A subdivision plan undone when the road standard changed mid review

The assumption doing the damage is the one you named at the end, that your exit comps were evidence about your approval. Sold three to four acre lots in that county were all lots that had already cleared review under the old standards. Their prices tell you what a finished lot is worth. They tell you nothing about the cost or probability of producing the next one, and when the production cost moves, the comp set does not move with it for months or years.

On keystone's question, whether pending applications are protected from a mid review ordinance change is a matter of state law and local ordinance, and it varies a lot. Some states have statutory vested rights that attach at a defined filing milestone, others leave it to common law reliance doctrines, and some ordinances contain their own grandfathering language with conditions attached. That is a question for a land use attorney licensed where the land sits, before you offer, not after.

The structural point for anyone underwriting these: the bulk to retail spread has to cover subdivision cost, carry, and the chance that subdivision cost is wrong by a wide margin. You budgeted $260k against a $210k estimate, which is a 24 percent contingency on a line item that ended up moving 148 percent. Contingency percentages work on construction line items where the scope is known. They do not work on entitlement outcomes, because the failure mode is a requirement appearing that was not on the list at all.

The sight distance problem is the version of this that has no dollar answer. When compliance depends on land you do not control, that is a binary, and binaries belong in the go or no go decision rather than the cost column. Checking whether every required improvement fits inside your own boundary is a due diligence item that costs an engineer half a day.

I'm early enough that I had to look up half of this, and the thing that stopped me was $78k of interest. That's more than most first deals I read about cost in total. Is carrying raw land through an approval process always that expensive, or was that a function of the 29 months?

Asking the one I'd be embarrassed to ask out loud: what is a preliminary plat, and what's the difference between withdrawing it and having it denied? Sextant said he withdrew, and I can't tell if that was strategic or just giving up.

On the comp point rena-expert made, this is a thing I'm running into while getting licensed. The lot comps I pull are finished product. There's no field in the data that says how long the seller waited or what the road cost. Buyers keep asking me what the land is worth and for raw acreage with subdivision potential the answer is that it depends on a process none of the comps describe.

One push back on where the loss actually came from. The ordinance change cost you money, but 29 months at that debt level cost you $78k on its own, and four of those months went to alternative alignments after the sight distance problem was already known. The road standard was bad luck. The four months chasing a fix on somebody else's dirt was a decision. Had you pivoted to the minor split at month 20, you are down maybe $130k instead of $193k.

Kestrel is being harsh but the agendas point is the one I'd take away. I read planning commission minutes on everything now, and it's tedious in exactly the way that means nobody else does it. An ordinance rewrite doesn't appear overnight. There's a consultant contract, a draft, two work sessions, a public comment period. All of it is posted. Sextant, when you went back and looked, how far ahead of adoption was the first public mention?

Nothing to add on the entitlement side, but 62 acres sitting for 29 months with no income is its own line item. Was there any ag lease or hay arrangement on it? In most rural counties a farm operator will pay something per acre for pasture or crop ground and it can cover the tax bill. It does not save a $193k loss. It takes the edge off the carry, and it can matter for how the land is assessed in some states.

Reading this three times. The part I didn't expect is that a neighbor refusing to sell a strip of bank can end a whole plan.

Different read from kestrel. The price killed it. $540k for 62 acres of unentitled ground where the plan needs a road, a detention basin, and an intersection fix is retail money for a wholesale problem. Even with the old standard at $210k of improvement, you're at $750k of basis plus carry against $940k gross before selling costs and any lot that sits. That's thin before anything goes wrong. The ordinance just found the thin spot.

Is there a consulting role in this? Someone who does nothing but read agendas and ordinance drafts for a county and tells buyers what's coming. Sextant, would you have paid for that, and what would it have been worth against $193k?

Following the debt for a moment. A loan on raw land carried through 29 months of approvals, and then the plan changes to something much smaller. Did the lender have to consent to the minor split and the sale of the residual, or did paying them off out of the closings handle it? Raw land notes usually carry a partial release schedule and a due on sale clause, and which one governed here is worth knowing for anyone reading this as a lesson.

Vellum, generally the loan documents control whether the borrower can convey any part of the collateral, and a land loan usually requires the lender's written release for each parcel sold. Terms differ by lender and by deal, so anyone in this position needs their own note and mortgage read rather than a general rule. Sextant, the question that matters here is whether the lender extended you and what it cost. Two years of approvals against a loan term that was probably shorter than that usually means an extension fee and a repricing somewhere in the middle, and that is the cost most people forget to put in the model.

This is the kind of write up that gives a stalled analysis a shape, because it names a check most buyers never think to run. The item worth taking from it is confirming that every required improvement fits inside the buyer's own boundary. That is a half day of engineer time against a binary that cannot be priced, and it belongs on the checklist for any lot split.