Virtually all local government jurisdictions in the United States follow a development code when evaluating a proposed development application (Houston, Texas is a notable exception, along with rural townships dominated by traditional agricultural uses). Rather than follow the dictates of their respective development codes, however, a growing number of jurisdictions compel that some types of land use applications follow a planned development approach, backed up by a development contract.
This planned development approach may offer helpful flexibility to the project applicant. It can also be a time-consuming and expensive process that yields no better outcome than would be realized by traditional zoning and subdivision regulations. Moreover, many of these jurisdictions use the development contract to extract concessions from the applicant that would not otherwise be permissible under a straightforward application of their rules.
I often see development contracts used to compel dedication of oversized rights-of-way, payment of questionable fees and even to impose conditions unrelated to the actual project being proposed. Inasmuch as the development contract typically is provided to the applicant toward the end of the review process, the applicant is left with little time to review or seek the advice of counsel and often has no choice but to accept the document as-is or risk losing their project. This, of course, is exactly the outcome that these jurisdictions expect. I often get calls from clients who are upset about the process cities use with development contracts. Unfortunately, once the contract is signed and recorded, it is too late to do anything to remedy it.
I strongly encourage my clients to seek a clear understanding at the earliest opportunity of the anticipated conditions of approval likely to be recommended by the planning staff, including the terms of any development contract and any extraneous fees or other impacts. Some cities cooperate and some don’t. The unfortunate outcome of this approach by cities is to generate more distrust and animosity from project proponents, who otherwise are held to very strict standards as a condition of project approval. That’s fine when the conditions are known in advance and the applicant can make an informed decision about whether to pursue a project or to abandon it as too expensive or burdensome. But to use the planned development process, coupled with a development contract to trap the unwary is simply unfair.