Planning Your Construction Before You Break Ground

A commercial building project is a substantial investment and a complex process. The list of factors to consider is lengthy and would take many volumes to cover them all. The first steps in a construction project are crucial to its success. The following is an overview of phases that need to take place before you break ground.


During the Preconstruction phase of a construction project you need to consider all the factors that will deliver the best value and reduce potential issues on your project. The first is location.Selecting the optimum site involves several factors:

• The size of the property

• The possibility of future expansion

• Zoning

• Adjacent utilities

• Easements

• Contamination issues

• Required setbacks

• Environmental permitting

• Applicable taxes


Next is permitting to assure that your new building meets all the local and state zoning regulations, such as:

• Wetlands permit

• Zoning variances

• Department of Transportation or County driveway permits

• Utility extension permits

• Stormwater permit

• Well or drainfield permit

• Plan review at the local or at the State level

• The process and time needed for site plan approval

• Plan review with your local health department for a food service establishment

• Fire sprinkler system requirement

• Elevator required

• Accessibility requirements

• Signage permit

Construction Financing

There are two different loan periods in construction financing. The first is a construction loan for the period during construction. The second is a permanent loan or a takeout loan after construction. Most often, an owner places financing through a real estate holding company to hold the construction property and the loans to limit the risk. A construction loan pays for up-front project costs. Upon construction completion, your building reaches stabilization. Stabilization is when your facility is worth more than the initial cost of construction. Your property is now considered quality collateral, making lending to you less of a risk. Certain types of property may not achieve stabilization until it’s reached a specified level of occupancy or rental income. There are many types of financing available, depending on the type of construction project, such as:

• Private financing sources

• Public sources of financing

• Federal programs for specialized projects

• State-by-state opportunities

Gundlach Champion has extensive experience helping clients across the Upper Peninsula of Michigan and Northern Wisconsin through the initial steps of a construction project. The GCI team brings over 350 years of combined experience to every commercial construction project, from new buildings to renovations. To discuss your next project, contact us at

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