Frank Coda Grapples With California Regulations

Frank Coda Grapples With California Regulations

California’s cultural exports include the Beach Boys, Pet Rocks and fine wine, and Frank Coda, an associate principal of architectural and engineering firm GreenbergFarrow, hopes to extend the list. Coda wants to add the stricter environmental regulations outlined in California’s Environmental Quality Act (CEQA), which requires developers to provide environmental impact statements on a number of aspects, from water quality to global warming. The law also requires state and local agencies to reduce any potential negative environmental impacts of land use decisions.

Coda, a graduate of Georgia Institute of Technology in Atlanta and a 20-year veteran of GreenbergFarrow, works with retail developers such as Home Depot, Ikea and Kohl’s to develop new store sites. NREI recently spoke with Coda about site development and regulation issues.

NREI: How does the site development process change when a developer is required to meet stringent environmental regulations?

Coda: Time and money. I did several projects in the Southeast when I was living in Atlanta and you could go from day one of looking at a piece of property with the client, to getting the entitlements and starting construction in maybe three to four months in the late ’80s and early ’90s.

I think everywhere there has been an increase of review by the various agencies, but California is unique. California and three other states have an environmental law — out here it’s called CEQA. There’s [a similar environmental law] in Washington, New York and Massachusetts that I’m aware of. The end result of this act is that you are studying all of the environmental impacts that a project would potentially put forth. The essence of that act is really to enlighten the public. For California, a normal neighborhood shopping center of up to 50 acres — or above — could take nine months to two years, or even four years.

NREI: What are some examples of the environmental impact that needs to be identified under CEQA?

Coda: You have to go through and identify almost everything. The typical areas are traffic, noise, air quality and stormwater quality, which is gaining momentum across the nation. They’ve added a new thing to the study, which is global warming. On a given project — about 20 acres or above — we may have to study the effects of that project on global warming.

All the cities are jumping on it. We were joking that if this project is going to increase the ozone by a millimeter, we have to figure out how to mitigate that. That’s kind of the state of affairs in this highly environmentally charged atmosphere out here.

NREI: What is the cost premium associated with site development in markets with strict environmental regulation, like California?

Coda: On the money side, I tell my clients, a minimum for even a fairly small project is about $200,000 for the environmental stuff, going easily to $1 million.

NREI: Do you think the economic environment has any impact on retail development?

Coda: It definitely has impacted this market. About two years ago people were tying up land in areas that no one was around. Everyone on the retail side relies on the housing side because you need the housing to support a retail center. So a lot of people were betting that housing would keep going. They were buying the land early, getting it entitled. As soon as the housing thing hit, a lot of the projects in the outer-lying areas went away. A lot of that wiped out the one-time developers.

The substantial companies understand that this is a cycle like everything else, so they’re looking at projects. Because of the entitlement process, we’re working on things that won’t break ground probably until 2010 or 2011. Out here there’s a lot of value in having the entitlements, basically all the discretionary approval, the right to build a project.

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