Sorry for the late update, for I just recovered from a nasty shock.
Remember the Spartan Heights Student Housing development that Republic was building for San Jose State University?
Well guess what, the deal’s off.
Nada, zip, gone.
Basically, the owner of the vacant lot we were going to build on tried to dump the majority of the project’s risk on Republic.
To begin with, one part of the development process is obtaining city permits, neighborhood approval and support, and environmental analysis of the site, and the owner insisted that we pay him his initial $1 Million deposit for the land purchase before even allowing us to obtain the documentation that I just mentioned.
That, in turn, exposes the project to a massive degree of risk — one, the city might not approve the permits we need, two, no neighborhood support means the threat of lawsuits for years on end, and finally, without a complete environmental analysis, we don’t know how much money we might need to clean the property of any poisons — and since the site used to be a gas station that sold leaded gasoline, the cleanup cost might dial into the millions!
However, the property owner was unwilling to negotiate in any way, and without the budget to overcome the risk, Republic was forced to simply give up the deal (apparently the third developer in a row to leave the project!)
Instances like these, unfortunately are commonplace, and are the results of many rules, both financial and legal, that make it much harder for developers to build new housing and thus ease the housing crisis.