Commercial Property Case Study

Basic Equipment & Supplies Warehouse – Port Richmond, Philadelphia

Problem: Warehouse and cleaning supply business owner needs more room for inventory and wants to take advantage of the adjacent residential development growth. Owner believes that the value of his property has increased to the point where it might be profitable to sell and move his business.

Solution: Surveyed the area physically as well as legally and politically as to the new developments in the Port Richmond section of Philadelphia. After research, reported to the owner that with his okay, Eckstut Consulting could reach out to potential users of his property (approximately 1 acre of early 20th century warehouse). At the present area residential construction economic and development activity, the one acre property could sell for close to $2 million - if the right buyer was found.

Eckstut Consulting found the "right buyer" who, after negotiations, came to an agreement of $1.9 million purchase of the property - with a zoning contingency.

Eckstut advised and assisted in the negotiations of monies and to follow the zoning contingency process.

Outcome: After the lengthy process necessary for such a large deal that includes significant zoning variances, (about one year) the Lapinson Warehouse property that was purchased less than 12 years previously for under $200,000 was sold for $1.9 million.

Lapinson Cleaning Supplies bought and moved to a warehouse property 3x the size less than a mile away for under $750,000.

The business owner purchased a summer home in Ventnor, NJ.

MAPLE-CHAPEL RETAIL/BANK DEVELOPMENT ON VACANT GAS STATION AND NEARBY PROPERTIES.

Problem:

Identified an upcoming RFP being issued by the boro of Merchantville, NJ which included a former gas station and large home – that has a very good location and excellent visibility.

• The property was too small for a significant development and the parking necessary for its success and approval.
• Identified the property adjacent as being available for purchase and would be large enough to complete a parcel that would make the tract viable for a bank tenant with an additional two retail tenants.
• Properties would need to be knocked down and a new building would be constructed.
• Old (empty) dentist office and vacated senior citizen home (unsafe for habitation) were old and might have historic significance in a community that cares for and protects its history.
• Brownfield - Former Shell gas station - ascertain status

Solution:

• Find a Developer for the property.
• Responded to the RFP with a proposal that would include the acquired property as part of the “redevelopment zone.”
• Put the adjacent property under purchase agreement with the contingent of acceptance of the RFP.
• Find a major tenant to make the investment viable for the Developer.
• Complete environmental clean-up and get state approvals.
• Work with municipal (rules, regulations, development program, historic commission,etc.), County (county roads, rules and regulations), State (environmental clean-up) officials, community, concerned citizens, and neighbors

Outcome:

• Found and assisted Developer in process of acquisition of properties.
• Borough approved the RFP
• Tax abatements
• Found and signed the major bank tenant, PNC.
• Got the environmental closure and approval necessary from the state.
• Went through and got all necessary approvals to begin construction.
• To be completed and occupied by winter 2008-09
• Developers looking to do other new bank development

Noah's Ark

Problem:

In the year 2008, the Lord came unto Noah who was now living in the United States, and said, "Once again the earth has become wicked and over-populated, and I see the end of all flesh before me. Build another ark and save two of every living thing along with a few good humans."

He gave Noah the blueprints, saying, "You have six months to build the ark before I will start the unending rain for 40 days and 40 nights."

Six months later, the Lord looked down and saw Noah weeping in his yard, but no ark. "Noah." he roared. "I'm about to start the rain! Where's the ark?"

"Forgive me Lord," begged Noah, "but things have changed. I needed a building permit. I've been arguing with the inspector about the need for a sprinkler system. My neighbors claim that I've violated the neighborhood zoning laws by building the ark in my yard and exceeding the height limitations. We had to go to the Development Appeal Board for a decision.

Then the Department of Transportation demanded a bond be posted for the future costs of moving power lines and other overhead obstructions, to clear the passage for the ark's move to the sea. I told them that the sea would be coming to us, but they would hear nothing of it.

Getting the wood was another problem. There's a ban on cutting local trees in order to save the spotted owl. I tried to convince the environmentalists that I needed the wood to save the owls - but no go!

When I started gathering animals, an animal rights group sued me. They insisted that I was confining wild animals against their will. They argued the accomodation was going to be too restrictive, and it was cruel and inhumane to put so many animals in a confined space.

Then the EPA ruled that I couldn't build the ark until they've conducted an environmental impact study on your proposed flooding.

I'm still trying to resolve a complaint with the Human Rights Commission on how many minorities I'm supposed to hire for my building crew. Immigration and Naturalization is checking the green card status of most of the people who want to work.

The trade unions say I can't use my sons. They insist I have to hire only union workers with ark building experience.

To make matters worse, the IRS seized all my assets, claiming I'm trying to leave the country illegally with endangered species.

So, forgive me, Lord, but it will take at least 10 years for me to finish this ark."

Suddenly the skies cleared, the sun began to shine, and a rainbow stretched across the sky. Noah looked up in wonder and asked, "You mean you're not going to destroy the world?"

"No," said the Lord. "The government beat me to it. But you might want to get some help from Eckstut Consulting"

The real world of business development is full of unexpected obstacles too. Eckstut Consulting can help you prepare and succeed.