Communication, the Secret Weapon for Successful Due Diligence and Risk Mitigation
Typically, we begin with the pre-development phase of a project. That is when land is acquired, contractual agreements are negotiated, and project boundaries are being solidified. The objective is to really understand all facets of the site. Then we move into what we call pre-construction, which is in anticipation of financing for construction. At that point we become focused on the notice to proceed or NTP that will be given to the EPC or contractor to begin construction of the project. NTP triggers a series of important questions. Our construction contractor will want to know what the design is; do we have all of the necessary rights; do we understand the title insurance; what is the status of the ALTA survey and does it contain all of the encumbrances affecting the property; have we looked at the design and has it been embedded into the ALTA survey, so that our design can be carried through. Then comes the financing, that is where the rubber hits the road in terms of getting all of the due diligence pieces together.
We have a protocol that we like to follow, and we have certain checklists that cover every aspect of the process. We work very closely with all parties to educate them, so that they understand the scope of the project. This helps to mitigate costs and ensures that everyone is working from the same sheet of music. Then construction commences and we follow the project to ensure that everyone: EPC, design team, ALTA surveyor, know what the plan is and how the project will be constructed. Ideally, we have ongoing conversations with all stakeholders during that phase. Things change in the field during construction, so we need to make sure that we’re communicating about of those changes. Our schedules travel with the project. It is one thing to be on the front end and negotiate the leases, but it’s another thing to work on operations and be involved in the execution and compliance of the agreements. That’s why communication is our secret weapon. Throughout all phases of the project, we make sure that critical information is transmitted to all stakeholders from the inception of the project through completion.