Where looking at taking the next step in getting our digital billboard going. These are somethings I can think of that we need to do.
- Get a lease for land with the land holder
- Get a building permit
- Arrange financing for the billboard.
I’m not sure what order to do these in. I was thinking of first getting a non binding agreement with the land holder to extract the sign, if the financing doesn’t come through or the permit is denied then we are not locked in. Then getting the permit so we can go to the bank with our business plan and numbers along with the fact we have a location and permit already might help.
What would be the best way to go about these steps?
I think you should make it binding, just make sure you put in some language to the effect that the contract is void if you can’t secure financing to build the structure.
You definitely have to work on the land lease first, as I believe that must be shown to the city in order to get a permit. Once you secure the lease, I would then work on the permit/financing at the same time.
Before you can negotiate a lease, you have to do your homework on ad rents and how much you can afford to give the landowner. You can put in your lease that the rent does not begin until the sign is constructed, and that (please verify with your attorney) should negate what happens if you cannot obtain financing (if you don’t build the sign then groundrent never begins – but make sure that’s a valid argument in your state). You definitely must have a lease before you can apply for a permit, and you may need to attach the lease and permit in your financing package, so you may not be able to formally apply for the loan until you have all the pieces. However, that does not hold you back from making some preliminary calls to find an agreeable bank.