Seeking particular information for a Chinese-owned development company that plans to open a subsidiary in the United States. We plan to develop a commercial mixed-use property in Southern California.
Answers
We advise people on this on a project by project basis because zoning is location specific in the US.
You need to have competent help, both nationally and locally. In addition to any federal issues (possibly environmental or CIFIUS), and state, each locality has specific rules. You need to determine whether the project you want to develop is of right; if not you need advice as to how to best proceed. There are specific requirements regarding landmarks, land near the coast and specific issues for different types of real estate. Development of new projects may require work regarding transportation, access, parking, for example. You need to understand how the new tax rules can be used for your benefit; the specifics of each locality and how to best set up your subsidiary. That will require bringing on qualified advisors.
Planning and zoning involve a lengthy process in the US and each state has its own rules and regulations. California is said to have the most stringent and complicated process in terms of planning and zoning so we normally would suggest Chinese investors as a newcomer shall take on developments that have already entitlement in place in order to avoid potential risks associated with the planning process.
Understanding “as of right” development rights and possible variances or zoning changes to allow increased density or changes in permitted uses are critical to successful development in the US as well as avoiding costly and embarrassing mistakes. The difficulty is that zoning and land use requirements can vary dramatically by jurisdiction and often, only local land use experts in the applicable jurisdiction can advise on what can be developed “as of right” or what variances may be obtained and what the timing and process for that would be. For a ground-up development project in SoCal, the first thing you should do is obtain high-quality land use expertise to inform what the rights and options are. Our firm does have that expertise in Southern California, should that be required.