Time factor of mixed use development

It was a simple question overheard at an event recently: How much longer does a mixed use project take to develop? Well, maybe one day if we can write a book, there will undoubtedly be a chapter devoted to the time cost of including commercial space in our buildings. We have a rule of thumb at Milhaus for project timeframes that vary depending upon the size of the project, the role of neighborhood groups and government approvals, design complexity, construction method, and even the weather. From contract signing to starting construction, it varies from 8 months to 24 months depending on many factors.

To understand development of mixed use and urban-infill properties, one must first understand that signing a contract to buy a property for development has only earned you the right to spend lots of money and risk lots of time and even more money. You've basically bought the right to promote a vision for changing something. That “something” can be a building, a city block, a vacant parcel, etc. Whatever it is, there are many other ideas for how it should be developed that are contrary to yours. Moreover, there are many other people that have some “ownership” of that something like you do. There are neighbors, customers, concerned citizens, and advocates of preservation that all have a voice in our business. It takes time to build trust and relationships with each of these stakeholders. It takes time to design and redesign a building to respond to reasonable concerns. It takes time to navigate the myriad neighborhood meetings, city entitlement processes, and bring the project team members along the way.

Mixing the uses takes time to explain why you are doing it, how it will work, and why it will be successful. It increases the complexity of approvals, design, and financing that just takes more of everything to get it done. Depending on the other factors at play, just adding commercial space to a residential building can add 25%-50% more time to your schedule to reach construction. Of course, this extra time has a cost and it needs to be measured against other goals and objectives of the project and the company. Is it worth it? Well, sometimes the value of mixing uses in the project cannot be measured in dollars and cents. We'll leave that thought for another day.