10 Tips and Tricks for Preparing a Developer RFP: Strategies to Maximize Developer Interest in Your Site and Project

The developer request for proposal (RFP) is the primary way that communities engage private developers in local development project ideas. Most don’t get it quite right. Here are ten tips and tricks from our experience to help you maximize success in attracting developer interest in your development project. 

  1. Don’t Write a Developer RFP. At least not yet. Many communities jump right to asking for full-fledge proposals. While this can be appropriate in some cases, it is almost always better to start with a Requests for Expressions of Interest (RFI). Full RFP responses are significant efforts for developers to respond to, often calling for site plans, artist renderings, detailed financials, and so on while an RFI can be as simple as a letter of interest. By jumping into the RFP process, you are limiting your pool of potential developers by requiring this heavy lift at the onset. An RFI provides an opportunity for you to cast a wider net and, perhaps more importantly, gather important feedback and intelligence on your project idea that may result in modifications to your desired program or design. It also gives you an opportunity to engage developers directly in conversation or negotiation, which may preclude any need to go to a full RFP process.
  2. Have a Community Vision. Developers want to mitigate risk. Public resistance to a project is a risk that can derail and tank projects after significant investment has already been made. The RFP should highlight how the vision for the site has community support. Was the site identified as a strategic development opportunity for the community? Does the Comprehensive Plan address this site? Are there community plans that indicate support for the type of development you are hoping a developer will deliver? The more you can demonstrate that the project will be smooth-sailing the better. No community vision? Get the public on board by hosting an event that allows Q&A. Record the event and include a link in the RFI to demonstrate public support for the project. Put a sign up at the project site that illustrates the vision for the property
  3. Show the Market Support. Demonstrate that a developer’s project here will be successful. Conduct market research that demonstrates demand for the desired uses. As an example, for market-rate apartment projects, show that area vacancy rates are low, households in the right income range are increasing, and rental rates are strong. Developers will conduct their own market research, but key positive market attributes will help hook more interest and this extra layer of due diligence will help demonstrate your community’s commitment to the project.
  4. Get Your Site Development-Ready. A site and project should be ready for a developer to step into. That means having the basics covered, including site control and zoning in line with the vision for the project. Think through all aspects of “site-readiness” including infrastructure, utilities, environmental concerns, traffic, etc. Invest in up-front due diligence as much as possible. This may include investigative studies including environmental site assessment or a traffic impact study. Your goal is to reduce the unknowns for a developer and reduce the time and cost burden of your project to a developer. The RFP should demonstrate and highlight how your site is ready and waiting for investment.
  5. Include a Letter of Invitation. An invitation letter from a Mayor, Town Supervisor, regulatory boards, etc. to introduce the RFP is an opportunity to introduce your community and project and demonstrates that municipal officials are behind this effort.
  6. Understand the Financials. Most development projects require some form of public assistance, which can range from reduced land cost, provision of infrastructure, tax abatements, expedited permitting, and others. Look at the project from a developer perspective and what a pro-forma is likely to look like for your project. Will it be profitable enough to attract a private developer? What is the “feasibility funding gap” that will need to be filled to make it a viable project? What are the options for filling that funding gap? While the RFP shouldn’t tip your hand, necessarily, on what you are prepared to bring to the table, it should identify potential resources/incentives you are prepared to offer and indicate a willingness to work with the developer to make the project happen.
  7. Be Specific About What You Want – but Invite Creativity. The RFP should clearly indicate the vision for the site, including at a minimum the mix of uses, scale, and design preferences. Be clear about what the “must-haves” are where there is little or no flexibility. But, do not be overly prescriptive and be sure to invite creative ideas from developers. Explain what you are trying to accomplish and welcome alternative suggestions about how to achieve that vision.
  8. Cover the Basics. Make sure you cover all the basics, including property details, deadlines, clear submission requirements, contact information for questions, evaluation criteria, process, etc.  The RFP should be a user-friendly document that is easily navigable and not overly text-heavy.
  9. Actively Recruit. A common mistake among communities is to post the RFP and sit back and wait for interest to roll in. Be actively engaged in marketing the RFP. Explore third-party posting opportunities, identify priority local and regional developers and make a personal connection to introduce the RFP, host a developer event to launch the RFP via an in-person presentation and Q&A, host site-tours, etc. Simply put, be proactive.
  10. Be Thinking Ahead to Your Next Project. Collect all of the contact information from all respondents to the RFI, add to a CRM/email list, and stay in touch with this group via eNewsletter – keep them up to date on what’s happening in town in terms of real estate development so you’re in position to have strong interest in your next project.   

Contact Information

120 West Avenue, Suite 303
Saratoga Springs, NY 12866
518.899.2608
info@camoinassociates.com

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