The Selva Approach
At the beginning of real estate development, there’s a kind of chaos, a darkness of uncertainty. You may have only a vague idea where you’re going, or what your project may look like.
There may be little or no vision or narrative to it, you may have only an inkling about the physical, economic, or political issues surrounding a property. And who knows what the community really thinks?
If you start without figuring out these issues, the chaos intensifies, gets more complicated and risky.
Our job is to bring order to that chaos through rigorous, efficient and thorough due diligence. We educate clients and partners throughout the entire process so they, too, have the clarity to make good decisions.
14 Lessons Learned and Principles Applied
Out of the crucible of experience, we’ve learned lessons that inform our work and benefit our clients and colleagues.
Think Multi-Dimensionally and Systematically
A multi-dimensional, dot-connecting approach is necessary—systems thinking meets design thinking. Linear, mono-dimensional spread-sheet-only-based thinking is high risk. The nature of the land itself must be put in context of the regulatory, social and political environment. Ignoring the system view leads to inadequate due diligence and misplaced expectations. Use the spreadsheets, but don’t be blinded by them.
Turn Constraints into Opportunities
Opportunities can pose as constraints. Constraints can pose as opportunities. Real constraints can become breakthrough-producing opportunities. The ability to discern the difference is an art gained through creativity, experience and diligence. The overriding attitude must be how to turn constraints into opportunities by looking at a challenge from a different perspective. At very least, minimize the negative impact of real constraints. This is vital to success with challenging lands.
Create Vision and Narratives
To be successful, every project must have a clear design vision and narrative at the outset, along with strong and realistic financial structure. Vision and narrative guide the team implementing the project design and entitlement and keep it coherent over time. Compelling visions and narratives are also the means to building community and decision-maker support. Visual storytelling, pictures and process are your friends.
Know What You Want and Communicate the Vision
Simply asking the community with which you are engaged what they want can be dangerous. First, because they may not know what they want and second, they may not want anything, and third, they may have no imagination as to what could be. That’s why your vision and narrative are so important. After all, when Steve Jobs conceived the iPhone, there was no actual perception of market need. But once the market saw the vision, the device became essential and changed the world.
Keep it Simple
When a project reaches critical decision stage by an approving agency, one must be careful in negotiating conditions of approval to avoid agreeing to ones that are overly complex. Optimism based on complexity could simply be a disguised means for decision-makers to say “yes” when they actually mean “no.” Beware. It’s an old tactic to assure a project with such conditions could never be built.
Don’t be Stubborn at the Wrong Time
When you sincerely listen to stakeholders and look for a win-win combination that addresses stakeholder reasonable needs early on, your chances of success can be increased while achieving a reduction in time it takes to get there. Your reputation of trust will be enhanced for future opportunities.
Talk to the “Neighbors”
Many developers design their project before ascertaining what the community in which they work and the people who will decide upon project are thinking. It’s very dangerous not to reach out to the community early on. Often, people just want to be heard. If they feel that they have not been heard or a fearful of the unknown, they usually oppose. Create a pride of authorship among many. Be generous if you can. You are creating a community, not just a product.
Pay Attention to Early Warning Signs
If you know what you’re looking at, the “death rattle” of a defective project can often be detected early on. This allows for early exit (or never entering in the first place) rather than becoming trapped in a financial and procedural morass. With four decades of experience, Selva has learned to identify the warning signs.
Relationships of Trust Are Everything
In the regulatory environment, along with technical skills, the key to success is building relationships of trust and friendship even in adversarial circumstances. Your adversary need not become your enemy. Trust but verify.
Talk to the “Neighbors”
Many developers design their project before ascertaining what the community in which they work and the people who will decide upon project are thinking. It’s very dangerous not to reach out to the community early on. Often, people just want to be heard. If they feel that they have not been heard or a fearful of the unknown, they usually oppose. Create a pride of authorship among many. Be generous if you can. You are creating a community, not just a product.
Avoid Procedural or Financial Shortcuts While Charting an Efficient Path Forward
Sometimes, it seems prudent to try to shortcut the regulatory process particularly with regard to land use regulations. This usually leads to problems at the back end where adversaries seek to find the weak spots in the entitlement processing in the courts, leading to high costs and long delays. Therefore, to develop the most cost-effective process, it is important to engage the best experts in this realm to be part of your team. Selva has been working with such experts for decades.
Political Capital is Everything
Having a strategy to address public policy and political engagement is critically important to the success of challenging projects. This means engaging with both political decision-makers and political non-decision-makers at various levels of the political spectrum, related or unrelated to a particular project. Do this in advance of any project application; or, better even before any project property acquisition. No amount of lobbying can substitute for the gravitas of a strategically and physically well-designed project.
Beware of Parallel Entitlement
Sometimes a project proponent may want to push all of the steps leading to a development in parallel, as opposed to sequentially. While this can be helpful at times, the pitfall is that if a change occurs at one level of the planning process, it ripples through all the others and creates complexity and can generate major costs to adjust all the other pieces. So more often than not, it is best to take the process in discrete steps, from the general to the specific.