of them, obviously as local plan review, looking for an allocation, and clearly that will depend on where a particular local authority within that cyclic law, making dinner. And the second route is a five, a lot of supply situation, where there's a shortfall of London. For whatever reason, there is no, no up to date, local plant, potentially, a lack of land. And it's looking looking to understand that landscape.
5:34
So you've got those sort of, two roots are supposed foot per hour way of thinking about planning strategies and she's been trying to identify a sensible way, way ahead. It's thinking about that context, and that context being king. But, clearly, what we're looking at here is, it is a site, you know, usually within within or joining a settlement and that local geography is really important, depending on where you're looking to do promotion. Because ultimately, we're looking to put together a credible case.
6:06
So, so, understanding all of those things, and, you know, you mentioned co-operation and understanding all of those things, and having dialog about that with, with the developers promoters where we're working with is really important. So, you know, part of our role is to look at that landscape, understand it across all those different variables. Think about the technical case Attic barriers and the opportunities to do. So in a fatty proactive manner.
6:36
So that we have, you know the most up to date evidence in front of us and the best clear picture of ultimately the prospects for success. You, again, you mentioned Luis. What we're looking at here is trying to put together a framework to arrive at the best, the best value within, within the marketplace, understanding the risks, you know, in the appetite to take risks.
7:06
And ultimately, the rewards will be, is, is very important, and clearly, all that evidence, and, as I say, point in the process, the local planning authority, and the technical evidence as it relates to sites really important, really important for, for, for breaking that down, and working out the answer to those two questions, and ask us with many projects. The obvious question you get from, that is how long it's going to take. So timeframe, again, is something central to, understanding the work that we're doing is town planners, and obviously, you know, from your point of view, how the agreement is going to look going forward. So, I know, having worked with were the two of you, before communication, and understanding that backwards and forwards between us is really important, and indeed, sharing it with our clients, and having that dialog is really important.
7:58
Yeah, And I think protecting the, as a developer, and protecting your interests throughout the planning stages is crucial, and, I mean, there's no great secret to that.
8:11
I think the best approach for doing that, protecting the interests is transparency and communication. Because we're assuming that in order to agree to terms and sign an agreement than the, the costs, the cost, the broad timescales, the risks and the the planning strategy will be discussed. But, as we know the as soon as you use, the brain coburn and start promoting a site done that involves community engagement. Involves engaging with the highways, authority, improves scoping, exercise. You may start to discuss pre-op right right through the whole planning strategy, rarely Get responses back from ..., the strategy shapes and shifts.
9:10
The scope of the development that you're trying to school planning consent for, changes, you know, 100 units game can can become an ...
9:19
scheme because of ecology or the requirement for greater infrastructure.
9:28
And as a developer, it's it's absolutely crucial to to keep the landowner aware of what's going on on the agent and things like sexual ... agreements and the contributions that are levied upon the developers. It's important that clearly, though, there'll be a broad budget for those a day, Wal-Mart.
9:58
Education Contributions can, can, can be a lot higher than first anticipated. There might be a need for greater infrastructure.
10:08
The, the, the Agent, and Lambda will want to see the developer is pushing back on that and where it's justified away, where it's necessary, rather than just letting the local authority walk through it. It's wishlist. So, this is, again, to be paid as a developer. It's crucial to, to challenge the position from, that's coming back from, from residents local authority men. This, but, at the same time, trying to agree a strategy that works, walls will yield flooding consent, and at the same time, keeping the London and the agent book to date.
10:56
Managing expectations. So, I think that's the key, really for protecting interests from developer join the planning stage.
11:09
Really, what we're saying there is no trying to keep, keep abreast of all the different factors that affect the town planning case and for bringing, bringing development forward. No, right, to the starter project, we understand what the potential is.
11:27
We look at that, but keeping an eye on the prospects for, for successful delivery of the site, you know, as we move through, whichever process, it is that we're sharing, whether that's local plan review, and an allocation or, or, you know, go straight to application, if the circumstances in a given in a given local authority area. You know, sort of, enable, are supposed to be a fleet of foot around those two things, as well, because, you know, that can change. You know, might be circumstances, where we're doing one with, with, with one ion on the other option. So, that prospects of success, against sound like a broken record, comes down to, not only thinking about that, but communicating. And, keeping on top of that, understanding what our role is, in managing that side of the project, and how much involvement, you know, developer promoter wants some, some, very hands-on, and some of you will want advice on that. Some of you will be very clear on what it is you want to do for you in on your behalf.
12:32
So, someone's on those roles and responsibilities is obviously crucial, and doing that in a way where, where we all understand what the objective is and how long that should take, how began to get there, and accounting sound like a broken record. Communicating that between zero and is a big part of what we're trying to do.
12:54
Putting all of packaging all of that together, as far as my my job, is to create the promotion agreement at the outset, so making sure that everybody's expectations are put down on paper. And everyone knows how that information is going to run with the promoter and develop a hat on a timeframe is very important. We need to make sure that you've got enough time to, if you need to get an allocation and go through the process, And then ensuring that you got time to do that, and also to then obtain upon information as well. That will potentially be opportunities to extend that timeframe and what payments go with that, to make sure everybody's comfortable with that, and the commitment at the time and secure in this promotion agreement on the long length of time, and co-operation between the parties.
13:42
The onus, some owners really don't mind, they just want you to develop a promoter to just run the planning, let them know when they've got planning permission, then go to the sale. Others want to be involved every step along the way. Particularly, I find if landowners have got retain land, than they're likely to be more involved, because they want to see what the impact is on the length retaining. And they also may be slightly cautious if you've got other sites in the area, because they might think that that's potentially competing and my to reduce the chance of getting planning permission on the site ... is involved with so really making sure that expectations are clear at the outset. That if you do have other sites then declare those at the outset to make sure that you're prevented from running promotions on those sites as well.
14:31
But also from your point of being aware that the landowner is going to you to have sort of all these baskets and informational site to the exclusion of all of this is finding a happy medium between Israeli and making sure you're not conflicting yourselves. And ..., make sure that your net to that the acreage and minimum values are going to be high enough to achieve the necessary price on the market. Obviously, there's a huge interest for you guys in that as well because in the promoter landowner and the landowner will share that value So the London, it doesn't have to sell, the minimum value isn't achieved. So, all day promotion needs to be focused on ensuring that at least that minimum value is achieved. And LinkedIn, to that is the costs, which are absolutely at the risk of the promoter developer. And making sure that caps on those costs are realistic.
15:31
So that you was promoted to developer, not out of pocket, spending more money, than actually you can then reclaim through the agreements. And one other thing, just to bear in mind, is that it's quite often when land is sold. An overreach might be put on the land or ramps and strip kept said there is potential for future value for the landowner in the long term. If that's the case, then I think you need a discussion upfront. really sharing with that as well. Because if you, if you've created the value in this land, which then opens up future land, then arguably, you should be entitled to a portion of that, as well potentially, the same proportion as in the same proportions, as you're sharing the land value on this sale.
16:17
Just touching briefly on neighboring landowners and this is where you've got a number of Londoners, who are putting their long together to be promoted, by buying from actual developer. And although it's not directly the consent of the promoter promoter developer, there will be tax implications for the landowners, which may slow the process up initially because they may want to look into collaboration agreements or equalization payments or potentially a land trust.
16:49
So say, you don't necessarily need to be worried about the detail of all of that but then you do just Londoners will be concerned about that. Matrix and developers. Just need to be aware of it and sensitive to it, as well.
17:02
But for the promoter you need to just be thinking the practicalities of having more than one landowner name from the from the Planning point of view for Andrew for David. You know, if you've got more than one landowner. And then, actually, that juggling all of that can be kind of tricky with different expectations, but it's the promoted this. Got to do a lot of that as well. So just knowing the basics of who you are, promoting each report to, how a group decisions made. What happens if there's a disagreement don't want to talk about disagreeing when they're all excited about the potential for a site. But actually, we do cover that off as well.
17:41
So really that was just going to say about landowners. Probably not directly the consent of the promoter, the toxic, et cetera, but something which really just needs to be in the back of your mind.
17:53
So, so, Andy, how do you think how do you make that information work?
18:00
Well, once, we got everything we've just discussed, it is, it can be agreed, particularly your side of things, the ways and hence, the term to grade. The grievance I've been talking about unsigned, then it's the down to the planning side of things. And you know, often people can get very wrapped up in the, in the agreement. The agreement says what the agreement does and who gets what.
18:36
Does before anybody's even spoken to the local authority or winning starts to counsel teens or done a great deal and due diligence around the technical work? So it's it's crucial that use of those two things go hand in hand ready, because it's absolutely imperative that.
19:01
You know, just as communication is the key between the landowner and the agents and the developer, it's exactly the same with the: with the with the local planning authority and the community, and local politics as well. It's about trying to articulate your arguments clearly and trying to demonstrate exactly why you've gone for a particular type of development.
19:33
Trying to make sure that your case is properly justified in technical terms, and I think trying to cast, and that's a bit further than you typically, would, not think we will see a lot of community engagement strategies that are solely writing to the most affected, neighboring residents. And then wondering why they, they'll come back and oppose the schemes that are heavily. I think one of the supposed to keep trying to make, for a more streamlined planning process will be to try and cast.
20:27
And that's a little bit wider in terms of coding fate and future development, trying to seek the views of people who are in housing need for affordable housing need and trying to understand how your scheme can respond to things like. Typically, education is a hot topic, and health care is a hot topic and traffic.
20:55
So if your scheme can be seen to be addressing some of those issues, and often it can just be land, It doesn't necessarily need to be financial contributions. It can just be the London, which is again, if you've got a landowner who has additional London, is receptive to a discussion about throwing additional London than brilliant.
21:25
I mean, as far as the overall, the, in theory, the promotion agreement should work for, for everybody, because you've got a common goal in trying to secure planning consent, trying to maximize the development on the site, and trying to sell it on to an end user, House builder, or developer for the most amount of money.
21:57
Seems to me a lot of what we, what we're saying here is around understanding context, being been alive to the various different things that are going on with with, you, know, a parcel of land that where we're trying to promote and sharing those things.
22:16
Know with, with, with promoters developers, who clearly are Managing the project, but also with the people around, around the project, whether that's the local authority or different parties that you mentioned, and whether that's education or highways. Or, indeed, the community. And ultimately, trying to de risk as best, as far as we're able to try to de risk, you, know, the process to move forward to the common goal that you referred to, which you see ultimately CNC MLM developed. So. Almost a, sort of a no surprises scenario, which, again, goes back to roles, responsibilities that were mentioned earlier, in understanding our role, and being able to deliver that effectively for the promoters and developers that we work with.
23:02
So, without further ado, it probably remains for me, to say thank you for joining us today. I mean, I certainly enjoyed listening to work to chew on the interface. I think, you know, all of us probably could have talked for a for a lot longer, and a lot more in-depth, certainly whilst Sunday elevator talking, I was thinking about things that are going off on tangents about things that are important and things that we might think about. So, if you, if you've enjoyed that, which, which we hope you have, and you want to have a further conversation, or touch on something, or specifically, or especially, if there's something that we didn't mention, that you have an interest, and, then our details on the screen, and we'd encourage you to get in touch with us to to, to continue that conversation. So, I'll just say, thanks very much for joining us, and hopefully, we'll hear from you again.