Pitching new self-storage facilities to municipalities has traditionally been a tough sell, and many operators are finding that not much has changed in the past decade.
After a long dry spell, self-storage construction is once again ramping up. Yet developers who are moving forward with new construction and redevelopment projects are finding they are back to square one when dealing with cities. Obtaining the necessary zoning, city approvals and permits can be a lengthy and challenging process.
“As the development window opened, the reality is that it opened for a number of potential developers,” said Todd Amsdell president and CEO of Cleveland, OH-based Amsdell Companies, a self-storage developer and operator of Compass Self Storage.
Construction activity is on the rise for self-storage, as well as other property types such as multifamily, industrial and retail. That creates more competition for sites, as well as more options for communities.
Competing with other uses
The zoning itself is not more restrictive than it has been in the past, according to Amsdell.
“But, as communities see the opportunity to develop other product types, as they were seeing prior to 2006 and 2007, they start to become less open to the idea of self-storage,” Amsdell said.
Some cities are less willing to work with self-storage developers when they have interest from developers who want to build industrial or retail property on a site, which often bring more jobs and tax revenue.
For example, Amsdell Companies started working on a new self-storage development project in south Florida about two years ago. “When we started the project, our view was that the city was on board,” said Amsdell.
Fast forward two years and now the community leaders believe there is a higher and better use for the site and the project has stalled.
“As the economic climate has gotten better, their willingness to work with us has diminished,” Amsdell said.
The ease of getting the necessary zoning, approvals and permits for a new greenfield self-storage project or even a redevelopment is very much a case-by-case basis that varies from municipality to municipality, said Norman Schulman, CEO at Sentry Self Storage, a full-service management and consulting company based in Coral Springs, FL.
For example, Sunrise is one Florida city that removed self-storage from its zoning entirely 20 years ago. In nearby Coral Springs, that city applies a special use to self-storage development, meaning that a developer can’t just go in by right. The city has to look at and approve a specific site for self-storage use.
Taking the time to educate municipalities on the product and the design can help smooth the way. A lot of the zoning that was written years ago is in place because of an outdated view of self-storage with metal garage buildings and gravel driveways. The industry has changed over the past two decades with beautiful properties that can conform to what a municipality wants, such as a retail-style property or more vertical storage developments, said Schulman.
“A lot of it is educating the municipalities to understand that,” Schulman said.
Make a positive impact
Each city views self-storage in its own way, Amsdell said. Some cities might allow for self-storage in areas that are zoned for light industrial uses, while others view self-storage as retail. In addition, zoning districts can include exclusions or carve-outs, such as an industrial zone that prohibits the addition of chemical plants, junkyards – or self-storage.
Even with the correct zoning, some cities may be able to block a project just because they don’t like the design, Amsdell said.
One of the steps that can help to get city leaders on board is if a developer can demonstrate a clear positive impact that a project will have on a community, such as taking a vacant or blighted property and converting it to a viable storage business.
Other good advice is to sit down and talk to the community early on to help gauge whether there will be support, or if it might be an uphill battle to try to push a project through the permitting and approval process.
“It all comes down to people and their interpretation. It’s never black and white and simple when you have people making decisions,” Amsdell said.