All You Need is Cash
by Marc DeSouza


What are you willing to do to obtain a piece of ground? How long are you willing to wait to build? How much are you willing to risk? Are you ready to put your money where your mouth is? If you can’t answer these questions, then land development is definitely not for you. It’s getting tougher every year. More and more builders, even the “big boys,” have gotten out of the field and are choosing to just buy fully approved lots in subdivisions. Here is a perfect reason why.

We began working on the development of a 245 acre parcel in South Hanover Township, Dauphin County, Penn., over ten years before we were able to break ground. The parcel had an approved preliminary plan for almost 1,000 housing units, plus commercial ground. We negotiated a purchase price with the seller only to be told that they had pledged it as additional security on another project. That project went “belly up” within 90 days. We had to wait for two years until the bankruptcy proceedings and Sheriff’s Sale took place. We entered into an agreement with the lender and went to the township to renew the approved plan. We were told they did not want to. The bank got cold feet and made us “an offer we couldn’t refuse.” We were able to buy the property, with no contingencies, at what seemed at the time to be a favorable price. Boy, had we underestimated the costs that were ultimately involved!

We went back to the township with the same plan, but after a few months of meetings and addressing their concerns we were turned down. The township tried to change the zoning on the property, so we quickly submitted a new plan which addressed the viable concerns they had expressed in the first denial. We were able to “beat the clock” and have them review this new plan. This plan was also turned down. We immediately appealed this decision to the Lower Court. It took over two years before the case was adjudicated in our favor. The township appealed this decision and after another two years, Commonwealth Court found in the township’s favor. The decision was interesting in that it found in the township’s favor on only one of thirteen points raised. We thought this could prove favorable in our case, so we appealed the decision to the State Supreme Court. After another two years, they reversed the Commonwealth Court’s decision in our favor.

We went to the township and began negotiating a Development Agreement that would set out specifics of the development to take place. This took over another year to put in place. At the same time, we were negotiating with PennDot concerning our Highway Occupancy Permits. This was all finalized when we posted financial security to pay for the required improvements.

At this point we have broken ground, sold two parcels for the construction of 74 single family homes, another parcel for 7 executive golf course view lots, 124 luxury townhomes for sale are under construction, and are building and leasing 206 luxury apartments and townhomes for rent. We have an agreement for a 16.5 acre commercial parcel with a major user and are in negotiation for two commercial pad sites. Another 74 single family home sites are under agreement as well and we still have land which is approved for an additional 376 dwelling units.


And all it cost us was ten years of carrying costs, paying interest, taxes, insurance, our own staff of professionals working on the project, extensive legal and engineering fees, paying for and constructing a major sewer pump station, taking responsibility to undertake a major upgrading of an existing pump station, donating eleven acres of land ready for three baseball fields and parking for 100 cars, installing two traffic signals off-site and two more signals on-site plus associated road improvements to Rt. 39.... Yes, we put our money where our mouth is... we just didn’t think it would ever take that much of it.

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