Pad Delivery Pitfalls

Originally published 2nd Quarter 2004

A part of most retail development involves delivery of a graded pad to anchors or out-lot users, who will then build their own buildings under the terms of a site development agreement or ground lease. A number of legal and practical considerations come into play that, if addressed in advance, will provide for a less adversarial transaction. Avoiding miscommunication, which could result in a loss of good will between the parties, is a key strategic goal to expedite closing or rent commencement.

Perhaps the most fundamental concept – which should be clear but is often ambiguous – is establishing which specific plan or criteria will control the construction process. Many retailers’ forms provide that in the event of a dispute, the retailer’s criteria or specifications will control, regardless of the specifications set forth in the retailer approved, site-specific plans. These forms may not provide dates or attach