Residential construction | Collaboration rather than confrontation

A real estate company proposes to play the role of intermediary between landowners and municipalities with the aim of delivering new housing that the market needs.

Andre Dubuc
The Press

AI Développement immobilier, a joint venture formed by two experienced players in the real estate scene, seeks to forge partnerships with landowners with the aim of developing overall plans acceptable to the cities concerned.

Benoît Lemieux, 53, son of the late Serge Lemieux, real estate developer from the South Shore, and Louis Conrad Migneault, 54, a longtime collaborator of the Lemieux family, are teaming up in this new adventure.

For 30 years, they have built some 10,000 homes in Quebec, Ontario, Poland, Florida, Texas and Colorado.

We must get out of the confrontation between promoters and cities, insists Louis Conrad Migneault. “For us, he says, the City is the client. And like all businesses, you have to satisfy the customer and you have to understand it. The City is bombarded with contradictory demands (social housing, green spaces, social acceptability, preservation of woods and wetlands, etc.). »

AI Développement immobilier’s business model consists of reaching an agreement with a landowner who wishes to optimize the value of his land. The two partners offered him to take steps in his name and at their own expense with the City in order to have an overall plan accepted and to obtain all the required permits. The objective is to come up with a profitable project for the owner of the land while being acceptable to the City and the citizens.

“I have noticed the growing frustration of developers with regard to municipalities,” said real estate marketing consultant Gilles Ouellet, who was present during the interview. He found the collaborative approach put forward so promising that he wanted to publicize it.

According to the two partners, the owner of the land receives a significant sum in the form of a deposit from day one. Then, they continue, they guarantee a minimum price. In addition, the owner does not assume any expenses related to the development and acceptance of the project. Finally, the owner has a good hope that the project will be realized quickly because of the approach advocated by AI Real Estate Development, the vast experience of the partners here and abroad and the technological tools that the two partners have refined over the years. These allow them to test innovative products beforehand with potential buyers or tenants. The final price of the land will be determined according to the density accepted by the municipality.

“The formula suits me perfectly,” says Martin Lévesque, owner of land on the South Shore. I signed with them a year ago. My land [coincé entre une autoroute et une voie ferrée] was zoned commercial with the possibility of building two floors. The urban plan which is now before the city council proposes to build 13 floors”, he rejoices.

Avoid overbidding

“There are two scenarios in a conventional transaction, explains Benoît Lemieux. First, the buyer agrees to pay the price asked by the seller conditional on a zoning modification for more density. The buyer will ask the seller for a one-year due diligence. The seller sees his land “frozen” and he has no certainty that the transaction will be concluded if the City and the buyer do not agree. »

In the second scenario, the seller obtains his price unconditionally. The buyer changes his mind and goes to the City with a knife between his teeth to obtain the required approvals. If ever it blocks, the promoter gets impatient, because he feels the pressure of his financiers. It is the clash between the City and the promoter; at worst, it ends in pursuit.

In both cases, summarize the two partners, there is no housing being built.

For Messrs. Lemieux and Migneault, the interest is to be able to control land to be built without going into overbidding and avoiding overpaying, since the selling price is dependent on the final authorized zoning.