1. CONDEMNATION SYMPOSIUM May 26, 2010 Subsurface Utilities-Easements (Deep tunnels to Aerial crossings)Subsurface Utilities-Easements (Deep tunnels to Aerial crossings) Appraisal Issues – Dennis Stefanik (MMSD)Appraisal Issues – Dennis Stefanik (MMSD) Legal Issues – Ben SouthwickLegal Issues – Ben Southwick

2. Presentation Overview Acquisition Process and the AppraiserAcquisition Process and the Appraiser Types of Subsurface EasementsTypes of Subsurface Easements Subsurface Construction MethodsSubsurface Construction Methods Easement Valuation IssuesEasement Valuation Issues Easement StigmaEasement Stigma Easement Status after Street or Highway DiscontinuanceEasement Status after Street or Highway Discontinuance Easement vs FeeEasement vs Fee

3. But 1 st - A Little Bit About Sewers (Sanitary Sewer & Combined)

4. MIS is the Freeway of Sewers (Metropolitan Interceptor Sewers) –Limited Access and High Capacity –Dont Assume Property Can Hook Up Need local hook up (if feasible)Need local hook up (if feasible) –Many sizes 36 to 120 (diameter) Deep Tunnels are 24-30 feet in diameter 250- 300 deepDeep Tunnels are 24-30 feet in diameter 250- 300 deep 10 local line can serve an entire subdivision10 local line can serve an entire subdivision –Gravity (limited pump stations) –?? How District manages wet weather flows

5. EMINENT DOMAIN PROCESS Ben and Dennis –Wisconsin Statues Chapter 32 32.05 (Highways, Streets, Sewers, Watercourses, Alleys, Airports, and Mass Transit)32.05 (Highways, Streets, Sewers, Watercourses, Alleys, Airports, and Mass Transit) 32.06 (Condemnation in all matters except under s. 32.05 etc.)32.06 (Condemnation in all matters except under s. 32.05 etc.) Public Necessity Declared-Relocation OrderPublic Necessity Declared-Relocation Order –Acquisition Plat –Need for Appraisal(s) –Appraisal differences 32.05 vs 32.06

9. 1 st Steps in Appraisal Process Evaluate the appraisal issues & negotiate your fee (Gov. or Owners appraisal)Evaluate the appraisal issues & negotiate your fee (Gov. or Owners appraisal) Gather data: Const Plans, Esmt sample, title and survey info from acquiring agencyGather data: Const Plans, Esmt sample, title and survey info from acquiring agency Envision easement (during construction and after construction with Permanent Easement Rights)…loss of usesEnvision easement (during construction and after construction with Permanent Easement Rights)…loss of uses Is Highest and Best Use affected ??Is Highest and Best Use affected ??

10. Types of Subsurface Easements (with/without surface rights) Deep Tunnel (250-300 deep)Deep Tunnel (250-300 deep) –Work shafts, blasting, ground water, collector sewers Tunnel with access rightsTunnel with access rights –Lutheran College (Underwood Creek) –Hansen Golf Course Subsurface and Surface (limited rights) (Open Cut)Subsurface and Surface (limited rights) (Open Cut) –Aqueducts near Milwaukee River –Oak Creek Interceptor Temporary ConstructionTemporary Construction –Expires when project complete Conservation EasementsConservation Easements

11. Life Cycle of a Sewer Easement (For the Appraiser to Consider) BirthBirth –Acquisition Plat (32.05 procedure) –Appraisal (District) –(Owners appraisal) Negotiation –Acquisition (Easement or Award) (Appraiser consider-terms) ConstructionConstruction –Loss of Use (annual rate or monthly) –Restoration The Aftermath-Forever (or until ??)The Aftermath-Forever (or until ??) –Allowed Uses –Maintenance, repair, reconstruction, access

12. Other Potential Appraisal Issues Soil BoringsSoil Borings Contamination (prior to const project)Contamination (prior to const project) Work in existing R/WWork in existing R/W Street Vacations (esmt rights reserved)Street Vacations (esmt rights reserved) Water Table & Monitoring WellsWater Table & Monitoring Wells

13. Other Appraisal Considerations Restoration – In KindRestoration – In Kind –Maybe need expert special circumstances Timing for Construction PhaseTiming for Construction Phase –Annual amount can be applied Temp from PermTemp from Perm Hold Harmless (Ben)Hold Harmless (Ben)

14. VALUATION TECHNIQUES Before and After ValuesBefore and After Values –Hunt for Comps Part of the WholePart of the Whole –% of bundle of rights What can you not do After that you could BeforeWhat can you not do After that you could Before Cost to CureCost to Cure

15. Status of Underground Utility Easement in Highway Right-of Way after Highway Has Been Discounted or Vacated Wisconsin Statutes, section 66.1005Wisconsin Statutes, section 66.1005 Former Right of Way Reverts to AbuttersFormer Right of Way Reverts to Abutters Easements for underground utilities in discounted Hwy R/W shall continue unlessEasements for underground utilities in discounted Hwy R/W shall continue unless –No use or written consent

16. Admissibility of Fear and Stigma Evidence 2 Fairly Recent Court of Appeals Decisions2 Fairly Recent Court of Appeals Decisions –Generalized Evidence –Not by itself –Must be related to fair Mkt Value of property Wisconsin Statutes, Sec 907.03Wisconsin Statutes, Sec 907.03 –Admission of Evidence Relied upon by AppraisersRelied upon by Appraisers Considered by prospective buyersConsidered by prospective buyers

17. Top 10 Reasons to Purchase Fee Simple and Not an Easement 10-You pay for it (restrictive esmt)10-You pay for it (restrictive esmt) 9-Owners have no clue about uses9-Owners have no clue about uses 8-Maintenance same cost (access issues)8-Maintenance same cost (access issues) 7-Muni ownership common in most cases7-Muni ownership common in most cases 6-Uses & Encroachments not an issue6-Uses & Encroachments not an issue 5-Owner can grant other easements which might conflict5-Owner can grant other easements which might conflict

18. Top 10 Reasons (contd) 4-No Hold Harmless clause like esmt4-No Hold Harmless clause like esmt 3-Liability exposure (environmental/general) same3-Liability exposure (environmental/general) same 2-Ownership is clear, no terms and conditions to interpret2-Ownership is clear, no terms and conditions to interpret 1-TOTAL CONTROL1-TOTAL CONTROL