Question

Topic: Strategy

The Need To Kill A Real State Product

Posted by Anonymous on 3/15/2008 at 6:57 PM ET 250 Points
We are a construction company, one of the best but not very well known in the market because the owners always preferred to keep a low profile. 7 months ago we opened the real state branch and with the preliminary authorization of the city council we started the promotion and pre-selling of a beautiful enclosed neiborhood. This promotion was made through direct marketing in the local market and some mass media abroad. Fifteen days ago, the Mayor of the city called us to a meeting and informed us that they were unable to sign the final authorization due to a problem related with the development plans for that area of the city.
We did not start the construction as we were waiting the final signatures but we have an important group of people who made a reservation (they did not pay the 20% amount that we ask to start the construction yet) but we also have aliances made with banks and other financial institutions for their clients.

The process to solve the situation with the city hall can take 8 months. We have an interested buyer for that property and other projects that we can start inmediately similar to the first . But, what should we tell to our potential clients ? and to the banks ?

Thanks for your comments
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RESPONSES

  • Posted by CarolBlaha on 3/15/2008 at 7:15 PM Accepted
    Tell them the truth. Your project is experiencing issues with zoning. You don't have money in hand, so the client part is easy. The banks is another issue. This realy isn't a marketing question. Get a lawyer who knows the locals and can shorten your process time. City officials love to screw with projects that don't go thru them first. Its just a power play.
  • Posted by ilan on 3/15/2008 at 7:22 PM Accepted
    The truth, there is no other option...
  • Posted by Frank Hurtte on 3/15/2008 at 7:46 PM Accepted
    I agree with the other two respondents- the truth...
    But, there are versions of the truth.

    I would tell the story of your firm working hard on behalf of the clients and all involved. Of your intentions to do the right thing, even if it costs you money and opportunity.

    I would chart out a course for the future... And, here is where the marketing comes in:
    I would ask each and every person involved for their influence and support in presuring the city to do the right thing. Whether they stay in the project or not - they can still help you get the city to move quicker.

  • Posted by Inbox_Interactive on 3/15/2008 at 9:01 PM Accepted
    Any bank worth its salt won't loan you the money without the approvals in place.
  • Posted on 3/15/2008 at 10:00 PM Author
    Thanks very much to all. Your answers are very important to us because they confirm the actions we think appropriate to take. it is going to be hard and difficult but there is no other way. We are already being represented by one of the best law firms in the city and we will continue fighting.

    Regarding the banks our problem is not money as the project was going to be done with our own resources, but they started promotional actions with their clients with our advertising material and we feel that our image is going to suffer whatever action or explanation we take and give.

    We are also aware that there must be repositioning actions to think of as our firm image is going to suffer.

    thanks again and have a nice weekend
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