Publicly bid development projects

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Courtesy of ENVIROBIDNET.com

Most think developers make their money by taking huge risks. Developers must traverse a minefield of potential obstacles before ever putting a shovel to the earth. These obstacles vary from city to city, state to state, and throughout the country. From conservation, archeological, historical, zoning, planning, and environmental hurdles, to local public opposition and the overall health of the economy, one false step, one detail missed, and millions of dollars are down the drain. Some turn to public-private developments to help traverse these dangers. Every day municipalities, counties, or states offer bids for revitalization or new developments to developers.

What makes these projects appealing to many developers is multi-faceted. First of all, the projects have a scope or basic outline drawn at no cost to the developer. Most often when a municipality offers a bid for development or revitalization, the potential local stumbling blocks- such as zoning, historical, public opposition, et cetera-have been removed. The offerer acts as a proponent rather than an opponent of the project, allowing for smooth permitting. Most of the high costs of 'warfare' at board meeting after board meeting are removed. While there may remain some local opposition, the developer can usually find a smiling face upon entering a municipal office, as he or she is treated as a partner, not a pariah.

Furthermore, because such projects have been bantered about for some time prior to the bid offering, and there has been a great deal of media coverage upon accepting a developer bid, a portion of the marketing for the project has already been done. Also many such projects allow for state or federal funding and/or extremely friendly financing. In most instances, profit margins are virtually assured and risks greatly reduced. These factors and more are extremely attractive to those who participate.

Of course one would be naive to assume that projects put out to bid by public entities to be trouble free. There are always detractors who would throw obstacles in front of any project they disapprove of. Also the economy can raise its ugly head and hurt any project - be it private or public. Additionally, these types of projects usually have lower profit margins (although most contracts contain an escalation clause), and there is more oversight as to time of completion. Other factors may also play a role, but overall the benefits seem to outpace the negatives.

Some do not participate in the public sector as they may feel these projects take away their independence and creativity. Others I believe are simply not aware of the potential of the many and varied projects offered nationwide. At a time of, shall we say, a cautious building climate, it may be wise to take a closer look at these offerings.

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