How to maximise value of a site with a protected structure on it?

54and56

Hi all,

Family friend runs a lifestyle business from an 1870's protected structure bungalow set on part of the road frontage of 1.2 acres of freehold property on the edge of a village thats a 10 minute drive from a decent sized town.

She is retiring and needs advice on how to maximise the value of the site the remainder of which is taken up primarily with a car park and some cheap/functional storage buildings/sheds etc.

Her head is a bit fried with bar stool type advice from various well intentioned friends and family saying she should ring fence and sell the protected structure bungalow and use the remainder of the site (which has additional road frontage) to build on with suggestions ranging from one big house to a courtyard of apartments.

She has no experience dealing in or developing property and either do I so my tuppence worth of advice to her would be to invest in getting the site professionally assessed for what could be done within the bounds of commercial reality for the location (is there demand for apartments there?) and restrictions imposed by the protected structure status of the bungalow but perhaps she'd just be better off separating the bungalow from the rest of the site, selling that on a stand alone basis for someone to turn back into a family home and then selling off the remainder of the site to someone who can develop it as they see fit.

Before I go sticking my oar in (she has asked for my opinion) I'd appreciate the views of people here who have knowledge and experience of this subject matter.

Does it sound like paying for a viability/feasibility study would be a worthwhile thing to do and if so other than going to the local architect is there anyone you'd recommend (by PM if that's the rule) who would specialise in extracting maximum value from these sort of situations?

What would such a study be expected to cost?

Thanks in advance.

dusteeroads

Protected structures status extends to all parts of the site until you obtain a section 57 declaration http://www.dublincity.ie/main-menu-services-planning-heritage-and-conservation-conservation/section-57-declaration clarifying otherwise. Dublin City Council guidance here but same applies to all

1.2 acres sounds small if the site is rural / not connected to a mains sewer.

Metric Tensor

I could be corrected but I think it extends to the "curtilage" of the protected structure rather than specifically the "site" - I recall this being described as an important and completely undefined difference that leads to untold arguments!

Leaving that aside it hugely depends on her budget, timeline, how risk averse she is and how much stress she is willing to take on.

Option 1: low stress, low budget, low risk, quick time, "low" profit
Put the entire property on the marked and take the highest bidder.

Option 2: medium stress, moderate budget, moderate risk, one-two year timeline, reasonable profit or moderate loss
Engage local professional to seek (and hopefully obtain) planning permission for as extensive a development as possible on the site. Then sell the whole lot which now has planning for more lucrative development at a much higher rate than Option 1. This will be complicated by the presence of a protected structure. The risk comes from having no success and ending up two years down the road with a lot of professional fees paid and the site being in the same or worse condition.

Option 3: high stress, high budget, high risk, five year+ timeline, high profit or high loss
As per option 2 at the start and then rather than sell the site turn developer by engaging a construction team to build the entire project. Then sell the development at a massively increased amount versus the value of the undeveloped site. Sanity and hair follicles may or may not be present after sale.

Other choices usually fall as some sort of halfway house between the above options. Horses for courses on this - an elderly retiree may have a different outlook than a gung-ho twenty year old but you can't assume what either wants - I've me enough people to know that age, sex, social status, etc. are not a good indicator of peoples risk/reward beliefs/

54and56

Thanks dusteeroads that's very useful info to have.

Metric Tensor - thanks for the succinct summary of options which I couldn't agree more with.

I know there are a ton of variables and a lot depends on the rates of the chosen Architect but based on the limited info I've provided and assuming the Architect is a good quality but local/small town firm rather than big city type firm what would your ballpark guess be as to what "a lot of professional fees paid" could amount to?

Metric Tensor

I don't really have much of a handle into the situation based on the limited information you've presented. (I understand the reason for this.)

At a very rough guess somewhere in the low to mid 5 figures.

54and56

Metric Tensor wrote: »

I don't really have much of a handle into the situation based on the limited information you've presented. (I understand the reason for this.)

At a very rough guess somewhere in the low to mid 5 figures.

So your guesstimate is perhaps €15,000 to say €25,000?

gctest50

You might be able to make a reprentation to get it removed from the list

54and56

gctest50 wrote: »

You might be able to make a reprentation to get it removed from the list

True hadn't thought of that. I'd say that's a tedious and time-consuming process though worth looking into.

Metric Tensor

Je_suis_Jean wrote: »

So your guesstimate is perhaps €15,000 to say €25,000?

In general consultant costs will be between 10-20% of construction costs but a fair proportion of this will be during detailed design and construction so planning only will be a nice bit cheaper. However the protected structure will push things up the scale.

gctest50

Je_suis_Jean wrote: »

True hadn't thought of that. I'd say that's a tedious and time-consuming process though worth looking into.

Loads of them get removed thankfully.

Does it have anything like ..uPVC windows added a good few years ago ?

gctest50

You'd really need to do the math on it

but here's a few that were removed anyway :

Among the properties struck off the list were:

Kilhile House in Arthurstown, farmhouse - planners agreed that alterations have been carried out which have diluted the original character of the house;

Kyle Upper in Castlebridge, worker's house - the house has been extensively modified in accordance with planning permission granted in 2010;

Loughtown House in Lady's Island - little of the original building's fabric has been left in the wake of extensive re-building;

Killurin Rectory in Glynn - the owners feel that the house should be classified as a dangerous structure;

Monart Rectory near Enniscorthy - modernising alterations and extensions have taken place, with the blessing of planning permission granted last year;

Curraghmore in Tintern, farmhouse - much of the original character of the dwelling has been lost as a result of its not being occupied;

Fitzgerald Terrace in Rosslare Strand, two semi-detached houses dating from 1882 - the character of both buildings has been altered over time;

Strand Road in Rosslare Strand, house - the house has undergone internal and external changes;

Osborne House in Rosslare Strand - changes over time have wiped out the original features;

Leinster Lodge in Rosslare Strand - improvements over the years have significantly changed the character of the building;

Bridgetown, house - the 19th century, creeper covered house has significantly declined in recent years and appears to have 'structural issues';

Iona House in Screen, presbytery - 'much of the character has been lost' was the verdict of a planning official who was shown around the house;

Skillen House in Castlebridge, worker's house - work undertaken to halt decline of the structure have removed points of interest;

Rosemount House in Ballycarney, farmhouse - work has been carried out over generations and new windows have been ordered;

Ballynastraw in Glenbrien, thatched farmhouse - the walls may date from the 18th century but the uPVC windows are of more recent vintage;

Balcarrig near Ballycanew, farmhouse - the house that used to have four storeys now has three, signifying major internal alterations;

Mount Elliott Tunnel near New Ross, railway tunnel - opened in 1897, the tunnel is an important survivor of Wexford's industrial heritage but the owner was not notified properly of the intention to list; Screen House - an error in the serving of notice to list this attractive 18th century house was a factor in the recommendation not to include;

Cools near Barntown, farmhouse - the building has been extended and altered;

Ballinaboola House, farmhouse - on close examination, the roof and windows are modern;

Rowan at Ballynaclash in Blackwater, thatched house - the walls appear to be the only surviving remnants of the old fabric of the building;

Montague Cottage, north of Ballycanew, farmhouse - a new porch, new roof and new windows have dented the conservationists appeal of the pre-Famine building;

Ballydaniel in Camolin, farmhouse - a flat roof extension to the rear and a veranda at the front lessen the impact of the 19th century features;

Hillview House south of New Ross town, farmhouse - the house completed in 1841 now has modern glazing and roof, as well as an added porch;

Solsborough near Enniscorthy - the former gate lodge has undergone major alterations, which have saved it from dereliction;

Seaview Cottage in Curracloe - this seaside villa has been ' altered and updated';

54and56

gctest50 wrote: »

Loads of them get removed thankfully.

Does it have anything like ..uPVC windows added a good few years ago ?

Yes it definitely does plus a modern "conservatory" added to one gable end which is typical 1990's stuff, all windows from a low 2 ft ledge to ceiling height with a wood lined pitched roof plus a modern single storey functional canteen/employee area was added to the rear of the building in the 90's also. Pure functional build not at all in keeping with the original protected structure which is described on the www.buildingsofireland.ie website as a "detached four bay single storey house built c.1870"

54and56

Metric Tensor wrote: »

In general consultant costs will be between 10-20% of construction costs but a fair proportion of this will be during detailed design and construction so planning only will be a nice bit cheaper. However the protected structure will push things up the scale.

Knowing this lady as I do (bit of a 60's hippy who is quite indecisive) I'd say the absolute max hassle they'd be prepared to undertake in order to maximise value of what is their main retirement asset is Option #2 you outlined above i.e. medium stress, moderate budget, moderate risk, one-two year timeline, reasonable profit or moderate loss. Engage local professional to seek (and hopefully obtain) planning permission for as extensive a development as possible on the site. Then sell the whole lot which now has planning for more lucrative development at a much higher rate than Option 1. This will be complicated by the presence of a protected structure. The risk comes from having no success and ending up two years down the road with a lot of professional fees paid and the site being in the same or worse condition.

If that was the chosen option I assume fees would effectively be split into two stages:-

1. Initial feasibility study.
2. Design and planning application.

If the output of the feasibility study is that the site can't (for planning reasons) or shouldn't (for commercial reasons) be developed the project gets canned and the owner is out the cost of the feasibility study. Would this likely be in the €5,000 to €7,500 range?

Assuming the feasibility study produces a positive outcome an informed decision can then be made on proceeding to invest in outline design and planning application which I'm guessing would be more involved and in the €7,500 - €12,500 range?

Do the figures above sound reasonable?

As you can tell I'm keen to get some sort of an educated guess on the cost of both stages as that will be the main question I'm asked. I know I'm asking for some guidance based on limited information but whatever info you can provide will certainly be better than the vacuum of info that currently exists.

Metric Tensor

It sounds like a smallish site. A "feasibility study" as you call it should be a fairly short affair. If you pick the right local professional who does a lot of design and planning work in the area he/she would be able to give you their thoughts on feasibility in an hour or two consultation session for a few hundred euro.

So I'd recommend a few hours with a professional for a consultation rather than commissioning a formal feasibility study - of course if things are a little unclear the professional may need to do some research and it will evolve into more of a feasibility study. For a site of a little over an acre in a relatively rural setting, when the aim is to maximise land value I don't think you would need to spend what you are saying.

Planning costs will vary hugely upon the chosen scheme and it's constituent parts. As an example if a petrol station was chosen (I know it probably won't be) substantial traffic design and analysis work would be required. If a waste processing facility was chosen substantial environmental impact studies may be required. etc. etc.

I'm not going to commit an estimate of fees to paper/internet because I'm certain to be wrong if I do! Meet an expert and ask them for a written quotation in the first visit - it won't be exact but it'll give you an idea of rates, etc.

54and56

Metric Tensor wrote: »

It sounds like a smallish site. A "feasibility study" as you call it should be a fairly short affair. If you pick the right local professional who does a lot of design and planning work in the area he/she would be able to give you their thoughts on feasibility in an hour or two consultation session for a few hundred euro.

So I'd recommend a few hours with a professional for a consultation rather than commissioning a formal feasibility study - of course if things are a little unclear the professional may need to do some research and it will evolve into more of a feasibility study. For a site of a little over an acre in a relatively rural setting, when the aim is to maximise land value I don't think you would need to spend what you are saying.

Planning costs will vary hugely upon the chosen scheme and it's constituent parts. As an example if a petrol station was chosen (I know it probably won't be) substantial traffic design and analysis work would be required. If a waste processing facility was chosen substantial environmental impact studies may be required. etc. etc.

I'm not going to commit an estimate of fees to paper/internet because I'm certain to be wrong if I do! Meet an expert and ask them for a written quotation in the first visit - it won't be exact but it'll give you an idea of rates, etc.

That's fantastic info Metric Tensor, really appreciate it.

The site definitely couldn't be developed into anything as commercial as a petrol station or waste processing facility (which I know you chose for illustration purposes) so is likely to be limited in scope to some form of residential or at a max a small scheme of holiday type accommodation as the local area is popular with outdoor pursuit type tourists.

I think I've gotten as much as I can from a Boards thread on this so thanks very much to everyone for your feedback, it's really helped clarify things for me.

Summary:

1. Choose a local professional with relevant experience and pay them to visit the site then do a desktop type review in the context of maximising PP. Likely a few hours of their time (say 5-6 hours) at (guess) €200 an hour so budget €1,000 to €2,000 if slightly more hours or higher rate per hour.

2. If the initial desktop indicates there is little scope for any material commercial development she now knows the only option is to sell "as is" and won't be wondering if she's making the right decision or worse she won't find herself in a situation where she sells "as is" without having explored it's development potential and finds the new owner comes along and adds serious value by securing PP and selling or developing out.

3. If the initial desktop indicates there is scope for commercial development she can then get a quote for that work to be undertaken in the knowledge that she may be investing €x thousand now in order to add €y thousand in value (a significant multiple of the €x thousand invested) in a year or two once the process is complete albeit there are unknown risks along the way which could ultimately kill the potential for development to happen at all.