Which came first – Development or Utilities?

In his 20+ year career in homebuilding, development, and commercial property investment, John Cook, President/CEO of Cook Bros. Homes, has found that often, the access to and cost of acquiring proper utilities is not on the radar of those outside the industry when thinking of development. Cost, location, and topography would likely be the top three choices if a poll were conducted on the street in Market Square. The need for electricity, water, sewer, gas, and communications just seems to fly under the radar, perhaps because these are often hidden underground and access to these just seems common.

If one was going to develop a piece of property for residential use, what would be the most important utility to have on or close to the site? If one would guess sewer, that would be correct. The access to sewer is what drives density, or in layman’s terms, the number of housing units allowed. Density is one of the key determining factors in the viability of a residential housing project due to the economics and cost to develop property. East Tennessee has challenging topography and geology; therefore, access to sewer is not near as widespread as one might think. Furthermore, extending or upgrading an insufficient existing line is very, very expensive.

If one was going to develop a piece of property for commercial use, what would be the most important utility to have on or close to the site? That answer is much less clear. This depends on the type of tenant that will occupy the space. Generally, commercial buildings need access to large amounts of natural gas and electricity. Water and sewer can be very important as well if it is a large office building or restaurant. Typically, a developer will identify an end-user (tenant) prior to developing a piece of property to ensure that the utilities that are most important to that tenant exist at the site. Again, extending or upgrading can be cost-prohibitive to a project moving forward.

In conclusion, what does this all mean? As we continue to entice businesses to locate here, encourage homegrown businesses to expand and attract more people to our incredible corner of the world to work and play, there is going to be a huge need for community leaders, utility companies, and developers to work together to identify solutions where gaps exist. Utility work is a slow-moving train, and it will take work to stay out in front of it. The opportunity for economic growth in our region is very strong, and taking advantage of the access to and availability of the proper utilities in the right places is crucial.