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2008 FHWA Incentive Payments Peer Exchange Report

On August 13 and 14, 2008, the Federal Highway Administration (FHWA) Office of Real Estate Services facilitated a peer exchange to share information on use of relocation and acquisition incentive payments. Guidance issued April 26, 2006, on use of incentives can be found at http://www.fhwa.dot.gov/real_estate/practitioners/uniform_act/policy_and_guidance/acqincentguid.cfm.

Several State Departments of Transportation (DOTs) have made use of incentive payments and shared their insights and lessons learned. Each DOT set up a process and received approval by the FHWA Division office. It is important to note, as you read through the following summary of presentations and discussions, that each agency developed a unique procedure that reflects its needs. The FHWA does not recommend one procedure over another, and use of incentive payments by an agency is voluntary. The participant list at the end of the report contains contact information.

Wednesday, August 13

Welcome and Introductions
Virginia Tsu, FHWA Oregon Division Realty Specialist
Gerald Solomon, FHWA Director Office of Real Estate Services
Deolinda Jones, Oregon DOT Right of Way Manager

Overview and Background of the FHWA Policy
Kathleen Facer, FHWA HQ Realty Specialist

Florida DOT Acquisition Incentive Program
Kenneth Grimes, Florida DOT Deputy Manager Acquisition
Thomas Shields, Florida DOT Manager Appraisal and Appraisal Review

FDOT Pilot Procedures

FDOT Pilot Results

FDOT Full Implementation

Approved Compensation is:

Over But Not Over Incentive of Amount Over
$0
$1,000 $1,000  
$1,000
$2,500 $1,000 + 83.3% $1,000
$2,500
$5,000 $2,250 + 70% $2,500
$5,000
$7,500 $4,000 + 50% $5,000
$7,500
$10,000 $5,250 + 45% $7,500
$10,000
$20,000 $6,375 + 40% $10,000
$20,000
$30,000 $10,375 + 35% $20,000
$30,000
$100,000 $13,875 + 32.5% $30,000
$100,000
$300,000 $36,625 + 30% $100,000
$300,000
$513,500 $96,625 + 25% $300,000
$513,500
  $150,000  

Virginia DOT Relocation Incentive Project
Joy Layne, Assistant Program Manager

In Virginia, the Woodrow Wilson Bridge Project was the largest bridge project in the U.S. It was 7.5 miles long and a major I-95 link on the east coast. Relocation included 333 tenants in apartment towers. The original 18 month relocation schedule was reduced to 8 months, therefore VDOT decided to offer a relocation incentive. VDOT already owned the property before the tenants moved. Replacement housing was identified prior making to the relocation supplement (RHP) and incentive offers. If the relocation was conducted within 30 days of the RHP offer, then tenants received $4000 (283 tenants qualified). If the move took place 31-60 days after the RHP offer, the tenant received $2000 (15 tenants qualified). There were no exceptions. It was voluntary and the payment was in addition to the RHP amount to which the tenants were entitled. The dates the RHP offers were made were staggered in order to provide for orderly relocation. The RHP offers were high (ranging from $11,000 to $42,000), based on low income levels and rental rates that were low on the displacement units while comparable rental rates in the Northern Virginia area were much higher.

VDOT located 25 comparable rental units in the area and used protective rent to hold these open and make them available to tenants if they chose to relocate to them. Few of the protective rental units for which VDOT arranged to be held open were used. VDOT hired a right-of-way consultant firm who used 19 relocation agents to prepare the relocation housing supplement offers and assist the tenants. A second right-of-way consultant firm was hired to review the RHP offers. Many displacees moved to temporary quarters with relatives in order to qualify for the incentive payment and moved into their final replacement housing later. VDOT paid for one move only. Almost half of the displacees (169 tenants) purchased homes using the downpayment option.

While incentive payments of $1,162,000 were paid, the total estimated project cost savings was $4,839,278 and this was considered a total success. There were increased ROW costs but these were offset by project savings.

VDOT has used relocation incentives on another project that affects 44 businesses. On this project VDOT offered $100,000 to businesses that completed the move by day 30 after the relocation was approved; and $50,000 to businesses that completed the move by day 60. 18 or 19 businesses qualified for the $100,000 incentive payment.

Indiana DOT Incentive
Steven Penturf, Indiana DOT Acquisition Administrator

Indiana Acquisition and Relocation Incentive Program
Potential time savings is the main criteria to qualify a project to use the incentive payments. The property owner needs to accept and qualify for both the acquisition and relocation incentive payments or they are not eligible to receive either of the incentive payments. The incentive offer does not affect their entitlements. For relocation, the incentive plan is based upon the cost of the move estimate; and it is based on a scale depending on how long it takes to move.

Fee simple acquisitions are offered an additional 10% of the acquisition amount, or a minimum $3,000; maximum $100,000.
Temporary easements are offered an additional 10% with a $1,000 minimum and $10,000 maximum amount.
Relocation incentives are 10% of the approved actual moving cost estimate or scheduled moving cost, or combination of both; $5,000 minimum / $100,000 maximum.

Personal property only moves are 10% of the approved actual moving cost or scheduled moving cost, or combination of both; $1,000 minimum / $100,000 maximum

The administrative settlement rate is probably down. Mr. Penturf did not know of any administrative settlements used when the incentive payment was used. A separate 1099 is provided for the incentive payment. .

Florida Consultant Projects
Richard Moeller, O.R. Colan Associates

Lessons Learned

Lambert Field - St. Louis International Airport, St Louis Missouri
Richard Moeller, O.R. Colan Associates
A relocation move incentive payment was used for this airport for an area that was needed for early construction access. If tenants moved 60 days ahead of schedule (after the replacement housing supplement offer was made), they received $2000; this was reduced to $1000 if they moved 30 days ahead of schedule. Both temporary and final moves were paid for by the agency. All occupants (16 displacees) participated in this successful incentive program.

Texas DOT Continued Occupancy Relocation Incentive
John Zimmerman, Texas DOT Acquisition Director
John Reed, Texas DOT Relocation Director
Texas DOT is using a Continued Occupancy Incentive. The idea is to keep people in occupancy of the property until TxDOT is ready to take possession of the property. It does not affect other benefits. They need to make sure that replacement housing is still available, as calculated for the original RHP. They have to stay until TxDOT takes possession, or they forfeit the incentive payment. This can address the property owner concerns that the project will cause the tenants to relocate long before the property is acquired, so the owners would not give TxDOT a list of tenants. TxDOT is able to show the owner that they are trying to keep tenants in place.

It’s been used on two projects, and it is an approved procedure in the TxDOT right-of-way manual. If this incentive is going to be used, it needs to be used project-wide. This incentive is used instead of protective rent, which is not allowable under TX law.

Wisconsin DOT Incentive
Norman Pawelczyk, Wisconsin DOT NE Region ROW Program Manager
The Wisconsin pilot had one project with acquisition and relocation incentive payments along side a control project. Both projects had a similar scope (widening from 2 to 4 lanes), bypasses of smaller communities, and a similar number of relocations. Both purchase and relocation incentives were offered. They met with property owners one year in advance of the project to explain the incentive program and overall project. Agents and engineers attended the meeting.

There was a clear benefit as all transactions were completed more quickly than usual. The DOT felt that the relocation agents did a good job of explaining the benefits and the owners and tenants made decisions in a timely fashion. This saved agents’ time which could then be directed to other projects. Set $ amounts were provided for residential incentives. Business-owner purchase incentives were based on a percentage of the offer. Relocation is based on rent or minimum amount, on different schedules based on time it takes a business to move. They require the property owners to initial on three statements.

WI Acquisition Incentive Offers

WI Residential Owner Relocation Incentive Offers

WI Residential Tenant Relocation Incentive Offers

WI Business Relocation Incentive Offers

WI Business Tenants


Thursday, August 14

FHWA Oregon Division Administrator
Phillip Ditzler, FHWA Oregon Division Administrator
Phil thanked Gerry Solomon for sponsoring the peer exchange and Dee Jones and the Oregon DOT for organizing the logistics and hosting. His hope is to find ways to deliver highway projects faster, and meetings, such as this, offer opportunities to share how different States are working.

Roundtable: Questions/ Answers/Ideas
Kathleen Facer, FHWA HQ Realty Specialist

Florida DOT
FDOT does not have a law that specifically addresses use of incentives, however, it does not have a law that prohibits using incentives. Relocation is not typically on the critical path and that is why they have not used relocation incentives yet. There are no State statutes that differ from Federal statutes - so they have to pay at least as much as the Uniform Act requires. Under State law, they have to pay move costs for non-federal-aid projects.

The FDOT management has asked the right-of-way managers to develop procedures for use on non-federal-aid projects. For instance, properties under $100,000 would not be appraised. For relocation, they would offer an incentive or schedule amount in lieu of actual moving costs. For instance, they would offer $40,000 if the property owner can move in 30 days. These procedures have not been implemented because they need Federal concurrence to retain federal-aid eligibility. They do not have a State law that requires the FDOT to conduct an appraisal if the owner requests one when they are using an appraisal waiver. They do bi-annual quality reviews of appraisals. They store all appraisals electronically, and use them to create case studies where they have district, local public agency, and consultant appraisal staff meet to discuss appraisal problems.

Virginia DOT
The Virginia statutes mirror the Federal statute, except the in lieu of actual moving cost payment has a $75,000 limit and reestablishment cost is $25,000.

Indiana DOT
Indiana does not have a statute that prohibits incentives. They have a 10 year business plan to spend $4B. They use acquisition and relocation incentives on projects where the total project cost is over $25M. Incentives are used for both residential and businesses. They have not used incentives on businesses very often to date.

Wisconsin DOT
They did not break any rules to use incentives; they just had to define their process as required by the FHWA Division office. Using incentives provides a way to manage risk and to allow for the expeditious acquisition of property needed for transportation projects.

TxDOT
Texas state law does not require an appraisal. They find that districts want to keep pushing to be able to approve administrative settlements at higher and higher levels. Once the word gets out to owners that TxDOT will provide administrative settlements for each transaction, the ROW costs will rise. Is the time savings worth the increased ROW cost? How does one determine overall project savings?

Dave Leighow, FHWA
How about considering an incentive to address business down time when they are preparing for and completing the move. This incentive would have to be worded such that it would not be characterized or considered lost income. It needs to be structured specifically to the needs of the DOT.

TxDOT
Consistency of use by consultants is not always there. This may become more of a problem as they use more consultants. Whenever State DOTs ask to increase the Uniform Act dollar limits, other non-transportation Federal agencies are successful in stopping change. Since State DOTs seem to be the major agencies performing relocations (especially nonresidential), TxDOT thinks transportation agencies should have more influence on making changes to the Uniform Act. This is especially true when many non-transportation agencies make liberal use of the voluntary transaction provisions and, therefore, do not make many relocation payments at all.

Utah DOT
Utah is using design-build on most projects. The ROW office is very active in developing the request for proposal (RFP), but they need to closely track what the engineers are doing to make sure the engineers are not making unilateral changes to the ROW portion of the RFP. Local agencies have to follow the Utah DOT written procedures unless they write their own. So far, this has not been done, but they are expecting this to change. There is something coming that may require State funded projects to use different procedures.

WA DOT
They want to take another look at incentives after hearing other State experiences. The Washington State DOT Southwest Region is considering a possible incentive project. Previously, they were not sure of the benefit but they will reconsider.

STEP Research
Two potential peer exchange ideas are visualization tools to use with property owners (MN) and design-build (UT and TX).

Peer Exchange Key Points and Wrap-Up
Mary Jane Daluge, FHWA HQ Realty Specialist
David Leighow, FHWA HQ Realty Specialist
Lessons Learned

Incentive Payments Peer Exchange Agenda

Wednesday, August 13

7:00-8:00am Continental Breakfast Available in Salon A & B
The wonderful Oregon DOT is providing for your breakfasts and breaks.
8:00am Meet in the Marriott Conference Room Salon A & B
Casual attire is acceptable, please be comfortable.
8:00 - 8:30 Welcome and Introductions
Virginia Tsu, FHWA Oregon Division Realty Specialist
Gerald Solomon, FHWA Director Office of Real Estate Services
Deolinda Jones, Oregon DOT Right of Way Manager
8:30 - 9:00 Overview and Background of the FHWA Policy
Kathleen Facer, FHWA HQ Realty Specialist
9:00 - 10:00 Florida DOT Acquisition Incentive Program
Kenneth Grimes, Florida DOT Deputy Manager Acquisition
Thomas Shields, Florida DOT Manager Appraisal and Appraisal Review
10:00 - 10:30 Break
10:30 - 11:30 Virginia DOT Relocation Incentive Project
Joy Layne, Assistant Program Manager
11:30 - 1:00 Lunch On Your Own
1:00 - 1:30 Indiana DOT
Steven Penturf, Indiana DOT Acquisition Administrator
1:30 - 2:30 Florida Consultant Projects
Richard Moeller, OR Colan Associates
2:30 - 3:00 Break
3:00 - 4:00 Wisconsin DOT
Norman Pawelczyk, Wisconsin DOT NE Region ROW Program Manager
4:00- 5:00 Texas DOT Continued Occupancy Relocation Incentive
John Zimmerman, Texas DOT Acquisition Director
John Reed, Texas DOT Relocation Director
5:30 Hospitality Suite - Informal
Oregon DOT is providing snacks and an opportunity to network. Dee Jones will announce where the hospitality room is located.

Thursday, August 14

7:00-8:00am Continental Breakfast Available in Salon A & B
8:00am FHWA Oregon Division Administrator
Phillip Ditzler, FHWA Oregon Division Administrator
8:10- 8:20 Where We Are and Next Steps
Kathleen Facer, FHWA HQ Realty Specialist
8:20 - 10:00 Roundtable: Questions/ Answers and New Ideas
Everyone will have an opportunity to be heard.
10:00 - 10:30 Break
10:30 - 11:00 Conclude Roundtable
11:00 - 11:30 Peer Exchange Key Points and Wrap-Up
Mary Jane Daluge, FHWA HQ Realty Specialist
David Leighow, FHWA HQ Realty Specialist

Power point presentations are available from Kathy Facer. Reminder: peer exchanges and domestic scans are funded with FHWA STEP research money. Your input is needed for future research ideas, including future peer exchanges. Input can be entered by going to the Outdoor Advertising Control / Realty Program Management section of this website by September 22, 2008: knowledge.fhwa.dot.gov/cops/step.nsf/home/#Topics (Link no longer active)

Participants

FHWA Incentive Payment Peer Exchange, Portland, Oregon
August 13-14, 2008

FHWA Contacts: Kathleen Facer, kathleen.facer@fhwa.dot.gov, 785-271-2448 x 224
Dave Leighow, david.leighow@dot.gov, 503-587-4734; cell 360-704-8541
Virginia Tsu, virginia.tsu@dot.gov, 503-587-4722

Oregon DOT Contact: Richard Dunlap, richard.r.dunlap@odot.state.or.us, 503-986-3615
Travel Arrangements: Kathy Facer, kathleen.facer@fhwa.dot.gov, 785-271-2448 x 224
Pam Todd, pamela.todd@fhwa.dot.gov, 785-271-2448 x 203; fax 785-271-1797

  1. Thomas W. Shields, Florida DOT, Manager Appraisal and Appraisal Review
    605 Suwannee Street MS22, Tallahassee, FL 32399-0450
    phone 850-414-4609, fax 850-414-4850
    thomas.shields@dot.state.fl.us

  2. Kenneth Grimes, Florida DOT, Deputy Manager Acquisition
    605 Suwannee Street MS22, Tallahassee, FL 32399-0450
    phone 850-414-4607, fax 850-414-4850
    kenneth.grimes@dot.state.fl.us

  3. Norman Pawelczyk, Wisconsin DOT, NE Region Real Estate Supervisor,
    944 Vanderperren Way PO Box 28080, Green Bay WI 54324
    phone 920-492-7708, fax 920-492-0144
    norman.pawelczyk@dot.state.wi.us

  4. Christine A. Rees, Colorado DOT, Right-of-Way Program Manager,
    4201 E Arkansas Ave, Denver, CO 80222
    phone 303-757-9836, fax 303-757-9868
    christine.rees@dot.state.co.us

  5. Steven Penturf, Indiana DOT, Acquisition Administrator,
    100 North Senate Ave, Room N642, Indianapolis, IN 46204-2249
    phone 317-232-5047, fax 317-233-3055
    spenturf@indot.in.gov

  6. John Zimmerman, Texas DOT, Acquisition Director
    PO Box 5075, 118 E Riverside Dr, Austin TX 78763-5075
    phone 512-416-2928, fax 512-416-2904
    jzimmerm@dot.state.tx.us

  7. John Reed, Texas DOT, Relocation Director
    PO Box 5075, 118 E Riverside Dr, Austin TX 78763-5075
    phone 512-416-2937, fax 512-416-2904
    jreed1@dot.state.tx.us

  8. Gerry Gallinger, Washington DOT, Director Real Estate Services
    310 Maple Park Ave., PO Box 47338, Olympia, WA 98504-7338
    phone 360-705-7305, fax 360-705-6811
    galling@wsdot.wa.gov

  9. Terry Meara, Washington DOT, Assistant Director Acquisition Real Estate Services
    243 Israel Road, Tumwater, WA 98501. PO Box 47338, Olympia, WA 98504-7338
    phone 360-705-7324, fax 360-705-6811
    mearat@wsdot.wa.gov

  10. Joy H. Layne, Virginia DOT, Assistant Program Manager
    1401 E Broad St., Richmond, VA 23219
    phone 804-786-2433, fax 804-786-1706
    joy.layne@vdot.virginia.gov

  11. Richard Moeller, Realty Consultant, O.R. Colan Associates
    2462 Flamingo Road, West Palm Beach, Florida 33410
    phone 561-493-8865, fax 801-705-0800, cell 772-708-5544
    rmoeller@orcolan.com

  12. Michael J. Stensberg, PE, Minnesota DOT, Assistant Director Real Estate and Policy Development Section - Office of Land Management
    395 John Ireland Blvd MS 630, St. Paul, MN 55155-1899
    phone 651-366-3503, fax 651-366-3450
    mike.stensberg@dot.state.mn.us

  13. Karen M. Stein, Utah DOT, Deputy Right of Way Manager
    4501 S 2700 West St, Salt Lake City, UT 84114
    phone 801-965-4057
    kstein@utah.gov

  14. Deolinda (Dee) Jones, Oregon DOT, State Right of Way Manager
    355 Capitol St NE, Salem, OR, 97310-3871
    phone 503-986-3614, fax 503-986-3625
    deolinda.g.jones@odot.state.or.us

  15. Richard Dunlap, Oregon DOT, Assistant State Right of Way Manager
    355 Capitol St NE, Salem, OR 97310-3871
    phone 503-986-3615, fax 503-986-3625
    richard.r.dunlap@odot.state.or.us

  16. Howard Bergstrom, Oregon DOT, Project Administration Manager
    355 Capitol St NE, Salem, OR 97310-3871
    phone 503-986-3637, fax 503-986-3625
    howard.n.bergstrom@odot.state.or.us

  17. David Harjo, Washington DOT, Southwest Region Real Estate Services Manager
    phone 360-905-2140, fax 360-905-2159
    11018 NE 51st Circle, Vancouver, WA 98682
    harjod@wsdot.wa.gov

  18. Dave Leighow, FHWA HQ, Realty Specialist, Equitable Center Suite 100
    530 Center Street NE, Salem, OR 97301-4740
    phone 503-587-4734, fax 503-399-5838
    david.leighow@dot.gov

  19. Virginia Tsu, FHWA Oregon Division, Realty Specialist, Equitable Center Suite 100
    530 Center Street NE, Salem, OR 97301-4740
    phone 503-587-4722, fax 503-399-5838
    virginia.tsu@dot.gov

  20. Gerald Solomon, Esq., FHWA HQ, Director Real Estate Services
    HEPR/E74-403-Stop 3, 1200 New Jersey Ave SE, Washington DC 20590
    phone 202-366-2037, fax 202-366-3713
    gerald.solomon@dot.gov

  21. Elizabeth Healy, FHWA Washington Division, Realty Specialist
    Evergreen Plaza, Suite 501, 711 South Capitol Way, Olympia, WA 98501
    phone 360-753-8655 fax 360-753-9889
    elizabeth.healy@fhwa.dot.gov

  22. Kathleen Facer, FHWA HQ, Realty Specialist
    6111 W. 29th Street Topeka KS 66614-4271
    phone 785-271-2448 x 224 fax 785-271-1797
    kathleen.facer@fhwa.dot.gov

  23. Mary Jane Daluge, FHWA HQ, Realty Specialist
    HEPR/E74-418-Stop 3, 1200 New Jersey Ave SE, Washington DC 20590
    phone 202-366-2035, fax 202-366-3713
    maryjane.daluge@dot.gov

  24. Jean Celia, Oregon DOT, Region 2 Right of Way & Utilities Manager
    455 Airport Road SE, Salem, OR 97301
    phone 503-986-2611, fax 503-986-2622
    jean.celia@odot.state.or.us

  25. Gary Taylor, Oregon DOT, Region 3 Right of Way & Survey Manager
    3500 NW Stewart Parkway, Roseburg, OR 97470
    phone 541-957-3613, fax 541-957-3563
    gary.taylor@odot.state.or.us

  26. David Brown, Oregon DOT, Region 4 Right of Way & Survey Manager
    63085 North Highway 97, Suite 102, Bend, OR 97701
    phone 541-388-6197, fax 541-388-6381
    david.t.brown@odot.state.or.us

  27. Joe Gray, Oregon DOT, Region 5 Right of Way & Survey Manager
    3012 Island Avenue, La Grande, OR 97850
    phone 541-963-1373, fax 541-962-8919
    joseph.a.gray@odot.state.or.us

  28. Christina McCausland, Housing Authority of Portland
    Portland, OR
    phone (503) 802-8516
    chrissym@hapdx.org

To provide Feedback, Suggestions or Comments for this page contact Kathleen Facer (kathleen.facer@dot.gov)

Updated: 04/02/2013
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