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Stages of the budget process
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Physical Vs. Financial Aspects of Development
The physical- financial entity is a balance of two different components working towards the same common goal. Each one has their areas of focus and attributes to contribute to the project. If one has more influence than the other, an imbalance could occur and result in problems with the development and its success. The physical side must work with the architects, engineers, and construction team to create the schematic design and budget possibilities for the project in the predevelopment stage. This will include alternatives and rough preliminary designs. When the development moves over to the document development stage, they become responsible for the construction documents, budgeting, and schedules for the actual construction of the project. The financial side of the development involves the business side of the project. This is where the market and marketability studies will be conducted and various feasibility and investment analysis reports will be submitted. The financial entity of the development will continue to work through the predevelopment and document development stages to put forth the best suited analysis for the market, feasibility, and marketability studies.
The Physical side of the project contains two sectors: natural environment and urban linkages. Within the natural environment sector there is a focus on geology, soils, topography, climate and water, and plant/wildlife ecology. The urban linkage contains transportation, infrastructure, landuse and other regulations, and urban dynamics. The financial dimension of the model involves two sectors: space markets and money markets. Within the space market sector is use/type, price, geography, supply and demand, real estate cycles. Within the money market sector is OPM, equity and debt, public and private, and individual/institutional.
The physical side and the financial side have to work in a open exchange of information. The synergy of this project before it ever starts construction must come from the cooperation and adjustments made by both sides to create the best development. The physical side must take into account several things with the environmental sector. How can this site be used? What amenities or attractions can I draw from the existing environment? How can I improve the existing environment to create a more valuable development? The urban linkage must take into consideration how they are going to create their link to the surrounding environment and/or city.
In the past people were very concerned with their relationship with animals, but as their mindset shifted to productive space people became more concerned with the fertility of the land. Managed space focuses on industrialization. This mindset has little respect for the Earth. They look at the Earth to see what they can take from it that will be profitable. Managed space is the key to economic growth.
Before the author of this paper proceeds with this chapter, one has to define what development is. Put in simple terms, authors Peet and Hartwick , development economics is the part of economics that deals with how a developing country can improve its economy in terms of growth and better living standards and conditions for its citizens. This includes economic policies, education, health, and working conditions. All these factors are considered to be the minimum essential factors that all humans require to live. It can also be defined as the differing theories con-cerning growth, poverty, institutions, and inequality in the less developed coun-tries . Development economics also is also viewed differently according to different cultures as well
The first year becomes the operating budget for which subsequent years follow. However, the first year should only be used as a template for the following years, because there may be changes in priorities as well as an update in cost estimates for the implementation of the different projects. The implementation is linked to a strategic plan and community development which results in long-term planning and an establishment of city priorities. While the plan can be beneficial to the city’s citizens, the most important aspect of the plan is the funding allocated to the different projects. Funding typically comes from paying as the development happens, or through debt financing. Paying as the development happens is beneficial because there is no interest cost, no cost to issue debt, and no future burden. On the other hand, sometimes there are not enough funds to allocate as the project is implemented which limits the opportunities to be had. For debt financing, development is accelerated which results in proactive growth, development, and intergenerational equity. However, debt financing creates a fixed obligation, in addition to an added cost of interest and debt issuance. All in all, it is perhaps important to consider, that the money used on the front end or on the back end will be paid for by
Plug-in urban design is a category which usually focuses on the strategic building of infrastructure components in a city. Through the design, new infrastructure elements can be plugged into existing built-up areas in order to bind them into a unit and boost their amenity level. For instance, some streets, footpaths, city parks, exhibition grounds, or even mass transportation lines, can be added to the open space between the existing buildings. This design, thus, can be treated as an incentive for individual owner-builders or property developers to invest in new buildings. The cost of the new elements may be borne by the overall public or private project developer, as represented in the master layout plan for a site or by the developers of individual buildings.
In valuing the developable land at Canary Wharf, there are several factors to take into account. Namely, it is crucial to decide on an appropriate rate at which to discount the projected cash flows for the property. The developable properties of Canary Wharf come with considerable risk. For example, the London office market downturn, as well as significant market hits for the large financial services tenants of Canary Wharf, presents serious tenant lease up and lease covenant negotiation risks. How long will it take to attract quality tenants to the buildings, especially as financial services tenants are currently stressed? Additionally, the requirement for further planning consent on the buildings indicates that construction on three of the sites can not commence for a number of years. How can one accurately predict the market in the future? Will the London Office market significantly improve or continue to decline? What will interest rates look like? Songbird must consider the risk of valuing such sites several years into the future. Further, Songbird must consider the weighty transportation risk. If the Crossrail project does not come to fruition in a timely manner with necessary approvals, development will not proceed as planned, causing cost overruns and heavy construction delays. Assuming that Canary Wharf is able to get the necessary transportation approvals, Canary Wharf's projected cash flows should be discounted at 12.5% in order to mitigate risks to be faced. Given this discount rate, as well as considering all taxes, debt obligations, rents and rent-free periods, and all construction costs, an appropriate bid on the developable sites at Canary Wharf is ₤809,000 (the Net Present Value of the cash flows, discounted at 12.5%). Please see Exhibit 1 for a detailed pro forma of all projected cash flows.
Businesses face lots of challenges today during their development and growth, and they should decide how much financial investment are they want to put into the development of certain projects.
Maintaining a balance between urban development and natural systems is essential to ensure that, for example, soils are still able to buffer potential contaminants or that ground stability is sustainable for buildings and infrastructure. The land in 1867 was mostly being used for agricultural as farming was key to the primary industry. In 1916 the residential business has increased rapidly as an increase in human activity has resulted in a need for new homes. Then in this present day the industrial industry took a rapid boost as machinery was needed to provide a safe, efficient transport link (hub) for civilians.
However, there are some disadvantages in the processes. First, it is very consume time in the pre contract process due to the strategy is sequential and construction cannot be started before the completion of design. Also, the contractor is not appointed in the design stage, so the contractor and supply chain are no input into the design or planning of the project. Mo...
The small ripple created when the pebble hits the water can be a wave by the time it reaches the opposing shoreline. Likewise, in the planning context, the ripple effects of a new exurban shopping center, downtown high-rise or medical complex are felt far beyond any single neighborhood or city. The effects of development resonate beyond surrounding counties and metropolitan areas to impact the environmental, social or economic conditions region-wide. Planning at the regional level is critical. As our economic interdependencies, land use patterns and transportation networks have evolved over the last century, the regional context has become increasingly important.
Waterfront projects are usually master planned with a unified design theme undertaken to broken down into multiple development stages continued over many years. These parcels of land once industrial are rezoned and made viable for a range of different socio-economic opportunities. Considering these factors of long standing disinvestment and the rezoning, the most common challenges to be considered
There are underdeveloped areas that would benefit from this project. This is a low-cost way to make a large difference in the community. The storefronts and restaurants will bring new revenue into the neighborhood.
Because of this question, the financial cost of spaces exploration should be weighed as one of the most important influences when making decisions about the space
Consulting the community will be a two way interaction where the intentions are to make the people well informed and understand about the development plan. Other than that, is to receive feedback and getting rough ideas on what the thing that the community really want to see in their neighbourhood. This stage is also important in advising the people that their input will influenced the decision making process at the end. Rather than the usual meeting where everyone sit behind the tab...
Many investments for infrastructure construction in the destination primarily designed for the business tourists (hotels, restaurants, transportation…) provide economic profits, and they can also be enjoyed by local residents and leisure tourists.
Physical development also supports a child’s personal social and emotional development. If a child can participate in physical activity they learn about the environment around them. By being able to participate in team sports a child can increase in confidence and control (Nurse, 2009).