Basic Land Use for Your Business
Congratulations! You came up with a great idea, you’ve developed a business plan and secured financing. Now, where are you going to open your physical location?
It is critical to research the property that you want to purchase or lease to find out whether your proposed business operations will be allowed under zoning and land use regulations.
What Are Zoning and Land Use Regulations?
Zoning and land use regulations are local laws designed to protect the public health and safety as well as natural resources and the environment. These laws can restrict or limit various aspects of any business, ranging from the kinds of business activities that can be conducted on a particular piece of land, to the specifications for buildings, and the parking to be provided for customers (parking is a major issue here in the South Bay).
Typically, you’ll find five major types or categories of zones in a city:
Commercial
Industrial
Agricultural
Recreational
Residential
Local zoning codes set forth detailed guidelines regarding the activities allowed in each particular zone, as well any special permits and conditions required for certain activities. Generally, operations that are not authorized in a particular zone are prohibited there, unless they fall within some type of exception (for example, a non-conforming use, a variance, or a determination from the zoning administrator that a particular use is substantially similar to what is expressly authorized).
Discretionary Approval Versus By Right
Depending on the city and your business, your proposed operations may be allowed by right, or they may require discretionary approvals. Operations allowed by right (aka “as-of-right,” or “by-right”) are expressly authorized in the zoning code and do not require discretionary permits or public review so long as the proposed use conforms to the requirements of the zoning ordinance.
Other uses require some level of “discretionary review,” meaning you would be required to proceed through the public review process to receive a use permit or other entitlement, and city staff and/or local governing bodies would have discretion to deny or limit the desired use.
The path of lease resistance here is obviously to find property where your desired use is allowed by right, but that’s easier said than done. Keep in mind that if you intend to combine different uses (e.g., a brewery and tasting room, a retail store with office space, or a manufacturing facility with a retail element), each of those uses needs to be authorized. Approval for one use does not mean approval for all.
Never assume that a proposed used will be allowed... that can be a very expensive mistake. A business operating in violation of a city’s zoning code can be deemed a public nuisance and forced to shut down.
Time is Money
Land use issues take time. If your proposed operations will require discretionary approvals from a local government, meaning some or all of your proposed operations are not allowed under the code as a matter of right, be prepared to engage in a long process with the city. It will require not only negotiations with city staff, but engagement with local governing bodies (planning commission and city council), and potentially engagement with the public. If you have plans for a large or controversial project in an area that citizens care about, be prepared to face pushback from the community. The political, legal and social considerations in obtaining land use approvals should not be underestimated. Depending on the type and size of the project, it may be necessary to retain a public relations specialist in addition to a land use attorney.
Plan Accordingly
In conclusion, if you are planning to open a physical location for your business, educate yourself on land use issues, and do not underestimate the time it will take to obtain local approvals before you can open for business and start generating revenue.
