Self-Storage Developers Face New Costs And Issues

New self-storage facility developers have generally had luck moving their projects from the industrial and warehouse zones areas of many cities, but that doesn’t mean they’re not facing challenges from neighbors and municipalities.

“Developers are now wanting to get into areas with more barriers to self-storage,” says Jeffrey S. Dallenbach, AIA and managing partner of ARCHCON Architecture in San Antonio, Texas. Dallenbach estimates that 25 percent of the self-storage projects they work on now have some type of zoning or objection hurdle to jump through, which is up from 10 percent in the past.

The types of objections vary from the old argument of the “rusty metal building” aesthetics to noise concerns to height and color of the facility.

While most cities now realize that modern storage facilities are built to resemble more of an upscale office or retail building and have become more educated about self-storage, neighbors and organized homeowner associations (HOAs) may be the more likely opponents. “The HOAs are looking for synergistic retail, and they aren’t thinking about self-storage,” says Tony Ardizzone, CEO of Monolith Self Storage Investments and Development in Scottsdale, Ariz.

Whatever the reason for the initial opposition, many successful developers say that with good communication, planning, and design most projects are ultimately approved.

Winding Through The Process

Every county and municipality is different, of course, but, generally, after having initial discussions with planning and zoning and creating your design and/or rendering, the next step is presenting to the planning and zoning department. The staff will then review your plan, take it to the neighbors, and either make recommendations for changes or take it to the city council or commission (which typically never happens without some recommendations for change).

If your project involves a conditional use or special use permit or a zoning change, be prepared for a four- to eight-month process. No matter what the process is in the municipality you’re seeking to build in, Ardizzone says that you need to completely understand everything that’s involved. “If it’s your first time, I would suggest getting some help,” suggests Ardizzone. “If not, then you need to understand the process enough to streamline it to your advantage.”

Not doing so could cost you valuable time and money in the long run. “It’s just critical that the developer goes in knowing they will have to spend a lot of money and some heartache to get through the entitlement process,” says Tarik Williams, vice president of TLW Construction in Gilbert, Ariz.

More often than not, it’s the neighbors who have some objection to the project, holding it up. On one of Ardizzone’s projects, the neighbors objected to outside roll-up doors; they felt it would create too much noise. “We know with modern roll-up doors this isn’t true,” says Ardizzone. “We even had engineering and noise studies, but they still weren’t convinced; so we put all of the doors on the inside of the facility.”

Communication from the beginning is key, says Bruce Jordan, IAI and president of Jordan Architects in San Clemente, Calif. After filing the application, Jordan says he meets with the mayor and some, if not all, of the members of the city council to show them the designs and renderings. “Once we elicit their comments and answer their questions, we move on to meeting with the neighbors,” he says.

Jordan states that prior to the initial hearing at the city, his development team invites the neighbors to a local restaurant back room or some other “friendly” meeting spot for coffee and dessert during a presentation. “We send a nice invitation letter out telling them about the information session and we show the renderings and ask questions,” says Jordan. “By offering to meet with the neighbors first, the opposition slowly dissolves away.”

Jordan says that if there is a specific HOA group in opposition, they typically will plan a separate meeting for them as well. He prefers to take the personal approach first and typically doesn’t hire an attorney to assist. “I don’t like to bring attorneys in; it just kind of adds a hard level,” says Jordan. “We’ve had very good success on the personal level.”

That tactic has worked very well for Jordan, who says he hasn’t had a project denial in six years. However, many developers also find there are benefits to hiring a local attorney, preferably one with some political clout.

Ardizzone says he typically will not begin negotiations with the city or even attend neighborhood meetings without a qualified, local zoning attorney. “I’ve done it both ways, on the personal level and by doing it on a personal level, sometimes personalities can become involved,” he says.

Ardizzone describes one such project right now; only the neighbors who are objecting aren’t residential neighbors but the owners of commercial office buildings on one side and a gas station on the other. Although their projects are mult-level, Ardizzone says they are opposing his project due to the size of the self-storage building as they are afraid the storage project will dwarf theirs. “It would be easy to get into it with them on a personal level, but it’s easier to have a middle person who can negotiate both of us giving a little. I believe a good project needs both good personal interaction with good attorney representation.”

Ardizzone adds that they typically always budget $30,000 to $40,000 for a zoning attorney. “You’re involved from the ownership side, you can always mitigate those costs by doing some of the work yourself,” advises Ardizzone, who says his method of hiring an attorney has been successful. “We’ve developed one million square foot in the last 18 months.”

Worth A Thousand Words

No matter how you deal with it, hiring an attorney or not, developers all agree that you can’t cut any corners when it comes to the drawing up the renderings. Many times, neighborhood objections come down to aesthetics of a project.

Dallenbach describes one of the projects that was just approved in Texas that involved neighbors in an upscale area objecting because they believed their views of vast amounts of Texas Oak Trees that overlook the rolling hills in the Texas Hill Country would be obscured. “We worked through many of their concerns, but the final hurdle was that of visibility,” says Dallenbach.

The project was finally approved, but not without renderings and plans that showed the height of the building compared to the trees and homes. “Our section also included sight lines from the homes which clearly indicated a minimal window of visibility of the project,” says Dallenbach.

A recent approved project for Jordan in Colorado involved a city that was “really picky about the colors”. “We worked with planning on the renderings on an earth-tone color scheme that worked,” Jordan says.

When drawing up the renderings, Ardizzone cautions not to leave out proposed landscaping. “When you’re talking about the development, you’re really talking about your vision and you need to convey that vision,” he says. “Go the step further and get the landscape architect to put in those touches to the rendering. Make sure walls, bushes, and all of the details are there.”

Gold At The Finish Line

Many projects developers see today have some type of zoning change tied to them, whether it be a special or conditional use permit (the project will be granted upon some special request such as adding an extra exit, removing windows that look onto a neighborhood, etc.) or a full zoning change.

The challenges in these projects may cost you some additional time and money, but remember that if the project is right, it will be worth it in the end. “If developers are successful in pushing through in these high barrier areas, the properties tend to command more rent and ultimately, better sale value,” says Williams.  

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Kerri Fivecoat-Campbell is a freelance journalist based in the Ozark Mountains. She is a regular contributor to MiniCo’s publications. Her business articles have also appeared in Entrepreneur, Aol.com, MSN.com, and The Kansas City Star.