You’ve found what you think is a perfect site to develop a self- storage facility, but now you need to work through the complicated zoning process.
Historically, many self-storage developers would target only those sites zoned for self-storage, such as warehouse or industrial parcels, but that’s changed in recent years. Today, customers expect conveniently located self-storage facilities in commercial, retail and residential areas. However, finding sites with proper zoning already in place is challenging, so self-storage developers often must pursue rezoning.
“Today, you see more properties being built at First and Main—more retail-type locations—because the industry has evolved,” said Todd Amsdell, president and CEO of Cleveland, OH-based Amsdell Companies, which operates under the Compass Self Storage brand.
I’m pre-vetting a project before I spend a whole lot of money on designs and entitlements and even tying up the site sometimes.
— Gary Delaney, president of Banner Storage Group
That’s where the disconnect comes in, he said. Self-storage has evolved, but not necessarily the zoning landscape for storage facilities.
Since zoning requirements differ from state to state, city to city and even neighborhood to neighborhood, experts say doing your homework can prevent headaches—and prevent a loss of money.
“Obviously, it doesn’t do much good to waste a lot of your money upfront if the site is not currently zoned properly or isn’t allowed to be zoned [for self-storage] and you feel there’s little likelihood of success,” said Gary Delaney, president of self-storage developer and owner Banner Storage Group, based in Northbrook, IL.
What follows is a comprehensive guide to self-storage zoning.
To start, you should figure out what kind of zoning is required to develop self-storage in your target market. You can contact local zoning officials or visit a municipality’s website to find zoning designations and restrictions. You also can pinpoint which municipal departments oversee zoning.
Once you’ve got that information nailed down, you should meet with city planners to learn more about zoning and get feedback about your planned project. This is a good time to educate them about contemporary vs. old-school storage facilities.
Once that homework is done, a developer typically must:
- Submit a formal plan.
- Meet with neighborhood and business groups affected by the development.
- Make a presentation to a development review committee.
- Present plans at public hearings.
- Secure approval from the review committee and the city council.
Oftentimes, the biggest stumbling block is that self-storage isn’t permitted under a municipality’s current zoning and must undergo special review and approval, Amsdell said. In other words, self-storage doesn’t have “zoning by right.”
Delaney said he gets his ducks in a row when dealing with this type of site.
To learn about “not in my backyard” (NIMBY) opposition to self-storage facilities, visit blog.selfstorage.com/self-storage-operations/self-storage-opposition-2727.
“In each of these markets, I’ve established a group of consultants that have a lot of political contacts or contacts with the right zoning attorney,” Delaney said. “Then I’m having conversations with the city’s planning department, plus either the zoning commissioners or city council members or mayors. I’m pre-vetting a project before I spend a whole lot of money on designs and entitlements and even tying up the site sometimes.”
All of Delaney’s contracts to purchase sites are based on receiving the necessary zoning and entitlements.
Delaney recommends hiring a zoning attorney. “If you don’t have any expertise in this area, then the best dollars spent before you ever hire an architect is to get a good zoning attorney,” Delaney said.
Making zoning work
A project that Delaney is working on now—one that wasn’t initially zoned for self-storage—is the conversion of a vacant 40,000-square-foot big-box store in Colorado. He’s adding two floors to the existing structure, creating a total of 120,000 square feet of self-storage. He also acquired a small parcel for a retail pad aimed at a Starbucks store or another user to generate retail tax dollars.
Delaney said there was a “unique section” in the local zoning clause that allowed self-storage by a “special condition.” He designed the building to fit in with the neighborhood.
Taking the community’s pulse
Amsdell said it’s key for self-storage developers to get the pulse of the community regarding its attitude toward a self-storage development.
“If they don’t want you, you’re in for an interesting set of meetings and circumstances that you might not be willing to see through,” he said. “It could be years and years in the making.”
He knows this from experience. Amsdell recently converted a former car dealership in Shaker Heights, OH, into a Compass Self Storage facility. It’s the first self-storage facility ever permitted by that city. Amsdell started wrestling with city officials over zoning issues in 2013 and eventually received city approval to move forward.
“When we first got into the business, one of the first locations we really wanted to be in was Shaker Heights, and that was the 1970s,” Amsdell said. “Over the next 40 years, we probably checked in with that local municipality every three or four years with an idea, and they were extremely consistent in just saying ‘no’.”
But as the Shaker Heights project proves, even long-standing opposition can be overcome.
“The good news is even if you’re a novice, if you just follow the one rule of talking to your local communities and seeing what they want and what they’re open to, they will guide you,” Amsdell said. “They may welcome you with open arms. If they see you as an addition to the community that they want, they will help you. If they don’t, they’re going to throw so many roadblocks in front of you that it’s probably going to be a very long process.”