A land development agreement is an agreement between a developer and public agencies, such as a city or a county, regarding the terms related to a development project as well as continuing rights to develop the project. Negotiating land development agreements can be both time consuming and expensive because these agreements are complex and also typically require extensive negotiating with the public agency, e.g., a City or County, charged with the development application review and approval.  There are development projects where it makes sense for all parties involved to not incur the time and expense of negotiating a development agreement.  However, land development agreements can be very useful for the developer where the development project is large, requiring long-term development phasing, and requires the developer to make a substantial initial investment in the infrastructure, e.g., sewer, utilities, curbs, roads, etc., of the development.

Amongst other things, development agreements will layout the intent of the parties regarding the development as well as performance requirements and sequential steps in the development process well before any one party makes a substantial investment into the development itself.  From the developer’s perspective, with a development agreement in place they can justify their investment into the development knowing that they are guaranteed the right to complete the entire development project under the agreed upon, often favorable, terms.  From the public agency perspective, with a development agreement in place it knows that certain required infrastructure will be done and in accordance with the public agency’s general and specific development plan.

There can also be negative aspects to putting in place a development agreement. An example of this from the developer’s perspective is that they may not want to risk opening up the project to close scrutiny and examination by the public agency and the public in general.  The reason is that opening up the project in this manner may lead to not only higher development fees and costs (above those that would legally be required  without a development agreement) but may also subject the development to general public ridicule, disapproval, and condemnation.  Similarly, but from the public agency’s perspective, it may not be in the public agency’s best interest to bargain in development agreement negotiations locking in zoning and other entitlements.

When making a determination as to whether a development would be in developer’s best interest, consider the above mentioned items in addition to the full scope of the project, the developer’s legal and equitable interest in the land subject to development, and whether or not the government agency is receptive to a development agreement.  Ultimately, development agreements are very complicated multi-party agreements.  Anyone considering developing land should contact the Chilina Law Firm or another law firm focusing on California land use and development law for legal advice on the advisability of a development agreement given the nature of the specific development project.

Authored by Karen Chilina and Co-Authored by Greg Chilina

Chilina Law Firm, a Professional Corporation, is a full-service estate planning, probate, trust administration, business law, and real property law firm that provides a wide-range of advising, transactional, and litigation services to its clients from its office located in Atascadero, California. The firm’s attorneys represent individuals and business entities in an assortment of transactional and litigation matters involving estate planning (including trusts, wills, powers of attorney, and medical directives), probate, trust administration, as well as general business law, contracts, corporate governance, land use, and real property. Chilina Law can be contacted by telephone at (805) 538-5038 or by email at info@chilinalaw.comor visit the Chilina Law Firm at www.chilinalaw.com. Chilina Law Firm is based in Atascadero, California and serves North San Luis Obispo County communities, including Santa Margarita, Atascadero, Templeton, Paso Robles, and San Miguel.

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