The Art of Land Realty

April 15, 2011, Kansas City Business Journal

By Kevin Tubbesing, SIOR, CCIM, ALC

Nowhere in real estate does the confluence of tax incentives, capital financing, architecture, governmental influence, engineering, utilities, stormwater runoff, and grandma’s third-cousin-once-removed-co-trustee-still-on-the-deed, come into play more than in land transactions. Land use matters also bring to the table the evil twin of emotions and governmental politics/policies much more often than with improved property transactions. As dirt simple as some may think the business of land realty is, in truth, it’s an art.

The Kansas City region will likely see more infill development over the next few years slowing our expansive push out from the city core. The specter of $4 gasoline and the devaluation of infill land in the past three years makes land closer to the core and redevelopment sites more attractive. Moreover, as we have moved further out the available land in the concentric circles of our expansion has opened many areas that are available to be backfilled. 

Government policies and quasi-governmental utility structures are weighing in heavily. Provisions of the Clean Water Act now in force are making continued extension of municipal stormwater collection systems prohibitively expensive. Extensions of essential wastewater networks are more most effective closer to the treatment plants. Due to this fact, rougher terrain that was previously bypassed will be reevaluated instead of pushing further from sanitary central operations.

Local governmental planning staffs realize that greater density is necessary in their new community plans. In many cities, new zoning districts are being formed to accommodate mixed residential density. Independent from these conversations between developers, planners, and community leaders education of the public as to the need for these changes is needed.

Emotional and often negative public reactions to long-vacant land adjacent to residential neighborhoods, or the redevelopment of older buildings that have long outlived their useful lifespan, continues to impede investment. The effect of these uninformed reactions is the continued suppression of property values and the loss of jobs that would have otherwise been created by this economical activity. Political governing bodies are being unnecessarily exposed to public outcry as they try to bring necessary change for the betterment of their community and their empty treasuries.

The professional development community, in conjunction with local government, must work with media outlets and municipal and county publications to better inform the public as to the purpose and benefit of infill development. Overland Park’s “Vision Metcalf” conversation with the community is a positive example of a well-paced conversation with corridor neighborhoods and businesses as to the changes and benefits of a denser model. Overland Park’s use of multiple meetings, well-thought-out publication, traditional delivery and use of the web to disseminate, and exposure on local television demonstrates respect for the community as they absorb new ways of thinking about where they live.

Managing these complexities is what I call the “Art of Land Realty.” There are many issues that are simply settled matters and rarely change on improved properties. The availability of specific utilities, where the water runs when it rains, and more mundane things like the size of the building and number of parking stalls. Local politicians are rarely required to debate change of use for a building or zoning and other police powers of local government rarely change a building’s use, size, and number of occupants.

For those that practice the Art, there is rarely a more important sector than how we interface with the political and staff personalities of governing bodies. The relationships we build with them define an essential role for our clients and our community. It is the role of land brokers to explain the intent and use for a development tract while providing honest feedback to questions regarding concerns of the public. As they say - change is never easy - but it will always occur and informed governing bodies can better explain changes and ease concerns. 

As our slow but steady recovery continues, The Land Source saw the market bottom for land the beginning of Q4 2010. Offers are now flowing. In the last quarter half of our closings included bank financing - yes, for land! Top-quality developed sites are reaching strong occupancies and the thirst for raw land development is in the air. When you start your search for choice dirt, remember to seek the assistance of those the practice the Art of Land Realty.

Read next article: Making the World a Better Place is Goal of Humanitarian Honoree