1. applicant will clarify or amend the application and ask for it to be reviewed again
2. If denied again, they have a right to a hearing before the zoning/planning sub committee...a recommendation is made
3. If still denied after negotiations...a hearing before all of city council is granted and either
   1. Approved
   2. Deny and remand back to the planning staff
   3. Deny with prejudice

1. Allowable uses for zoning classes
2. Minimum lot size per zoning classification
3. Maximum FAR
4. Building bulk/density limits
5. Setback/building line
6. Building height limits
7. Building footprint/envelope
8. Parking ratios

• light industrial-no minimum
• medium industrial-5 acres
• heavy industrial-10 acres
• single rez-1/4 acre
• multifamily-20 units to the acre

loan for the cost of constructing improvements...based on a combination of

1. the appraised value expected upon completion
2. the hard costs
3. the soft costs

1. The perm lender agrees to buy the construction loan on completion
2. the two lenders agree about their duties and responsibilities

1. acquire
2. develop the site and construct improvements
3. provide finish-out and readies the space
4. manages after completion
5. may eventually sell

1. intent of owning and managing
2. sell after lease up
3. develop land and buildings for lease in a master planned development

1. the appraised value expected on completion
2. the hard costs
3. the soft costs

1. Sold upon completion and lease-up to investors who want to own real estate but do not want to bear the risk of development....short term financing
2. Retain ownership and manage as integral part of business...longer term financing...usually construction and perm
3. May sale or refi upon completion...may have short term financing with an option/commitment to extend financing for 1 or 2 years

1. seek another perm loan
2. interim continue to finance
3. foreclosure

1. when the developer cannot or does not want to pay fees to obtain a perm
2. the borrower expects to find a perm loan elsewhere after construction for better terms
3. the developer is planning to sell the project upon completion 

In general, developers must first line up permanent (long-term) financing that will be used once the project is              complete and being operated with tenants before they can get a construction loan.  It is necessary that the construction loan is repaid when the permanent loan takes over.

What contingencies are commonly found in permanent or take-out loan commitments?  Why are they used?  What   happens if they are not met by the developer? x

Contingencies commonly found in permanent or take-out loan commitments include: 

1) a maximum amount of time to obtain a construction loan commitment

2) a date for completion of construction,

3) minimum rent-up (leasing) requirements and an approval of major leases

4) an expiration date of the permanent loan commitment and any provisions for extensions, and

5) an approval by the permanent lender of design changes and substitution of any building materials. 

The tri-party buy-sell agreement goes beyond the assignment of the take-out commitment and provides that the permanent lender will notify the interim lender that the take-out commitment is in full effect, that the permanent lender will indicate whether all necessary plans and documents have been reviewed and approved prior to closing the construction loan, and that the permanent lender will provide the construction lender with notice of any violations in the terms of the loan commitment by the developer and the time available to cure such a violation.

In the absence of either assignment of the take-out commitment or a triparty buy-sell agreement, the construction lender has no way to force the developer to close on the permanent loan and repay the construction loan.