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Phased Development: Considerations for Developers

Phased development often makes better business sense for certain kinds of residential and commercial properties. There are several planning and practical considerations that developers should make when it comes to phased projects.

  • Determine whether a comprehensive, phased project or several, discrete projects are better suited for the property and development budgets. However, some zoning codes may not allow for a choice depending on the nature of the project.
  • If an unfavorable change is expected in the zoning bylaw or ordinance that will diminish the overall development potential of the property-such as a change in dimensional requirements or uses allowed by special permit-it may be advisable to secure all necessary special permits and building permits before publication of notice of the proposed changes (though, once approved, projects must still commence in accordance with all applicable deadlines as discussed below). On the other hand, if a proposed zoning amendment is more favorable to property development, then waiting for the amendment may be more lucrative for developers.
  • Depending on the type of project and/or the zoning district where the property is located, submission of comprehensive or master site plans or other information may be required for approval of phased developments. For example, the Kingston Zoning By-Law requires that if land being developed for small wind energy system projects will be undertaken in phases, then a comprehensive plan for the entire property must be submitted showing intended future development. In Plymouth, planned unit developments are subject to very specific and detailed phasing and submission requirements under the Plymouth Zoning Bylaw. A careful and preliminary review of the relevant zoning code in conjunction with proposed plans is essential in order to avoid running afoul of the permitting process and incurring unnecessary engineering costs.
  • Developers of phased projects must pay attention to deadlines for commencement and completion of projects as required by zoning and subdivision laws and regulations. For example, the local zoning ordinance or bylaw will set forth the timeframe for when special permits will lapse, and in many cases the special permit decision itself will set forth very specific development conditions and deadlines that, if ignored, can result in the need to file for an extension or a lapse of the permits altogether. This is because M.G.L. c. 40A, § 9, requires that

Zoning ordinances or by-laws shall provide that a special permit granted under this section shall lapse within a specified period of time, not more than two years, which shall not include such time required to pursue or await the determination of an appeal referred to in section seventeen, from the grant thereof, if a substantial use thereof has not sooner commenced except for good cause or, in the case of permit for construction, if construction has not begun by such date except for good cause.

For phased development, so long as at least the first phase has commenced within the applicable timeframe under the local zoning code, then the remaining phases can commence at later dates. See Lobisser Bldg. Corp. v. Planning Bd. of Bellingham, 454 Mass. 123 (2009). However, developers should understand that any protracted delays in construction may result in later unconstructed phases being forced to conform with any changes in the zoning code since the permits were issued. See id. at n.12 and M.G.L. c. 40A, § 6.

  • Many condominiums (M.G.L. c. 183A) are developed as phased projects. For projects that will be converted to condominium ownership before completion of all phases, developers must ensure that all relevant instruments, including the Master Deed, By-Laws and amendments thereto, provide for and allow phased development. These instruments must carefully state in what manner phased development can proceed (if at all), and what authority is required for such phases to occur (i.e. by declarant, by vote of condominium association, etc.).
  • If various portions of the land will be sold or leased during the progression of the various phases, developers must account for all attendant rights thereto, including easements, access, and/or ownership of ways, before land is sold or leased. The developer not only needs to account for these rights on behalf of grantees/lessees, but also to reserve any necessary rights for himself.

Although phased development can be complex in its considerations, it does not need to be complicated. Working with skilled counsel, developers can ensure that development and the sale/lease of the property advances without incident.

Written by Kristen M. Ploetz, Blog Editor

Copyright (c) 2011-2012 by Jeffrey T. Angley, P.C. All rights reserved.

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