I want to make sure that we're getting a fair deal with good contract terms. They are asking for exclusive rights to the land (much larger than their 10 acres) for a 25 year term. I also don't know how to begin researching competitive pricing for a project like this. We will be leasing the land.
The next step is rudimentary due diligence. Ask for a list of portfolio projects that demonstrate a track record of success with similar development projects. The thing to know is that you don't want to deal with amateur developers or professional grifters (or amateur grifters for that matter).
Lastly (relative to before the beginning). If you decide you want to "sell", talk to a real estate attorney...or rather your real estate attorney. Putting "solar development" on your land may not even be legal (though it might) and the terms offered by a "solar developer" may not be very good (though there's a slim chance they are).
To put it another way, real estate development is about floating ideas and seeing what sticks and then it's often a matter of being overly optimistic when spending other people's money. To a first approximation, most real-estate development deals don't happen.
Good luck.
We are interested in leasing the land. One thing that they did explicitly write out was that they would be responsible for returning the land to it's original condition so that's not as much of a worry.
The developer did provide us with a brief resume, but I'll be sure to get more specific.
That's some good insight into the development process and thanks!
A great deal of real-estate development happens via limited partnerships. These are specifically designed to be easy to terminate. Real estate development projects are often designed to be sold on and then the LP folds.
Suppose the lessee doesn't restore the landscape at the end of the lease. Is your organization willing to lawyer up?
Will your organization necessarily benefit from returning the land to its original condition? The value of the land with the lessee's improvements may be higher than in the original condition.
Finally, is leasing the land for an industrial process really consistent with the long term vision and mission? The feel good of green energy promises shouldn't outweigh those values. A project that requires a subsidy to be feasible is less likely to be viable over the long run. By which I mean, if your organization doesn't lease the land, the developer should still be able to make a go of their project via an ordinary real-estate transaction. If the developer cannot, it's a red flag on their pro forma.
Are they going to start a competing farm? :P
Apologies if that was unclear.
Edit The line in their proposal that's concerning is "Exclusive right to property to construct and operate the solar farm"
I don't know if that extends beyond the 10 acres they want to lease or not.
Try the State Bar for a referral, ask for any specialists in solar >http://www.msba.org/default.aspx
Then ping the attorney, ask for a brief 10-15 minute call. You may be surprised to find some helpful ones. Those will be the individuals you shortlist for a retainer. More importantly, a good attorney will help protect your lessor rights.
I would think of this like mineral rights. Mineral rights on land is distinct from other uses of the land and can be sold separately.
If there is a lot of money at stake, consider taking the contract to a lawyer specialized in land use laws. I would do everything in my power to lease them only exclusive rights to developing the solar potential of the land and keep the right to also do other things with the land that do not interfere with their solar power development.
