Entitlement and Permitting Due Diligence



7-Eleven hired EMG to perform entitlement and permitting due diligence for the construction (tenant improvement) of a new store. 7-Eleven was to lease a space in a new strip center that was to be developed by the landlord. The entitlement and development of the strip center was the landlord’s responsibility.


EMG’s investigation determined that the site plan being proposed would require a Specific Plan Exception of which the landlord was not aware and had not sought to obtain. If the exception failed to be granted, the layout would require changes that would force 7-Eleven to walk away from the deal. EMG also determined that the landlord had made minimal progress with the Planning commission for approval of the overall development. EMG became deeply involved in the monitoring of the progress by the landlord and continued to advise 7-Eleven on the potential issues with the project due to the lack of experience and progress by the landlord. With EMG at their side and after numerous discussions and negotiations with the landlord, 7-Eleven elected to stop paying for any more extensions to the due diligence period. 7-Eleven instead decided to renegotiate the entire deal based on EMG’s findings, saving themselves thousands of dollars by avoiding a Letter of Intent insufficient to address the project complexity and lack of commitment by the landlord.