Do-it-yourself approach can defeat business expansion plans

Large corporations routinely hire commercial brokers, engineering firms and legal counsel to guide their future expansion plans. However, although smaller local businesses are often proficient in locating “space” to accommodate their expansion, they often overlook or take a do-it-yourself approach to navigating the local permitting process and fail to properly analyze local land use restrictions and allocate sufficient time and resources to this effort.

Unfortunately, this can lead to serious delays, cost overruns and sometimes the demise of the project. For this reason, proper due diligence and expert assistance cannot be overemphasized.

Whether a tenant or owner-occupant, an expanding business must consider whether growth in place is possible as well as whether additional space is available. Owner-occupants can often expand more independently, while tenant-occupants must secure landlord cooperation.

Prior to improving real estate, the owner or landlord must analyze whether it makes long-term economic sense. In either case, proposed expansion more often than not requires local land use approvals and typically requires assistance from a number of professionals.

At the outset of a business expansion, consultation with municipal officials is essential. Unfortunately, many small-business owners perceive local officials as opposed to growth, but it is important to remember that municipal officials are charged with protecting the public’s health, safety and welfare by controlling land use through regulation. Small-business owners are often surprised to learn that zoning ordinances, subdivision and site plan regulations apply to business expansions as well as real estate developers.

Most zoning ordinances in New Hampshire are permissive (unless a use is expressly permitted, it is prohibited), which means they are often silent regarding more modern uses of property. For this reason, when a business expands or proposes a more modern use of land not expressly permitted by the local ordinance, this complicates the local permitting process further and often requires a visit to the local zoning board of adjustment for a variance or special exception.

It is important to know that variance relief has become increasingly complex since the New Hampshire Supreme Court adopted its mandatory appeal process, which has prompted a number of new opinions.

Further complications also can arise relative to signs, parking and the vested rights enjoyed by non-conforming uses.

Physical expansions and relocations more often than not require at least one public hearing before a municipal land use board. During these hearings, the business owner often encounters abutter opposition, environmental concerns, traffic objections and sometimes a detailed discussion of modern equipment being used on the subject property, which business owners often perceive as opposition.

Making matters more difficult, board members, who are generally volunteers with limited technical experience, rely heavily on professional consultants retained at the business owner’s expense to examine the proposal in detail.

In addition, board members often have limited time to review the applicant’s submission prior to the hearing. For this reason, a properly prepared presentation during the public hearing is essential as is the availability of the necessary consultant during the hearing.

While public participation is intended to aid the process, this also can cause delays and increase expenses. This is particularly true when the business is a legally existing non-conforming use, which can sometimes generate a ground swell of support but more often produces a rash of complaints. For this reason, the vested rights of non-conforming uses should be carefully analyzed prior to any plans to expand to confirm growth in place is both possible and probable, in light of the surprises that often arise during the land use approval process.

Careful early planning is key to a successful business expansion or relocation, particularly when a tour of the local land use process is required. Early and complete preparation, while sometimes a significant cash outlay, more often than not makes it more likely that the owner is better informed, that his or her expectations are realistic, and increases the project’s successful completion on time and reasonably within the budget.

Patricia M. Panciocco, a member of Wiggin & Nourie’s Real Estate, Land Use & Development Group, has spent nearly 20 years in the real estate business as a licensed broker in Massachusetts and New Hampshire, in addition to conducting feasibility studies on land acquisitions for her family’s building and land development company.