Old industrial areas in every capital city are under pressure to move to larger, more modern facilities, allowing new higher density developments and factory conversions to take their place.
Some of the key issues we’ve identified through this process of change include:
• Zoning and overlays
• Soil testing
• Structural issues
• Land surveying
Zoning and overlays
One of the first issues you’ll need to work through is what type of use is permissible on your site. Over the past 10 years, town planning has become more complex as developers push for higher density development in areas ideally located for these uses. Unfortunately not all councils have managed to keep up with this rate of change, with rezonings from underutilised industrial areas to mixed use or residential falling behind demand.
It’s critical to the future success of your project to seek professional planning advice at this point. Preparing a property development assessment to ascertain the feasibility and profitability of the project will get you on the right track.
Many old industrial sites are covered by environmental overlays that notify future developers of any previous unhealthy uses of the site. Whilst industry has cleaned up its act in recent years, it wasn’t uncommon for industrial uses to leech dangerous chemicals into the soil, or worse, create illegal drains into our rivers and waterways.
We use the services of an environmental engineer to assess soils and provide advice on remediation requirements early in the process. This allows clients to budget for any potential clean up and testing costs. These costs can run into the hundreds of thousands of dollars, depending on the previous use and the damage created. Councils aren’t keen on allowing kindergartens or vegetable gardens on potentially contaminated land.
Many inner-urban areas are covered by heritage overlays and controls. This includes old industrial sites, where remnant buildings hold some heritage significance. In many cases, the controls might demand the retention of front walls, behind which new development can occur.
We use the services of our heritage adviser or a heritage architect when a site needs assessment. In many cases, the heritage architect is able to review the studies that have led to the placement of heritage controls. Through negotiation, we’ve been able to reduce the requirements for retaining factory walls and other structures in industrial areas, where we can prove that the old buildings hold no real significance.
When clients desire the retention of the existing industrial building in their new development, we engage the services of our structural engineer. In some of the heritage cases mentioned above, the developer is constrained by the planning controls to retain the significant heritage facade.
A good example in Melbourne at a commercial scale is the retention of the old Myer building facade in the city. The mechanism that’s holding up the facade is worth $4 million alone. This has drawn mixed reactions from the public and is an extreme example of some onerous heritage controls in action.
Many industrial areas were subdivided more than 100 years ago. Back in the day, planning was a little more fast and loose with acquisitions, developments and construction projects not necessarily following the letter of the law. This has left our generation with a few headaches on land titles.
I know I sound like a broken record, but it pays to do your due diligence before purchasing your next development site. In the case of one of my projects, we identified an error on title, which listed the site as being 240 square metres. When we surveyed the actual building structure, we quickly realised the old factory we were purchasing was in fact much larger in size, thanks to some opportunistic development about 83 years ago.
By engaging our land surveyor and solicitor at this point of the assessment stage, we were able to formally increase our land size by 80 square metres. In the end, that allowed us to get a fifth townhouse on the site.
To make sure you’ve mitigated all of your risks, I’d recommend you put in place an experienced team of planners, architects, builders and associated professionals who can move your development application through the planning process efficiently and effectively.
This article first appeared for Australian Property Investor Magazine