alt Hacker NewsWhat is the actual procedure through which this happens? You buy the land and then are granted permission on a discretionary basis? It seems to me that if you were a small business this becomes much harder to participate in because you need to acquire and hold the unproductive asset.
This would mean that land use tends towards that which large firms (which can sustain the costs easily by self-financing) find useful.
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A comment on HN a few years ago in a thread about car washes brought this to light a little bit for me, the proliferation of subscription car washes everywhere in the US (self storage too) seems like it can't possibly make sense financially, but when you think about developers that also want to speculate on the land, car washes and self storage are about as easy as it gets to develop and maintain some cashflow, then you can sell or redevelop later. Now I am expecting a spinoff to Mister Inference and Quick Flops as these sprawling networks of carwashes turn into data centers in 2030
Here in Orlando two large builders bought about 90% of downtowns empty lots (and several older buildings) promising new high rises in 2022, then threw in the towel after evicting all the tenants and now most of Church street station is completely empty. Of course local government had put nothing in the agreement about time frame of completion, what happens if the builder gives up, etc.
So now, all of it sits abandoned, no construction started, and now its not even worth building as they claim "down town is dead".
This is likely the fate of that land, a write off until its so valuable they can sell it to someone else.
I’ve had multiple friends try to start businesses that got stuck on this: You can’t really get permits until you have the property and start drawing up plans.
For simple businesses like a retail store in a location that has other retail it’s not too risky to bet that you’ll be approved, too.
For businesses with unique needs or that happen to be in the public crosshairs, you’re putting a lot at risk in the process.
The process favors big companies and developers who have established relationships and “connections” with the planning boards.
The situation is even wilder in some other countries, both more and less corrupt than the average US municipality. In some places you’re not getting a permit at all without a sizable bribe, or having an in with the planning board.
In my city one of the aspiring developers tried to run an expensive political campaign to get a family member into an office that could have helped with their approvals. People caught on and didn’t like it one iota.
Depending on things, you might enter a land purchase (or lease) contract that's contingent on issuance of a building permit.
But a seller would probably prefer to sell without contingency, so what terms are available depends on market conditions.
Title insurance for residential real estate may sometimes cover properties that are unbuildable due to unsatisfiable permit requirements.
All told, it's easier as a buyer if you purchase an existing structure that was built under permits and is currently in use under appropriate occupancy permits.
From what I can tell Microsoft hasn't purchased the land yet. It's apparently owned by WE energies as part of the power plant next door.
Zoning laws. Many parts of the US but not all have land use zoning. The zoning for any property you buy is public record, so any business knows well in advance of what they are buying. If you want to deviate from the zoning you have to submit an application for that zoning variance which requires usually a community hearing.
Neither small or large businesses really have any big advantages here. Got to win over the community. If anything, the small business may be local and the operators more readily able to convince the community for a variance than some corporate lawyer.
My employer went through a similar process, not for a data center but for a large recycling yard/center. We had to buy the land first, and it was basically unproductive for 2.5 years of mostly waiting for permits, and it was already zoned industrial so no zoning changes were needed.
The whole project was several million in expenses before even making a dollar. We aren't huge either, the permitting was not supposed to take that long it but a real strain on the business.
So yeah, you're correct. The current process favors large firms, at least those large enough to absorb the cost for multiple years or however long permitting takes, which in some municipalities can be a very, very long time.