Skip to content U.S. Department of Transportation/Federal Highway AdministrationU.S. Department of Transportation/Federal Highway Administration

Office of Planning, Environment, & Realty (HEP)
PlanningEnvironmentReal Estate

HEP Events Guidance Publications Awards Contacts

Right-of-Way Research

State Right of Way Pilot Projects 2003 Report

Overview of 12 Pilots undertaken after the 2000 Right of Way and Utilities European Best Practices Scan

1. SOUTH CAROLINA Appraisal Waiver Threshold Pilot [i]

The DOT initiated the $20,000 appraisal waiver program, two changes. The threshold for offers of JC based on approved cost estimates was increased to $20,000. Appraisal reviews are waived on appraisals of $20,000, or less, if the original offers of JC were based on the approved cost estimates. The condemnation rate decreased 1%. Dollar savings for the parcels in study are estimated at $115,000. SCDOT plans to request to maintain the $20,000 cost estimate offer policy and permanently waive the review of all appraisals of $20,000 or less. SC DOT will monitor its appraisal process to assure quality appraisals are prepared.

Contacts: Mel Cooper, FHWA (803-253-3877), or Rick Callaham, SCDOT (803-737-1400)

2. WASHINGTON STATE Appraisal Review Modification Pilot [ii]

The State has had trouble funding projects for the last two years. Few projects met the criteria outlined in the pilot program. They plan to move forward with 2 appraisals and apply the modified review criteria. It may not be possible to get meaningful results but there may be helpful feedback in the negotiations.

Contacts: Dave Leighow, FHWA (360-753-9486), or Gerry Gallinger, WSDOT (360-705-7305).

3. MISSISSIPPI Land Consolidation Pilot [iii]

As of January 2003, the Mississippi DOT is considering using the land consolidation technique in the I-69 corridor. Numerous public meetings have been held that were well attended by the affected farmers in the I-69 corridor. The DOT offered to broker voluntary land acquisitions and will continue to investigate what role the DOT should play as this project evolves.

Contact Cecil Vick, FHWA (601-965-4217)

4. FLORIDA Acquisition Incentive Pilot [iv]

Initial offers were modified to include an additional amount above recommended compensation as an incentive for early settlement. The incentive offer amount is taken from a sliding scale based upon the appraised value of the parcel. The scale was developed using historic costs of acquisition. The incentive offer remains open until the Department files for condemnation. The following table compares the control and pilot projects by district.

District Two Control
2102531
Pilot
2099991
Statewide
Historical
Total Number of Parcels on Project 67 51  
Percentage of Parcels Negotiated 54% 78% 65%
Percentage of Parcels Condemned 28% 10% 35%
Percentage of Parcels Voided or Donated 18% 12% -------
       
Number of Parcels Acquired thru Negotiations 36 40 --------
% Parcels Settled at Appraised Value 36% NA -------
% Parcels Settled at Appraised Value w/Incentive NA 95% -------
% Parcels Settled with Administrative Increase 64% 0% -------
       
Avg. Appraisal Amount per Negotiated Parcel $10,576 $15,688 $77,393
Avg. Settlement Amount per Negotiated Parcel $13,906 $23.075 $122,299
Avg. Percentage Increase per Negotiated Parcel 31% 47% 58%
Avg. Attorney Fee per Negotiated Parcel ------- ------- -------
       
Avg. Number of Days elapsed from I.N. to Closing 156 77 -------

District Four Control
2294991
Pilot
2302882
Statewide
Historical
Total Number of Parcels on Project 120 91  
Percentage of Parcels Negotiated 37% 10% 65%
Percentage of Parcels Condemned 47% 3% 35%
Percentage of Parcels Voided or Donated 16% 3% --------
Percentage of Parcels Currently Open 0% 84% --------
       
Number of Parcels Acquired thru Negotiations 44 9 --------
% Parcels Settled at Appraised Value 23% NA -------
% Parcels Settled at Appraised Value w/Incentive NA 100% -------
% Parcels Settled with Administrative Increase 77% 0% -------
       
Avg. Appraisal Amount per Negotiated Parcel $44,971 $10,911 $77,393
Avg. Settlement Amount per Negotiated Parcel $53,588 $17,360 $122,299
Avg. Percentage Increase per Negotiated Parcel 19% 59% 58%
Avg. Attorney Fee per Negotiated Parcel ------- ------- -------
       
Avg. Number of Days elapsed from I.N. to Closing 288 215 -------

District Five Control
2386772
Pilot
2394161
Statewide
Historical
Total Number of Parcels on Project 144 111  
Percentage of Parcels Negotiated 62% 50% 65%
Percentage of Parcels Condemned 11% 29% 35%
Percentage of Parcels Voided or Donated 2% 11% --------
Percentage of Parcels Currently Open 25% 10% --------
       
Number of Parcels Acquired thru Negotiations 89 55 --------
% Parcels Settled at Appraised Value 10% NA -------
% Parcels Settled at Appraised Value w/Incentive NA 94% -------
% Parcels Settled with Administrative Increase 90% 4% -------
       
Avg. Appraisal Amount per Negotiated Parcel $42,230 $81,671 $77,393
Avg. Settlement Amount per Negotiated Parcel $75,022 $103,505 $122,299
Avg. Percentage Increase per Negotiated Parcel 78% 27% 58%
Avg. Attorney Fee per Negotiated Parcel ------- ------- -------
       
Avg. Number of Days elapsed from I.N. to Closing 272 163 -------

ll the Pilot projects have shown a reduction in the time to acquire the parcel. This ranges from a reduction of 25.4% in District 4 to 45.5% in District 2. In general, attorney fees are reduced by 33% of the amount of the incentive. When the final cost is known, they will be able to quantify the final savings. In the customer satisfaction survey the overall average score of 4.61 on a scale of 1 to 5 remains a solid score for the Pilot projects. The District 4 project probably has shown the most prominent lesson. This project is located in an area with rapidly rising real estate values. In this type of market, the incentive offer may not be very useful. The owner only has to delay the acquisition in order to see the Department's offer increase due to changing market conditions.

Contacts: Brian Telfair, FHWA (850-942-9650 x3060), or John Garner, FL DOT (850-414-4558)

5. WISCONSIN Appraisal Review Modification Pilot (ii)

As of March 25, 2003, one project is underway with 100 parcels. The first 50 parcels were done using the old procedure and will be the control project. The next 50 parcels will be done using the raised threshold. Information is not available to report.

Contacts: Roger Szudera, FHWA (608-829-7508), or Rebecca Krugman, WisDOT (608-266-2362)

6. FLORIDA Appraisal Review Modification Pilot (ii)

A modified appraisal review process is using high-tech software, flags areas where additional support is needed. The requirement of a standard appraisal review is waived and an alternative computer generated Statistical Process Control (SPC) program, is under study. The intent of the SPC is to provide FDOT with a method of measuring core processes by identifying and measuring key appraisal information and comparing that information with statistical standards. The desired result is a comprehensive evaluation of the appraisal product, a high level of quality control, and optimization of personnel resources. The following are time savings in days and cost savings between receiving the appraisal to its approval.

  District 3 District 7
Tme (pilot/control) 9.62 / 33.59 10.71 / 36.03
Cost saved attributable to electronic review: $285,000 $143,500

Contacts: Brian Telfair, FHWA (850-942-9650 x3060), or John Garner, FL DOT (850-414-4558)

7. FLORIDA Appraisal Waiver Pilot (i)

On 1-10-03, the Division Office concurred with FDOT's increase in the Appraisal Waiver threshold from $10,000 to $25,000. This was done pursuant to FDOT's authority under the Statewide Right of Way Certification (Section 103 of the Uniform Act and 49 CFR 24, Subpart G). For the pilot, FDOT is tracking and reporting data for the previously approved $20,000 appraisal waiver. FDOT has implemented this program by use of the Agent's Price Estimate (APE), a format used to construct a good faith offer, increasing the ceiling of an APE to $20,000 and evaluating its effect on costs, production, and customer satisfaction.

The following provides status and performance reports from Districts 3 and 5.

  District 3 District 7
Number of parcels 553 738
Total number of APEs prepared 111 62
Total number of APEs $10,000 or less 94 54
Total number of APEs $10,001 to $20,000 17 8
Total negotiated settlement % per District   55% 70%
Negotiated settlement % for parcels initially Appraised   45% 63%
Negotiated settlement % for parcels initially done by APE 91% 98%
Negotiated settlement % for APEs $10,000 or less 93% 98%
Negotiated settlement % for APEs $10,001 to $20,000 79% 100%
     
Time-savings through implementation of APEs 3,558 hrs. 1,736 hrs.
     
Dollar savings (Appraisal and Review) using APEs $444,000 $295,000
Savings (Appraisal and Review) $10,000 or less $376,000 $243,000
Savings (Appraisal and Review) $10,001 to $20,000 $68,000 $52,000

Contacts: Brian Telfair, FHWA (850-942-9650 x3060), or John Garner, FL DOT (850-414-4558)

8. CALIFORNIA Conflict of Interest Pilot [v]

Conflict of Interest - Same Person will Appraise and Negotiate on Properties Exceeding $10,000 up to $25,000. Each Caltrans district was authorized to adopt this procedure on one project. The action portion of the pilot on five projects is complete. The evaluation phase, which includes studying billing and financial data, has not started. Caltrans does not have enough information to share at this time.

Contact Bill Todd, FHWA (916-498-5011)

9. MICHIGAN Appraisal Review Modification Pilot (ii)

The Michigan DOT Pilot called "Waiver of Appraisal on Parcels that are 10% of the Before Value" has not proceeded. No parcels have been acquired using this program as of March 24, 2003. Michigan DOT's appraisal waiver limit is set at $25,000 as of March 19, 2003.

The "Waiver of Appraisal Review on Appraisals of Non-complex Parcels pilot" was used on four right of way acquisition jobs. These were compared to the control, M-84 Phase 1 in the Saginaw region. There was considerable time saved on the pilot program projects. The condemnation rate remained unchanged at 8%. There was an average savings of 61 days when using the waiver of review. $3000 saved per parcel. On non-complex parcels, a formal written review adds little value, is costly and takes considerably longer. Little change in the condemnation rate or administrative settlements, compared to the control or other typical projects, was observed.

Contacts: Charlie O'Neill, FHWA (517-702-1839), or Eric Smith, MI DOT (517-373-4143)

10. VIRGINIA Relocation Incentive Pilot (iv)

This was the early move incentive program on the Woodrow Wilson Bridge Project that started 4-30-01 (1st incentive claim processed; tenant moved April 7, 2001) and ended 4-22-02 (last incentive claim processed; last tenant moved December 2001). VDOT successfully relocated 403 tenants in 8 months - significantly less time than originally scheduled. The Relocation Incentive Program was a major factor in getting the project back on schedule and minimizing additional delays. The incentive program cost the project approximately $1.2 million. This was more than offset by construction schedule-related savings of approximately $6 million. In addition, if relocations had been delayed and as a direct result, the opening of the new bridge delayed, the VDOT could have been assessed a $50,000/day penalty by the Maryland State Highway Administration until the new span was accessible. And there was reduced property management overhead cost for the condemned properties during the relocation period. Southern span projected to open for traffic 2006. Final completion expected 2008.

Contacts: Barbara Middleton, FHWA (804-775-3341), or Stu Waymack, VDOT (804-786-2923)

11. NORTH CAROLINA Appraisal Waiver Threshold Pilot (i)

The appraisal waiver threshold amount is raised to $25,000. Time Savings: 25% of claims settled on initial contact; 50% of claims settled within 1 month; 25% of claims settled with 6 months. Cost savings to be determined.

Contacts: Mike Dawson, FHWA (919-856-4336 x127), or John Williamson, NCDOT (919-733-7932 x315).

12. VIRGINIA Preliminary Engineering Utility Cost Reimbursement Pilot [vi]

Reimburse utilities for 100% of the preliminary engineering cost incurred on a VDOT roadway improvement project. In 2002 VDOT authorized reimbursement on 50+ projects. We have noticed a small but steady increase in timely response and receipt of the plan and estimates from the utilities and their consultants. The VDOT project workload has been reduced in the last two years so a good response is not available at this time. However the utilities view this as a very important step by VDOT in helping them meet the engineering demands for their relocations. The utilities have down sized their engineering staff so when our workload returns we expect great benefits from this.

Because of a reduced workload, Virginia is unable to determine a monetary savings as a direct result of this pilot program. Utility claims, which were mounting in the millions annually, have clearly been reduced; but much of the reduction can be traced to fewer projects. However, there is no question that the program is looked upon favorably by the utility industry as they are also reducing forces. Overall, the FHWA pilot program for payment of these costs has resulted in a faster turn-around in reducing utility conflicts, which is aiding our ability to meet the advertisement schedules advertisement of projects.

Contact Stu Waymack, VDOT (804-786-2923) or Greg Wroniewicz (804-786-2931)

ENDNOTES

Given the overview of the 12 R/W and Utility pilot projects undertaken, they can be grouped in 6 different areas as follows:

  1. Enhanced Appraisal Waiver Threshold Pilot (FL, MI, NC, SC)
  2. Appraisal Review Modification Pilot (FL, MI, WA, WI)
  3. Mississippi Land Consolidation Pilot (MS)
  4. California Conflict of Interest Pilot (CA)
  5. Florida/Virginia Acquisition/Relocation Incentives Pilot (FL, VA)
  6. Virginia Preliminary Engineering Utility Cost Reimbursement Pilot (VA)

Within this context the following endnotes reference the origin of the various concepts utilized in the design and development


[i] Enhanced appraisal waiver limits pilots are based on the general flexibility observed in all of the countries visited to innovatively approach valuation problems and to gauge the appraisal report documentation to the valuation problem.

[ii] The experimentation with the appraisal review modification was patterned most closely to the model used by England in the UK. In their process the appraisal review process was non-existent. Other countries visited utilized an appraisal review on a risk management basis, requiring a secondary review only in extremely complex or high value cases.

[iii] The land consolidation pilot closely follows the models observed in Norway, Germany and The Netherlands. The one exception to the process developed by FHWA for use in the United States is that it is voluntary and does not include judicial enforcement unless a state has the legal authority and would want to impose it in a given situation.

[iv] Acquisition/Relocation incentives experimentation was designed along the lines of all of the European programs studied which afforded greater flexibility to develop creative solutions to resolve schedule problems and to deal with large volumes of owners/relocatees/transactions.

[v] Enhanced conflict of interest limits are primarily developed around the process used in the UK where one person, the surveyor (appraiser), performs all of the functions in the acquisition process. This experiment does the same thing except within a very restricted scope. Other countries visited also had greater flexibility than in the U.S. to use a single agent to perform multiple tasks, but not to the extent that was observed in England.

[vi] Preliminary engineering utility cost reimbursement in Virginia is modeled after a process for cost sharing observed in England in the UK.

Updated: 04/02/2013
HEP Home Planning Environment Real Estate
Federal Highway Administration | 1200 New Jersey Avenue, SE | Washington, DC 20590 | 202-366-4000