Cohousing-L Mailing List: Re: Seeking advice on working with developer new to cohousing

[R Philip Dowds (rpdowds]

Property development is an inherently challenging and risky venture.  Most 
efforts to form and develop cohousing never make it to opening day, and your 
group should anticipate that everything will take longer and cost more than you 
first plan on.  This is normal.  Having access to someone with experience in 
property (re)development can help save time and money, so early partnering with 
a qualified developer makes a lot of sense.

However, keep in mind that most developer partners are not on a vision quest, 
they are expecting a successful business partnership — one that creates some 
profit, and adds to their credibility for their next project (which is why they 
care about satisfying you).  In Cambridge, we have two cohos within a mile of 
each other.  One benefited from the leadership of a local developer, and after 
four years, opened on schedule; the other was more or less victimized by an 
indifferent development team (and a resistant neighborhood), and took almost 
nine years from concept to ribbon-cutting.

An MOU is all about sharing of risk and reward, plus responsibilities 
commensurate with rights.  Who provides the up-front cash?  Who gets cash back 
in the event the venture comes to naught?  Who shares in the cost of ugly 
surprises, like litigation, or toxins in the soil?  Who owes what to whom if 
the project takes “too long” — and, what is the definition of “too long”, 
anyway?  What are the “free” services, and the limits on these services?  If 
there are “profits” available after the sale of the last four units, who gets 
them?  There are no universal correct or incorrect answers to such questions — 
but an experienced attorney can help you sort out a configuration of answers 
that seems fair to everyone around the table.  And helps all parties extract 
themselves with minimum damage, in the event of catastrophic collapse of the 
deal.

One suggestion I have is, Don’t let the developer own and control everything 
you care about, like the property, the architect, and the special permits — at 
least, not without owning a lot of the risks as well.  One clue that the 
developer is really on your side is that s/he will be buying a unit, and moving 
in with you.  Yes, this sometimes happens with cohos.

R Philip Dowds AIA
Cornerstone Village Cohousing
Cambridge, MA

On Mar 21, 2014, at 2:28 PM, abigail weinberg <withhashem [at] yahoo.com> wrote:

> 
> Hello!
> My name is Abby Weinberg and I am a member of Wissahickon Village Cohousing 
> -- an emerging cohousing community in Northwest Philadelphia, PA. (See 
> http://wissahickonvillagecoho.com/ for more info. about us.)
> 
> For the past 6 months, we have been in dialogue with an experienced developer 
> with great community connections who has never created cohouisng but is 
> seriously considering working with us to redevelop a church building that he 
> is in the process of buying.  At this point, he is the sole investor in the 
> project and expects to pre-sell units to our members once firm prices can be 
> set.
> 
> 
> We are looking for wisdom/advice/mentorship from those of you out there who 
> have successfully worked with such a developer.
> 
> 
> In addition, if anyone has a Memorandum of Understanding that spells out the 
> details of the relationship between the developer and the cohousing group, we 
> would love to see a copy of it.
> 
> Thanks very much for your support,
> Abby
> 
>  
> 
> 
> Abigail Weinberg
> Community Coordinator,
> Wissahickon Village Cohousing
> Home: 215-842-0268  Cell: 734-474-6958  
> abbyweinberg [at] alum.barnard.edu
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