Another type of nightmare that could stall your project for awhile: Construction near power lines. Why? Because you have to deal with your local utility companies. For us, we have to deal with LADWP (Los Angeles District of Water and Power).
We have a couple of projects that triggered the construction near power lines clearance. Before COVID, LADWP took about 2-3 months just to respond back to you. However when COVID hits, our project took at least 7 months for them to talk to us. Our other vested projects also facing similars issue where rehab is near completion but we need LADWP to approve the placement of new electric panel. There's literally no response for 11 months since the project started. The logic of the clearance is that power lines have a radius of 10ft air & ground setback. No buildings are allowed to be built within that 10ft radius unless you got an approved variance from LADWP. You have to submit your plans to the correspondence contact window for them to approve your plans and take it back to LADBS (Los Angeles Building and Safety) to remove the clearance. Both of our projects have power lines literally populated in the backyard. So we have two options here:
1) Submit to LADWP for variance - the lead time is currently unknown due to COVID. Our best estimate is another 6 months before they say yes or no. Too much risk and time sink.
2) Revise our plans to avoid the 10ft radius from power lines - We can convince the plan checker that our buildings are not within the radius and hopefully they can take the clearance off. The process takes about 4-6 weeks with revise plans but we have to adjust our financial modeling and take hit on both cap rate and valuation due to footprint reduction.
I could not imagine how many developers are getting their project delayed because of power upgrade.
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