Why Developers Are Starting to Think About the Next Downturn
Nossaman LLP just added to its environment and land use practice group with the addition of Michael Durkee as partner, who explains to Bisnow why development agreements are back in a big way.
Michael tells us he's worked on California’s most controversial development projects, including the San Jose Giants Ballpark Proposal, the Buck Center for Aging and Research (below), Black Point, Buck Mountain Ranch and the North Livermore Initiative. Now he's seeing a huge upswing in development agreements, which are letting people hold onto projects longer to keep them alive during downturns, allowing developers to not deal with renewing approvals—which no one wants to deal with.
Michael says there also is a "brain drain" going on, with a lot of the people that did the development work in the '70s and '80s retiring. There is "a lot of learning that has to go on," which has led to newer people cautious on spec building that don't want to do anything wrong ("no" is the popular phrase as opposed to "yes"). The recession gutted the public agencies, he adds.
In 2005 there was no end in sight, Michael says, and now the developers are more cautious and business savvy. They need development agreements and conditions of approval that are better and fiscally longer. He just finished one in King City, which could see a rebirth, and will likely do projects in Tracy (above) and start one for Blackhawk in Antioch. He's also handling a "big thorny issue" for a landowner in Berkeley who is feuding with neighbors over a subdivision, which is currently at the court of appeals.