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Right-of-Way Cost EstimatingOhio DOT Perspective
R/W & Utilities Subcommittee ConferenceFlorida 2007
April 2007 2
Project Development ProcessAll projects must go through a PDP Process to:
● Encourage communication among all disciplines
● Increase plan quality
● Foster better management of the agency’s resources
● Document reasoning behind project-related decisions Documentation includes Right-of-Way cost
estimating which is: Required at the initiation of a project Updated throughout PDP process, and Becomes part of the decision making process
April 2007 3
Project TypesProjects are divided into 3 types
StepsTypical
CharacteristicsAcquisition of R/W
Number of R/W Cost EstimatesRequired
Minimal 5 Paving and maintenance projects None NoneMinor 10 Projects generally located along
existing alignment
Bridge replacements; intersection upgrades; turn lanes
Yes 6
Major 14 Projects that impact capacity; High degree of public controversy;
New alignments; bypasses; significant alterations to existing alignments
Substantial
Amounts 9
April 2007 4
STEPS 1-10 OF THE OF THE PDP PROCESS
On Major Projects (Steps 1- 6) No real plans at this point; many assumptions must be made. Market Survey and Tax Roll data are used to estimate costs.
Conversations with Realtors, Auctioneers Pulling base comparables from local MLS Talk to County Auditor to find comparables they use for various property types Pull Tax Roll data on random sampling of properties within project area
On Major Projects (Steps 7-10) Once preferred alignment selected, overlay alignment over tax maps and aerials. Determine:
the take the impact to the residue relocation issues valuation formats complexity of the project time necessary for the acquisition, and capacity of in house staff versus using consultants
Gather verified market data for more accurate costs Data books having verified sales that are reflective of the property types being impacted People along the project site physically inspecting the take area and the residue and determining
the impact of the take on the residue Start assessing complexities of acquisition-appraisal-relocation processes on preferred alignment Estimate of damages to residue becoming more apparent Serious R/W project management starts, and R/W Costs become market driven at this point
April 2007 5
General Formula
Estimate value today (Compensation paid)(at Step 1)
+ Relocation Costs (Est. Payment to owner) (at Step 5)
+ Consultant Labor Costs (at Step 6)
Subtotal A+ Adj. for Time (Current to R/W Authorization date) (at Step 1)
Subtotal B+ Adj. for Administrative Settlements (at Step 1)
+ Adj. for Appropriations (at Step 1)
+ Adj. for Incidental Expenses (at Step 1)
TOTAL COST TOTAL COST ROUNDED
April 2007 6
Information on Relocation Costs
Relocation Costs (Est. Payment to Owner):
●Residential Owner $ 40,000●Residential Tenant $ 11,750●Commercial/Farm $ 25,000●Personal Property $ 1,000
April 2007 7
Information on Labor Costs
Consultant Labor Costs:Titles . . . . . . . . . . . . . . . $ 400/pclAppraisal
Simple . . . . . . . $ 750/pclDetailed . . . . . . $ 4,000/pcl
Appraisal ReviewSimple. . . . . . . . $ 500/pclDetailed . . . . . . $ 2,000/pcl
Negotiation . . . . . . . . . . $ 1,100/pclRelocation
PP Move . . . . . . $ 1,500/displaceeResidential Move $ 5,200/displaceeCommercial Move$ 5,600/displacee
Closings . . . . . . . . . . . . . $ 400/ownershipProject Management . . . $ 550/pclAsbestos Testing . . . . . . $ (determined by
project)
April 2007 8
Information on Adjustments
Adjustment for Time:● Based on market support or average % of change in CPI over last
5 yrs.
Adjustment for Administrative Settlement:● Assume 15% of parcels settle by Adm. Settlement at average of
20% over offer●[Subtotal B x 0.15] x 1.20
Adjustment for Appropriation● Assume 10% of parcels will be appropriated● Appropriated parcels will settle at amount 50% over offer● Formula is [Subtotal B x 0.10] x 1.50
Adjustment for Incidental Expenses● Assume ODOT will have some incidental expense● 90% of parcels will settle and close● Amount is estimated to be 2.5% of settlement amount● Formula is [Subtotal B x 0.90] x 0.025
April 2007 9
STEP 1 OF THE PDP PROCESS
Working with stakeholders to understand problems and needs
No plans Defining the Study Area Developing an initial cost estimate_________________________________
This is what you have………..
A 500 square mile study area
April 2007 10
STEP 1 OF THE PDP PROCESS Defining the Study Area - 500 Sq. Mile Study Area
April 2007 11
Developing an Initial Cost Estimate
Given the study area, I’m assumingassuming that the highway will be:
● a single corridor (located somewhere in the study area):
● a 4 lane divided facility
● 300 feet wide
● the length of the study area_________________________________
Visualizing the assumptionsassumptions……..a defined area
April 2007 12
STEP 1 OF THE PDP PROCESSGreen Line is Defined Area
April 2007 13
Determining “Value Today” for the Formula
Working with a corridor that is 300 ft. wide x 36 miles long:
1. Determine Land Usage Within this Corridor: By using a combination of aerial photographs and County Profiles, one can assume:
●70% agricultural ●24% residential●5% commercial ●1% industrial
2. Determine values appropriate for land usages within corridor: Ignore structures within the corridor Focus only on the land Ask local Realtors and Auctioneers what land is going for (now too difficult to use
tax roll data)
3. Break the 36 mile long corridor into land-use segments; verify per-acre price for each segment:
Agricultural Land $3,500/acre Residential Land $5,000/acre Commercial Land $7.00/SF or $304,920/A Industrial Land $2.50/SF or $108,800/A
April 2007 14
Determining “Value Today” for the Formula (cont’d)
Using 5,280 LF = 1 mile/43,560 SF = 1 Acre:
1. Calculate the total acreage within corridor.
a. Determine how many lineal feet are in the 36 mile corridor:
36/Miles x 5,280/LF = 190,080/LF
b. Determine how many square feet are in the corridor:
300/ft. wide x 190,080/ft. long = 57,024,000 SF
c. Determine how many acres are in the corridor:
57,024,000 SF ÷ 43,560 = 1,309 Acres in the corridor
2. Calculate the number of acres in each land use segment using the land-use ratios.
3. Calculate the value of the acres in each land use segment.
4. Calculate the value of all the land in the corridor as of today.
Calculate number of acres in each land use segment
Calculating acreage cost of each land use segment
Agriculture 70% x 1,309A = 916.3/A X $3,500/A = $ 3,207,050
Residential 24% x 1,309/A = 314.2/A X $5,000/A = $ 1,571,000
Commercial 5% x 1,309/A = 65.5/A x $304,920/A = $19,972,260
Industrial 1% x 1,309/A = 13,0/A X $108,800/A = $ 1,414,400
ESTIMATED VALUE OF LAND WITH CORRIDOR AS OF TODAY $26,164,710
Goes into the formula
April 2007 15
Adjust current value forward in time to anticipated Sale Date or R/W Authorization Date This information provided by District Office Assume 4 years from now
Time is based on market evidence or CPI and tempered with reason Reflects history and not necessarily indicative of the future Assume 2.5% per year increase over the next 4 years
Using an HP-12C calculator, the time adjustment is:
Determining Adjustment for Time for the Formula
4N2.5i1CHS PVSolve for FV = 1.1038$26,164,710 x 1.1038 = $28,880,607
Goes into the formula
April 2007 16
Developing the Cost EstimateDetermining Other Adjustments for the Formula
Adjustment for Administrative Settlements
[ $28,880,607 x 0.15] x 1.20 = $5,198,509
Adjustment for Appropriations
[$28,880,607 x 0.10] x 1.50 = $4,332,091
Adjustment for Incidentals
[$28,880,607 x 0.90] x 0.025 = $649,813
April 2007 17
STEP 1 Entering Other Adjustments into the Formula
Estimate value today (Slide 16) $26,164,710 Relocation Cost (at Step 5) -0-Consultant Labor Cost (at Step 6) -0-
Subtotal A $26,164,710
Adj. for Time (Slide 20) x 1.1038
Subtotal B$28,880,607
Adj. for Administrative Settlements (Slide 22) + 5,198,509Adj. for Appropriations (Slide 22) + 4,332,091Adj. for Incidentals (Slide 22) + 649,813
Total Estimated Cost $39,061,020Rounded to: $39,060,000
April 2007 18
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April 2007 22
STEP 7 - An Overview
1. Preferred alignment identified 2. Approximate centerline known
● Topographical ground survey features collected● Utilities and their depths shown● Railroad acquisitions identified● Preliminary Plan and Profile sheets shown● Preliminary construction limits shown ● Cross section being developed● Individual auditor parcels now known
3. Create a Sales Data Book● All Sales in Sales Data Book to be of vacant land● Utilize local Realtors, appraisers, staff or consultants● Verify market data to reflect property types in the corridor● Use ODOT standard data sheet
4. Update Costs Estimate for:● Improved properties● Damages to residue properties● Relocation Costs● Consultant Labor costs for R/W Acquisition
3. Create a Sales Data Book● All Sales in Sales Data Book to be
of vacant land● Utilize local Realtors, appraisers,
staff or consultants● Verify market data to reflect
property types in the corridor● Use ODOT standard data sheet
April 2007 23
STEP 9 - An Overview
Overview● Stage 1 review completed; comments incorporated into the Stage 2 design● Preliminary R/W Plans available● Summarize environmental commitments; prepare environmental plan notes● Stage 2 Detailed design is created at the end of this step
Address Serious Project Management Decisions• Time needed for relocation process
Use staff or consultants for relocation• Time needed for acquisition parcels
Use staff or consultants
Determine the complexity of the appraisal process• Engage the appraisal reviewer• Create parcel impact notes• Define the valuation issues• Determine the scope of appraisal needed• Determine the type of appraisal needed• Use staff or consultants
April 2007 24
STEP 9 - An OverviewOther Determinations• Consultant utilization• Money needed to pay the consultant• Process to encumber money, and• Contracting process to engage consultants
Update Cost Estimate● Preliminary R/W Plans basis for cost estimate
Workplan used to estimate costs● Pre-Acquisition Surveys initiated for Relocation parcels
Skilled relocation people estimating relocation cost● Tax roll data no longer used for improvements
Skilled eminent domain people estimating value to improvements taken and damages (if any) to residue
● Update labor cost
Example of a Step 9 Cost Estimate● Focus will be on 1 Parcel● Based on Preliminary Plans● Use: Summary Sheet (Slide 37)
Property Map SheetDetail Sheet
April 2007 25
Parcel 283 WLBefore – 5.371 Net Acres
Take – 1.783 AcresRemainder – 3.588 Acres
April 2007 26
New 4 lane medianDivided road, limited access
Located to the rear of the property
House located along existingroad at front of property
At grade crossing atIntersection of US 24 and Whetstone Road
April 2007 27
LA R/W 1,570 LF of 4Strand barb wire
Fence on wood polestaken
CL ofProject
Small horse barn103 ft. from R/W
April 2007 28
From the Cross Section and the Data Book
Using Information from the Cross Sections● Grade change is minimal – about 4 feet● EOP is about 100 feet from the rear property line
Using Information from the Data BookZoning for Parcel 123: AG Residential
● Defined as Agricultural Residential ● Min site size is 1.5 acres● Setbacks are:
50 feet from CL of any road30 feet from the rear property line
15 feet side property line● Min. frontage of 200 feet
Land value● For 5 to 10 acre Residential Use Properties● Ranges from $3,000 to $5,000 per acre
April 2007 29
STEP 9 - Determining Estimate Value Today
From Data BookRange is $3,000 to $5,000/AEstimate $4,000/AcreTake Area is 1.783 AcresLand Value Estimate:
● $4,500/A x 1.783 A = $8,023Improvements Taken:Fence taken – 1570 LFCost New is $7.00/LFFence taken is older – Est. 50% depreciated
● $7.00 x 50% = $3.50Estimate of Fence:
● 1,570 LF x $3.50/LF = $5,495Damages:No fence along R/W to keep livestock out of roadwayNeed CTC to create a fenceCost to Cure
● 214 feet x $7.00/LF = $1,498
Land Value Estimate: $ 8,023Estimate of Fence: $ 5,495Cost to Cure: $ 1,498Est. Value Today: $15,016
Put It Together
April 2007 30
STEP 9 - Determine Consultant Labor Costs
Consultant Labor Cost:● Amounts from Slide 9_______________________________________
Titles $ 400/parcel
Appraisal – Simple $ 750/pcl
Appraisal Review – Simple $ 500/pcl
Negotiation $1,100/pcl
Closings $ 400/ownership
Project Management $ 550/pcl
Total $3,700/Parcel 123
April 2007 31
STEP 9 - Determining Adjustment for Time
Adjustment for Time:● Time is to based on market evidence or CPI and is
also to be tempered with reason.● Reflects history and not necessarily indicative of
the future● Assume 2.5% per
year increase● Assume from current
date until R/W clear date of 2.5 years
Using an HP-12C calculator, the time adjustment is:
2.5N2.5i1CHS PVSolve for FV = 1.0638$18,716 x 1.0638 = $19,910
Calculate It
April 2007 32
STEP 9 - Determining Other Adjustments
Adjustment for Settlements
[ $19,910 x 0.15] x 1.20 = $3,584
Adjustment for Appropriations
[$19,910 x 0.10] x 1.50 = $2,986
Adjustment for Incidentals
[$19,910 x 0.90] x 0.025 = $ 448
April 2007 33
STEP 9 - Updating the Formula
Estimate value today: (slide 58) $15,016 + Relocation Cost: -0-+ Consultant Labor Cost $ 3,700
Subtotal A $18,716+ Adj. for Time x 1.0638
Subtotal B $19,910+ Adj. for Adm. Settlements (slide 53) $ 3,584+ Adj. for Appropriations (slide 53) $ 2,986+ Adj. for Incidental Expenses (slide 53) $ 448
Total Cost $26,928