Because land is a limited resource, much development is re-development of land already built upon. Re-development expenses may include costs for demolishing existing structures and, sometimes, decontaminating or replacing polluted soil.

At a rate of return that compensates him for the risks associated with undertaking development, the developer discounts forecasted income and expenses back to the present. This process gives him a present value of the cash flows he forecasts for the project.

If the present value of the forecasted cash flows of developing or re-developing the land is equal to or greater than the current market price of the land, then developing the property is economically feasible. That is, the developer can expect to earn on his investment at least the rate of return that he used to discount forecasted cash flows.

Economic feasibility both constrains and liberates the design of a project. If expected future cash flows of expenses and income do not translate into an adequate rate of return, a developer will not undertake a project. At the same time, so long as proposed changes to the design and configuration of a project do not jeopardize its economic feasibility, a developer is free to make those changes.

If you are collaborating with the Aurora Companies on the design of a real estate development project, keep in mind that Aurora is freer to make changes that do not jeopardize the project's overall economic feasibility.

To generate income, a development project must create usable space that appeals to some combination of businesses and their employees, retailers and shoppers, hotel companies and guests, residential tenants or home buyers. Expected income depends both on the quality and appeal of the built space and on the amount of usable space created.

On complex developments, developers typically do not begin construction until they have preleased or presold 50% to 75% of the planned space. As part of preleasing or preselling space, developers negotiate space design with prospective final users. Thereby developers and users can ensure that the built space conforms to final users' needs and wishes.When you think of development design as a collaborative process, remember that final users are important collaborators.

At Aurora, we invite prospective final users to attend our community meeting, make presentations about what they seek in usable space and share their thinking with community residents and with city and county officials.

If you have design changes in mind and package them in a way that increases the appeal of the usable space to final users, increases the amount of usable space or reduces expected expenses, then Aurora is more likely to be able to incorporate into the project the design changes you propose.

Often Aurora is able to act on imaginative and dramatic changes that collaborators propose to projects. On several occasions, Aurora has been able to swap pristine land it owns for brown-site land that a city owns. Aurora developed the brown sites. The cities were able to turn the pristine land into nature preserves with public access for recreational use.

The constraint of economic feasibility doesn't mean you have to think small. It means you have to think in ways that generate a positive cash flow for the developer.

If the design changes you propose will make the built property more appealing to prospective tenants or owners, then your changes increase the economic feasibility of the project. Sometimes the most imaginative and dramatic ideas are the most economically feasible of all.