1. Right-of-Way Cost Estimating Ohio DOT Perspective R/W & Utilities Subcommittee Conference Florida 2007

2. April 2007 2 Project Development Process All projects must go through a PDP Process to: Encourage communication among all disciplines Increase plan quality Foster better management of the agencys 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

3. April 2007 3 Project Types Projects are divided into 3 types Steps Typical Characteristics Acquisition of R/W Number of R/W Cost Estimates Required Minimal 5 Paving and maintenance projectsNone Minor 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

4. 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

5. 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

6. 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

7. April 2007 7 Information on Labor Costs Consultant Labor Costs: Titles............... $ 400/pcl Appraisal Simple....... $ 750/pcl Detailed...... $ 4,000/pcl Appraisal Review Simple........ $ 500/pcl Detailed...... $ 2,000/pcl Negotiation.......... $ 1,100/pcl Relocation PP Move...... $ 1,500/displacee Residential Move $ 5,200/displacee Commercial Move$ 5,600/displacee Closings............. $ 400/ownership Project Management... $ 550/pcl Asbestos Testing...... $ (determined by project)

8. 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

9. 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

10. April 2007 10 STEP 1 OF THE PDP PROCESS Defining the Study Area - 500 Sq. Mile Study Area

11. April 2007 11 Developing an Initial Cost Estimate assuming Given the study area, Im assuming 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 _________________________________ assumptions Visualizing the assumptions……..a defined area

12. April 2007 12 STEP 1 OF THE PDP PROCESS G reen Line is Defined Area

13. 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

14. April 2007 14 Determining Value Today for the Formula (contd) 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 Agriculture70% x 1,309A =916.3/AX $3,500/A =$ 3,207,050 Residential24% x 1,309/A =314.2/AX $5,000/A =$ 1,571,000 Commercial 5% x 1,309/A = 65.5/Ax $304,920/A =$19,972,260 Industrial 1% x 1,309/A = 13,0/AX $108,800/A =$ 1,414,400 ESTIMATED VALUE OF LAND WITH CORRIDOR AS OF TODAY $26,164,710 Goes into the formula

15. 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 4N 2.5i 1CHS PV Solve for FV = 1.1038 $26,164,710 x 1.1038 = $28,880,607 Goes into the formula

16. April 2007 16 Developing the Cost Estimate Determining 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

17. 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) + 5,198,509 Adj. for Appropriations (Slide 22) + 4,332,091 Adj. for Incidentals (Slide 22) + 649,813 Total Estimated Cost$39,061,020 Rounded to:$39,060,000

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22. 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

23. 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

24. April 2007 24 STEP 9 - An Overview Other 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 Sheet Detail Sheet

25. April 2007 25 Parcel 283 WL Before – 5.371 Net Acres Take – 1.783 Acres Remainder – 3.588 Acres

26. April 2007 26 New 4 lane median Divided road, limited access Located to the rear of the property House located along existing road at front of property At grade crossing at Intersection of US 24 and Whetstone Road

27. April 2007 27 LA R/W 1,570 LF of 4 Strand barb wire Fence on wood poles taken CL of Project Small horse barn 103 ft. from R/W

28. 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 Book Zoning for Parcel 123: AG Residential Defined as Agricultural Residential Min site size is 1.5 acres Setbacks are: 50 feet from CL of any road 30 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

29. April 2007 29 STEP 9 - Determining Estimate Value Today From Data Book Range is $3,000 to $5,000/A Estimate $4,000/Acre Take Area is 1.783 Acres Land Value Estimate: $4,500/A x 1.783 A = $8,023 Improvements Taken: Fence taken – 1570 LF Cost New is $7.00/LF Fence taken is older – Est. 50% depreciated $7.00 x 50% = $3.50 Estimate of Fence: 1,570 LF x $3.50/LF = $5,495 Damages: No fence along R/W to keep livestock out of roadway Need CTC to create a fence Cost to Cure 214 feet x $7.00/LF = $1,498 Land Value Estimate: $ 8,023 Estimate of Fence: $ 5,495 Cost to Cure: $ 1,498 Est. Value Today: $15,016 Put It Together

30. 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

31. 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: 2.5N 2.5i 1CHS PV Solve for FV = 1.0638 $18,716 x 1.0638 = $19,910 Calculate It

32. 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

33. 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

34. April 2007 34 Questions? Douglas S. Maitland Ohio DOT (614) 466-6802 dmaitland@dot.state.oh.us