Strategies to Optimize Real Property Acquisition, Relocation Assistance, and Property Management Practices (2014)

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9 C H A P T E R 2 Introduction This chapter summarizes the results of an online survey and follow-up interviews to (a) assess real property acquisi- tion and property management practices around the United States; and (b) gather ideas on issues, challenges, and best practices. The chapter also summarizes ideas and recom- mendations gathered from a sample of previous initiatives and studies. Online Survey and Follow-up Interviews Methodology The online survey conducted for NCHRP Project 20-84 targeted relevant AASHTO subcommittees (Right-of-Way, Utilities, and Outdoor Advertising Control; Design; and Legal Affairs); the TRB Committee on Eminent Domain and Land Use; and relevant International Right-of-Way Association (IRWA) committees (Relocation, Transportation, Valuation, and Asset Management). AASHTO subcommittee members included state DOT representatives (typically from headquar- ters) and their corresponding FHWA counterparts. This list included all 50 states, the District of Columbia, and Puerto Rico. Members of the TRB Committee on Eminent Domain and Land Use represented a wide range of stakeholders, includ- ing state DOTs, FHWA, consultants, and attorneys in private practice. In the case of the IRWA committees, although IRWA did not release information about number of members or demographic data for each of the committees, informal con- versations with IRWA officials suggested that each committee had 20–30 members representing a wide range of agencies, including federal, state, and local levels, in both the public and private sectors. Appendix A to NCHRP Report 771 provides a copy of the survey instrument. The online survey included two versions of the survey instrument, one for state DOTs and one for consultants. Having separate questionnaires was useful for establishing differences between public- and private-sector representatives with respect to issues and the identification of strategies for streamlining and optimization. The project budget did not support the inclusion of local public agencies (LPAs) in the survey and follow-up interviews. Nevertheless, state DOT representatives and consultants provided a wealth of information about the interaction between state transpor- tation agencies and LPAs, including issues, challenges, and potential strategies. The research team emailed invitations to participate in the survey to representatives of all 50 states, the District of Columbia, and Puerto Rico, using as a basis the preliminary list of potential participants that had been developed previ- ously. The email invitations included a request for recipients to forward the invitation to regional-level and district-level personnel such as right-of-way, design, and project manag- ers and administrators, as well as other personnel involved in real property acquisition (e.g., attorneys) and the interaction between right-of-way activities and other project develop- ment and delivery process activities. Although not statisti- cally controlled, the strategy was intended to gather as much information as possible from both headquarters and regional offices. In total, 104 individuals representing 38 state DOTs responded to the agency survey, for an overall agency response rate of 73 percent. For the consultant survey, the response was 24 participants from 13 states, for an overall response rate at the state level of 46 percent. The research team complemented the online survey with follow-up interviews and a peer exchange. The purpose of these activities was to clarify some of the survey responses and to seek additional information with respect to specific issues, strategies, and potential suggestions. More than 50 representa- tives of state agencies, the federal government, and the private sector participated in the follow-up interviews and the peer exchange. Survey, Follow-up Interviews, and Literature Review

10 Lessons Learned Appendix B provides a detailed description of the survey results. It is worth noting that the survey and some of the inter- views took place in 2011 (i.e., before MAP-21 was enacted). This section presents a summary of lessons learned from the survey and follow-up interviews, taking into account the changes that MAP-21 introduced in 2012. • Survey participation. There was a wide participation of state DOT personnel from field offices. In total, 58 percent of participants were participants from headquarters, with the remaining 42 percent of participants representing field offices. There was also a wide participation across vari- ous organizational hierarchy levels (25 percent directors, 61 percent managers, and 14 percent support staff). Sur- vey participants were primarily involved in the acquisition of real property. Involvement in real property acquisition covered the entire spectrum of activities, from appraisals to payments. • Issues, challenges, and business practices. Participants were asked about the level of impact of a variety of issues that state DOTs face when acquiring real property for trans- portation projects. Most participants attributed the highest impact to changes in real property acquisition needs late in the design phase and lack of involvement of right-of-way staff during design. Not involving right-of-way personnel in earlier phases (planning and programming, preliminary design, and environmental process) as well as during utility coordination also was perceived as having a major impact. Respondents pointed to staffing issues as having a major impact, including both staff turnover and difficulty in hir- ing and retaining staff with adequate real property acqui- sition experience. Respondents further highlighted as a significant issue the lack of public-sector real property experience among consultants. Another significant issue that resonated with survey participants was external entities (e.g., law firms) advising property owners not to negoti- ate as a tactic to obtain more money during condemnation proceedings. Inadequate cost estimates for real property acquisition also was an issue that resonated with survey participants. From the perspective of state DOTs, however, the level of impact of inadequate cost estimates was not as high as that of some other issues. (Although not clarified through the survey, a possible reason for this response may be that other units within their agencies deal with project funding issues more directly than do those who participated in the survey.) Participants were asked to provide feedback with respect to types of real property acquisitions that state DOTs con- sider particularly problematic (e.g., problematic in terms of time and cost). Although there were problems with the way this survey question was designed, the feedback indicates that state DOTs have issues with certain types of real prop- erty acquisitions, particularly railroad interests (either operating or abandoned). Acquisitions of non-residential (developed) property and acquisitions involving outdoor advertising sign interests also tend to be problematic. • Outsourcing real property activities. The range of responses on this topic was quite wide, from participants reporting great results to participants reporting complete dissatisfaction. In general, state DOTs value using consul- tants when the internal workload is heavy and the DOT does not have the resources to accommodate the demand; however, feedback from state DOTs indicates there are seri- ous issues with this approach. Examples of issues include quality of deliverables (e.g., too many mistakes or cutting corners), quality of customer service (e.g., not interact- ing effectively with property owners or focusing more on quantity of production than quality of production), and the amount of management required (i.e., state DOTs needing to spend a significant amount of time managing consulting contracts). Other issues include higher overall costs to the state DOT and higher condemnation rates. • Performance measures. State DOTs use (or have a need for) a variety of performance measures in connection with the acquisition of real property for transportation proj- ects. The two most popular performance measures were (a) number of parcels or property interests to acquire, and (b) time to complete critical activities. Beyond these basic measures, state DOTs were particularly interested in measures such as the difference between administrative settlement amounts and approved appraisals, number of properties acquired by negotiation, number of proper- ties acquired by condemnation, and number of properties acquired or in possession prior to letting. Although most participants agreed about the need to measure the effectiveness of the real property acquisition process, several participants cautioned about using perfor- mance measures blindly in the context of a process that involves taking private property for the benefit of a trans- portation project. One participant summarized this con- cern in terms of the need for a measure that looks at the “organizational effectiveness of having the right people in the right place at the right time.” • Changes to laws and regulations. Only a few participants indicated that there was an urgent need for changes to fed- eral or state laws and regulations. Participants indicated instead that the most pressing issues related to real prop- erty activities were the lack of early involvement by right- of-way personnel in the project development process, lack of sufficient time to acquire real property, or changes to parcels late in the design phase. These considerations aside, many participants highlighted the need for some changes to laws and/or regulations, such as those related to appraisal waiver limits, relocation benefits for businesses, and timelines related to condemnation proceedings.

11 • Business practices, unique processes, and strategies. Participants provided a substantial amount of feedback regarding business practices, unique processes, and strat- egies their agencies have implemented (or are planning to implement) to streamline real property processes. The range of ideas submitted was quite wide. Not surprisingly, they were rooted, for the most part, on the existing legisla- tive and regulatory framework. Nonetheless, they provide a glimpse of the types of improvements and streamlining in which practitioners would be interested. For example, participants highlighted the need to improve internal coordination within their agencies, particularly with respect to timing the involvement of right-of-way personnel (e.g., making sure that the right-of-way map is finalized at least a certain number of months before the project letting date, involving right-of-way personnel ear- lier in the process, and holding project meetings often). Survey participants also highlighted the need for more effective coordination with external stakeholders such as the General Services Administration (GSA), railroad com- panies, and utility owners. Many of the ideas related to specific real property acqui- sition functions. For example, several ideas involved rais- ing the limit on appraisal waivers or evaluating situations that entail low-impact business risks. Other ideas involved raising the limit for relocation payments (primarily for businesses) and using incentives and other strategies to encourage more effective participation by property own- ers. Many other suggestions dealt with staffing and out- sourcing, most of them related to the need to develop and maintain an appropriate level of resources to be able to respond effectively to real property acquisition needs. • Training. Participants provided information about the kind of training and professional development that state DOTs offer to staff members who work in real property acquisition activities. Feedback from participants indi- cates that state DOTs provide two types of training and development opportunities—in-house and external—in addition to on-the-job training and mentoring. In-house training and development include a variety of options, such as formal classes on specific topics, peer exchange meetings, and annual conferences. Some agencies offer these training opportunities to agency staff as well as con- tractors and LPAs. Some of the courses are state-certified or pre-approved for continuing education credits for real estate and appraisal licensing. External training and development options include FHWA webinars and IRWA, National Highway Institute (NHI), and Appraisal Institute courses. Some agencies have agreements with colleges in their states that offer courses on real property topics. A number of survey participants highlighted that training opportunities have decreased substantially in recent years due to budgetary constraints. • Property management. Participants provided information about property management practices, including types of real property their agencies normally acquire for transportation projects, what kinds of uses are allowed on those properties, what kinds of data platforms are used for property man- agement purposes, and what kinds of issues faced by state DOTs have a major impact on their ability to manage real property effectively. Most participants indicated their state DOTs acquire properties in fee simple for transportation projects. Frequently, state DOTs also acquire access rights. Easements from a variety of stakeholders (e.g., private own- ers or LPAs) also are quite common. Much less frequently, although still common, is the acquisition of real property that excludes mineral, oil, or gas rights. State DOTs allow a wide range of uses on state right-of- way. Most of the uses are traditional uses such as driveways, utility installations, and leases (including short-term residen- tial dwelling leases), although some interest exists in alterna- tive uses such as solar energy and carbon sequestration. Agencies use a variety of data management platforms for property management purposes. In general, office applica- tions (e.g., spreadsheets, word processors, and desktop databases) are common. Server-based databases also are common, reflecting a trend throughout the transportation industry, in which the use of this platform is increasing for a variety of applications. The use of web-based mapping tools is common, reflecting the increasing acceptability of this type of platform to support a wide range of appli- cations, including property management. However, CAD and GIS platforms are not as commonly used for prop- erty management applications as other data management platforms. The highest impact reported by participants resulted from difficult-to-use databases or information systems to manage real property assets. Difficulty in tracking and monitoring real property uses was also highlighted as hav- ing a significant impact. Participants further indicated that one of the most significant issues affecting the ability of state DOTs to manage real property effectively was illegal or unauthorized encroachments. Previous Initiatives and Studies FHWA Project Development Guide The FHWA Project Development Guide (1) lists the follow- ing opportunities to simplify and streamline the real property acquisition process: • Selection of the appropriate appraisal format. • Appraisal waiver for non-complex and low-value acquisitions. • Use of a roster of qualified appraisers. • Use of single appraiser/negotiator.

12 • Notice of intent to acquire. • Use of the minimum payment provision. • Use of accelerated negotiations (first contact by mail). • Use of administrative settlements. • Use of a brochure to explain the acquisition process. • Use of simplified title report procedures and innovative title data purchases. • Use of qualified real property acquisition and relocation assistance contractors. Participants in the NCHRP Project 20-84 survey high- lighted many of these opportunities, both in the context of already-implemented strategies or strategies the participants’ agencies were planning to implement to expedite the acquisi- tion process. Other strategies outlined in the FHWA Project Development Guide include protective buying and hardship acquisitions before processing the final environmental docu- ment (which can be done after the agency has notified the public that it has selected a preferred alignment, or a public hearing has been held or an opportunity for the hearing has been afforded). Hardship and protective buying acquisitions normally apply if the number of parcels is small. The guide notes that a provision introduced in 1991 allows agencies to acquire properties before completion of the environmental process when using their own funds and, under certain spe- cific circumstances, to be reimbursed if the agency complies with specific requirements. The guide also recommends that agencies allow sufficient time to accomplish the statutory requirements in the Uniform Act. 2005 Domestic Scan on Advance Acquisition and Corridor Preservation In 2005, the FHWA Office of Real Estate Services sponsored a domestic scan to discuss experiences and best practices in the areas of advance acquisition and corridor preserva- tion (2). One goal of the scan was to identify strategies to streamline the advance acquisition process and ways that advance acquisition could be used as a corridor preservation tool. Recommendations from scan participants included the following: • Establish a designated source of funds for advance acquisi- tion that is reliable and not re-programmable to other uses. Scan participants recommended that the source of funds originate at FHWA. • Treat the acquisition of real property as a neutral activ- ity from an environmental review perspective, as long as those activities do not compromise environmental laws and regulations, and as long as the issue of necessity raised in condemnation situations is addressed. • Solicit voluntary sales by willing sellers and proactively respond to property owners who initiate such sales. These acquisitions should not be required to satisfy hardship or protective buy standards. The process should allow the acquisition of real property on a project-wide basis, particularly if the project is anticipated to be classified as a categorical exclusion (CE) project instead of only on a parcel-by-parcel basis. • Update regulations and policies at FHWA to promote cor- ridor preservation by encouraging states to pursue corridor preservation as a goal and to enact appropriate legislation to support that goal. Scan participants recommended pro- viding flexibility and streamlining requirements (e.g., by treating acquisitions for new alignments and changes to existing alignments differently, acknowledging that a single standard for all states is probably not feasible or effective). • Implement corridor preservation mapping applications to enable agencies to share information about future cor- ridors with communities, developers, and property own- ers in a way that gives state DOTs a say in development decisions and encourages developers to coordinate their development and transportation needs with state DOTs. • Formalize the use of purchase options to give state DOTs the right to acquire certain properties before development occurs on those properties. One of the advantages of using purchase options is the ability to address contentious nego- tiation issues up front. A disadvantage is the additional cost in the form of a fee to secure the purchase option. 2006 FHWA Study on Present and Future Public-Sector Real Estate Needs and Solutions In 2006, FHWA completed a research project to identify tools that FHWA and other federal agencies that conduct real estate acquisitions would require to provide services efficiently and effectively for the following 30 years (3). The research also identified present and future public-sector real property needs and possible solutions in areas such as early integration and coordination, flexibility in laws and regula- tions, training and education, recruitment, public relations, and technology. Recommendations from the study, grouped by major category, can be summarized as follows: • Recommendations for FHWA—project development process: – Encourage state DOTs to emphasize the need for real prop- erty involvement in all phases of project development. – Implement a mandate that in order for an agency to receive federal funds, real property considerations must be fully integrated throughout the project development process.

13 – Develop a design acceptance stage that runs concur- rently with other functions of the project development process. – Implement a public awareness program that includes a systematic approach for addressing property owner concerns in order to change the public perception of acquisition of private property under eminent domain. – Promote the use of technologies such as GIS. • Recommendations for FHWA—training and professional development: – Make training a top priority and act as an advocate in making real property a major policy issue for state DOTs. – Develop and disseminate cost-effective educational tools and techniques while continuing to offer traditional classroom courses for advanced topics. – Emphasize the right-of-way discipline in recruiting efforts and develop partnerships with universities, voca- tional institutions, and community colleges. – Encourage engineering schools to expand their curricu- lum to include courses on real property acquisition and the project development process. – Become an advocate for the right-of-way profession as a career path. – Help state DOTs to develop the right-of-way profession as a career path. – Identify funding sources for scholarships through agen- cies such as AASHTO and IRWA. – Support state DOT right-of-way managers in develop- ing and delivering a statewide real property training and education program to internal staff as well as metro- politan planning organizations (MPOs) and LPAs. • Recommendations for state DOTs: – Encourage long-range planning and coordination with MPOs and LPAs in the preservation of future right-of-way. – Gain understanding and buy-in from engineering man- agement of the priority of right-of-way in the project development process. – Integrate the right-of-way function early in the project development process. – Work with public relations experts and be present at project public meetings to answer questions and address the public’s concerns regarding real property impacts. – Involve property owners and the surrounding com- munity from the beginning and throughout the project development process. – Provide the necessary resources to elevate training and education within the agency. – Create a public-private partnership with consultants to provide cross-training and help with the retention of institutional knowledge on both sides. – Utilize technologies such as GIS to develop a more effi- cient and effective program. • Recommendations for changes to federal legislation— Uniform Act: – Give states the authority to react as needed to situations relating to the administration of their own right-of-way program. – Allow states to develop and document their own qual- ity assurance/quality control (QA/QC) processes, which FHWA can continue to monitor for compliance. – Require presentation of the appraisal at the time of the offer to purchase property. (Note: Stakeholder partici- pants did not reach a consensus on this recommendation.) – Allow for payment of attorney fees up to a certain per- centage of the award to protect property owners uni- formly. (Note: Stakeholder participants did not reach a consensus on this recommendation.) – Provide for a simplified program for small, non-complex projects that allows a lump-sum payment (global settle- ment) or a self-service relocation claim. – Allow the states additional payment authority over the statutory caps. • Recommendations for changes to federal legislation— National Environmental Policy Act (NEPA): – Allow real property acquisition prior to the environ- mental documentation approval without prejudicing the outcome of the environmental process. It is worth noting that MAP-21, which was enacted in July 2012, introduced several provisions designed to accelerate project delivery and to promote efficiency and effective- ness in the process. One of these provisions addressed real property acquisition activities prior to the environ- mental document approval. • Recommendations for changes to federal regulations— 23 CFR 710: – Allow for construction clearance approvals on a parcel- by-parcel basis similar to design-build project provi- sions. – Authorize acquisition of real property necessary for right-of-way and mitigation sites in advance of the Record of Decision (ROD) based upon the reasonable necessity of the land for the project. • Recommendations for changes to federal regulations— 49 CFR 24: – Include the hardship and protective buying provisions of 23 CFR into 49 CFR 24, allowing agencies to acquire property under the same provisions. – Make changes to reflect any statutory changes recom- mended above. Most of the recommendations from the 2006 FHWA study have been included, in one way or another, in this report.

14 Some recommendations from the 2006 FHWA study—more specifically, those recommendations dealing with training and development—are more specific than the feedback obtained through the NCHRP Project 20-84 survey and/or follow- up interviews (which consisted, in general, of examples of courses and other training opportunities currently available to right-of-way professionals). On several other topics, more specifically dealing with the integration between right-of-way functions and the rest of the project development and delivery process, the 2006 FHWA study provided high-level ideas but did not include detailed, actionable recommendations. For example, one of the rec- ommendations was to fully integrate right-of-way func- tions in all phases of project development for an agency to receive federal funds. From a practical perspective, however, “full integration” could mean many different things (e.g., an agency could develop a generic Gantt chart depicting right- of-way functions in the project development process and sug- gest this as an example of full integration), making it difficult to implement the recommendation without clear guidance and metrics as to what full integration means and entails. 2006 FHWA Study on Right-of-Way Professional Certification Needs In 2006, FHWA conducted a study to evaluate real estate licensing requirements around the country with a goal to evaluate the feasibility of a professional certification pro- gram for public-sector real estate (4). The study included a survey of state licensing agencies, a survey of institutions and courses, interviews with federal agency officials, a web- based market needs study, and focus groups. Survey and focus group participants included federal agencies (50 per- cent of participants), state DOTs (25 percent of participants), private-sector firms (20 percent of participants), and other groups (5 percent of participants). According to the study, 67 percent of participants indicated that professional right-of-way certification would be valuable and they would be likely to pursue it. The level of support for professional certification by type of agency (e.g., federal agencies, state DOTs, and LPAs) was not clear from the study. (Although some references to professional licensing and cer- tification were made among NCHRP Project 20-84 survey responses, the level of responses regarding licensing and cer- tification needs was extremely low. Readers are cautioned that this result does not mean that state DOT respondents were not interested in licensing and certification. Although a pos- sible interpretation of the results is that licensing and certifi- cation was not on the radar screen of most NCHRP Project 20-84 survey participants, this may simply reflect the fact that the NCHRP 20-84 survey was not specifically designed to address licensing and certification issues.) 2005 National Listening Sessions In 2005, FHWA conducted four national listening sessions that produced more than 180 comments. The listening ses- sions resulted in the identification of eight priority areas for potential updates of the Uniform Act, as follows (5): • For residential housing payments, increase the limit from the current $22,500 to $31,000. • For tenant payments, increase the limit from the current $5,250 to $7,200. • For business reestablishment payments, increase the limit from the current $10,000 to $25,000. • For business payments, increase the in-lieu payment limit from the current $20,000 to $40,000. • Establish an index for future increases to avoid requiring additional congressional action to ensure the limits are current. • Modify homeowners’ occupancy requirements from the current 180-day and 90-day eligibility requirements to one 90-day owner-occupancy eligibility requirement, there- fore simplifying criteria and calculations. • Enhance reporting requirement by collecting informa- tion on program activity annually. Several federal agencies identified this potential change to address a limitation in the current process, highlighting that agencies often do not have good data on their program because reporting is not a requirement. • Enhance Uniform Act services provided by federal agen- cies, including coordination, assistance, monitoring, research, and training. Feedback from participants in the NCHRP Project 20-84 survey and follow-up interviews was consistent with these recommendations, particularly with respect to suggested updates to the Uniform Act regarding increases in business payment allowances and relocation assistance. 2007 FHWA Study on Federal Land Transfers In 2007, FHWA completed a study to identify potential opportunities to improve the federal land transfer process (6). The scope of the study included analyzing the interagency agreement process, identifying best practices, and developing recommendations for improving the process on a national basis. Recommended steps for streamlining and standardiz- ing federal land transfers included the following: • Enhance communication and coordination between and within agencies. • Encourage early involvement in the project development process by all affected agency realty resources.

15 • Update existing agreements to ensure consistency with specific agency policies and guidance. • Provide access to sample deeds to help develop deed tem- plates at the local level. • Establish a website for sharing and accessing guidance documents and other resource materials related to federal land transfers. • Evaluate increased use of centralized and/or dedicated resources for processing federal land transfers. • Establish a model regional memorandum of understanding (MOU) based on the 2001 California MOU to strengthen procedures for ensuring the recording of deeds on a go- forward basis. • Develop an overview workshop on the federal land trans- fer process. 2007 FHWA Study on Impacts of Implementing the Appraisal Waiver Provision In 2007, FHWA completed a study examining the effec- tiveness of implementing the appraisal waiver provision in 49 CFR 24 for uncomplicated, low-value real property inter- ests (7). The analysis revealed that most state DOTs considered the appraisal waiver option valuable and applied it if poten- tial existed to save time and money. The study also identified best practices and developed recommendations to assist with implementation of the appraisal waiver provisions at the state and national levels. Examples of the recommendations included the following: • Consider more factors than just the complexity and the value of a property interest when determining whether a waiver valuation is necessary. • Use well-supported and current market information to support unit values in waiver valuations. • Develop documentation standards for waiver valua- tions that are sufficient to justify the estimated value of a property. • Establish guidance and promote best practices to facilitate the preparation of waiver valuations by non-appraisers. Knowledgeable non-appraisers can handle waiver valua- tions effectively; however, appraisers have important roles in identifying which parcels are appropriate for use of the waiver provisions and in compiling and evaluating market sales information and project-level analysis. • Develop procedures that promote early contact with prop- erty owners to ensure that all impacts of the proposed acquisition become known to the property owners before completing the valuation. Early contacts are necessary to ensure equal attention and treatment to all property own- ers affected by a project. Risk Assessment, Management, and Allocation As will be described in more detail in subsequent chapters of this report, it is typical for agencies to estimate the duration of their real property acquisition process (e.g., 18–24 months from appraisals to project letting). Some agencies are experi- menting with scheduling software tools to conduct what-if scenarios to understand the impact of activity changes within the overall schedule and the critical path of the real prop- erty process. Some state DOTs have also developed tables and red-flag summaries to identify situations that might result in project delays in connection with right-of-way activities. At least one state DOT has used dispersion measures (range and standard deviation) to document variations in the time it takes to complete real property acquisition activities. Other than these examples, the NCHRP Project 20-84 lit- erature review, survey, and interviews did not reveal a more widespread use of systematic techniques and procedures to assess risk in relation to real property activities or to translate that information to other dimensions such as impact (both real property and project-wide), costs (both real property and project-wide), or time and financial contingencies. Documenting and managing risk is an essential element in the implementation of efforts to optimize and streamline processes. Conducting risk assessments involves framing issues within a risk context by considering both the likeli- hood and impact of a given event to trigger a vulnerability, as well as by identifying risk levels and mitigation strategies to address those risks (8). This analysis could be used to provide more realistic estimates of cost and duration with an explicit risk-based representation of contingencies that vary as more accurate information becomes available along the project development process. A risk matrix is sometimes used to show the relationship between likelihood (rows/x-axis) and impact (columns/y-axis), with individual cells showing the result of multiplying a like- lihood rating and an impact rating (9). 2008 International Scan on Right-of-Way and Utilities In September 2008, a scan team composed of representa- tives of several state DOTs, FHWA, private industry, and aca- demia visited Australia and Canada to learn about innovative practices for right-of-way and utility processes that might be applicable for implementation in the United States (10). The study team visited four state transportation agencies in Aus- tralia and two in Canada. This scanning study complemented a 2000 scanning study of European countries that covered Germany, the Netherlands, Norway, and the United Kingdom. Based on the presentation of best practices by the host agen- cies in Australia and Canada, the 2008 study team identified

16 some 20 potential implementation ideas that could merit consideration in the United States. These ideas included the following: • Project development and delivery methods: – Create a template for project-specific roles and respon- sibilities based on project type and configuration. – Promote an earlier integration of real property acqui- sition and utility coordination activities in the project development process. – Establish an operation and maintenance fee for developer- initiated transportation infrastructure. • Real property acquisition: – Promote a cooperative relationship with property own- ers to facilitate the timely acquisition of real property. – Develop GIS-based real property acquisition and asset management systems. – Promote visualization techniques to communicate anti- cipated project impacts to property owners. • Property management: – Develop GIS-based real property acquisition and asset management systems. – Promote active management of real property assets to maximize value and return on investment. – Establish a standard protocol and lease template for utility attachments to roadway structures. – Establish a template for roles and responsibilities of multiple parties that use infrastructure corridors. • Other: – Pursue strategies to facilitate corridor preservation. – Develop a framework to establish proficiency of right- of-way and utility professionals in core disciplines. 2008 Peer Exchange on Acquisition and Relocation Incentive Payments In August 2008, FHWA sponsored a peer exchange to share information on the use of acquisition and relocation incen- tive payments (11). The incentive payment initiative started from two pilot implementations after the 2000 scanning study of European countries (already discussed). The peer exchange highlighted the experiences of several state DOTs with the use of incentives. Overall, the result reported by the states was a reduction in the time to acquire and clear real property and no reduc- tion in property owner benefits. Measuring the impact on administrative, acquisition, legal, and court costs was diffi- cult, however. Incentive practices varied widely among state DOTs. For example: • The Florida DOT reported using a sliding scale of acquisi- tion incentive payments depending on the approved com- pensation amount, ranging from a $1,000 incentive for an approved compensation of up to $1,000 to $150,000 for an approved compensation over $513,500. The Florida DOT reported a significant reduction in real property delivery time, a significant reduction in total payout (compared to the initial appraisal), and an increase in the negotiation settlement rate. • The Indiana DOT reported offering an additional 10 per- cent of the acquisition amount, an additional 10 percent for temporary easements, and an additional 10 percent of the approved moving cost estimate or scheduled moving cost. The relocation incentive was prorated as follows: – 100 percent if the displaced person moved within 30 days. – 60 percent if the displaced person moved within 31 to 60 days. – 20 percent if the displaced person moved within 61 to 80 days. – 0 percent if the displaced person moved after 80 days. • The Wisconsin DOT reported using set dollar amounts with a sliding scale for residential acquisition and relocation incentives and a percentage of the initial offer for business relocation incentives. For example, for residential reloca- tions, the incentive payment was $10,000 if the property was conveyed and vacated within 45 days, $5,000 if within 60 days, $2,500 if within 90 days, and $0 after 90 days. For business relocations, the incentive payment was 5 percent of the initial offer (or $10,000, whichever was greater) if the property was conveyed and vacated within 60 days; 2.5 per- cent of the initial offer (or $5,000, whichever was greater) if the property was conveyed and vacated within 90 days; and $0 after 90 days. 2009 Right-of-Way, Design-Build, and Alternative Contracting Peer Exchange In 2009, FHWA sponsored a peer exchange focusing on the experiences of several state DOTs with design-build contract- ing and the use of alternative contract procurement meth- ods (12). The purpose of the peer exchange was to provide opportunities for peers to share best practices and lessons learned in design-build contracting and project delivery. Les- sons learned and recommendations from the event included the following: • Ensure upper-management buy-in for early right-of-way involvement. • Engage right-of-way professionals early in project development. • Use real property processes that can occur prior to the completion of the environmental review. • Consult with utilities and property owners early in the real property acquisition process.

17 • Establish a reputation for fair real property acquisition negotiations. • Ensure accurate documentation of project scope and pro- cedures in the request for proposals and contract. • Include environmental commitments in the request for proposals and contract. • Co-locate the design and right-of-way teams to facilitate coordination and communication. Feedback from participants in the NCHRP Project 20-84 survey and follow-up interviews was consistent with these recommendations, particularly in relation to earlier partici- pation of right-of-way personnel in project development. 2010 Business Relocation Assistance Retrospective Study In 2010, FHWA conducted a study of business relocation costs (13). A primary focus of the research was to determine costs that a business incurs that would be reimbursable if there were no limits in reestablishment expense payments. The research included a literature review of studies con- ducted from 1996 to 2006, a survey of state DOTs, a review of sample documentation from eight state DOTs, and a survey of businesses that underwent relocation as part of transpor- tation projects in these states. Recommendations from the study included the following: • Increase the maximum reestablishment expense payment, considering that actual reestablishment costs for most businesses far exceed the maximum amount allowed. • Increase the amount of fixed payments for non-residential moves, including refining the definition of net income. • Improve advisory services provided to business owners and operators. • Simplify the relocation process (e.g., by making the search expense payment a lump-sum payment that a business could claim without documenting time and actual costs incurred, and by approving moving cost estimates up to $10,000 by agency personnel). 2012 FHWA Study on Coordination with Railroads for the Acquisition of Real Property In 2012, FHWA completed a study to explore ways that state DOTs could expedite the execution of access agreements and acquisition of real property from railroads (14). As a case study, the research focused on the northeastern United States, specifically states through which Amtrak operates its North- east Corridor trains. The research revealed significant issues related to indemnification, assignment of environmental and other risks, related financial payments, state rights versus fed- eral government rights, and coordination. Recommendations to address these issues included the following: • Negotiate MOUs with Amtrak, outlining how to conduct the review process, including deadlines and realistic expec- tations and timeframes for review and approval. • Meet with Amtrak at least annually to review the process and discuss upcoming projects. • Establish early coordination with Amtrak while projects are still in the conceptual phase, and meet on a regular basis to discuss the status of projects and agreements. • Utilize staff who are knowledgeable about railroad opera- tional requirements to avoid developing concepts that the railroad would find unacceptable. • Establish a system for tracking project progress. • Explore the feasibility of revising existing regulations to reimburse state DOTs for Amtrak’s environmental risk fee. • Update limits and requirements for liability insurance in the federal regulations to eliminate the need for case-by- case federal exemptions to pay the higher limits. • Fund research on the status of Amtrak relative to the states’ power of eminent domain. Real Property Data Modeling Trends State DOTs use a variety of data and document manage- ment approaches to support right-of-way functions (15, 16, 18, 19). Typically, agencies manage real property through a combination of paper records, spreadsheets, various engineer- ing software systems, desktop databases, and custom-built applications. As a reference, Table 2 provides a compilation of databases and systems that was assembled as part of NCHRP Project 08-55A. In most cases, a unique ID identifies a parcel, which may be unique within a project but not necessarily unique across the enterprise. For visualization purposes, some state DOTs generate shaded areas or shapes within their CAD environ- ment to highlight the location of the parcels they are acquir- ing. However, this is not a generalized practice. In some cases, agencies maintain electronic copies of those shaded areas or shapes, but in general, these elements are not included in as- built drawings or official engineering records. The official parcel record is still the deed and other supporting docu- ments such as survey plats and property descriptions that an authoritative agency maintains. State DOTs are beginning to explore the use of geospatial platforms to develop or maintain real property inventories. However, a generalized or universally accepted data model does not exist for the inventory of these assets. At the fed- eral level, the National Integrated Land System (NILS) is a Public Land Survey System (PLSS)-based land management

18 system for the collection, management, and sharing of sur- vey data, cadastral data, and land record data, which involves the United States Department of the Interior’s Bureau of Land Management (BLM) and other stakeholders (20). NILS includes a PLSS data model and four software modules: Sur- vey Management, Measurement Management, Parcel Man- agement, and GeoCommunicator. The Federal Geographic Data Committee (FGDC) Cadas- tral Data Content Standard provides semantic definitions of objects related to land surveying, land records, and land- ownership information (21). The model provides feature and attribute definitions for elements such as cadastral data, par- cels, rights and interests, and restrictions. The model treats parcels as spatial data elements, whereas rights and interests as well as restrictions are non-spatial data elements that affect parcels. The standard includes several logical-level entity- relationship (ER) diagrams that describe entity names and relationships among entities. A subset of the Cadastral Data Content Standard is the Cadastral National Spatial Data Infrastructure (NSDI), which includes a minimum set of attributes about land parcels to facilitate the distribution of cadastral information (22). The Cadastral NSDI has two components: cadastral reference and parcels. The cadastral reference provides elements that are necessary for querying, mapping, and navigation purposes, including information about the survey system used. Parcels may be polygons or points with enough attribute informa- tion to link the spatial component to attribute data produced externally. NCHRP Projects 08-55 and 08-55A NCHRP Project 08-55 (16) and NCHRP Project 08-55A (17) were undertaken to identify data elements to include in a spatial data model for a right-of-way information system. The modeling approach was to use a spatial entity to manage Agency/State System Acronym Primary Functional Areas of Application Alabama Comprehensive Project Management System CPMS Project status, right-of-way mapping, appraisal status, acquisition, relocation, leased property California Right-of-Way Management Information System ROWMIS Highway projects; parcel acquisitions Connecticut Image Records Management System IRMS Document management for right-of-way documents and maps Florida Outdoor Advertising Inventory Management System ODAIMS Outdoor advertising signs regulation Florida Right-of-Way Management System RWMS Most functional areas of real property Indiana Land Record System LRS Land records; status of each parcel Louisiana Appraisal, Acquisition, and Relocation System AARS Appraisal, acquisition, and relocation Maryland Office of Real Estate Management System OREMS Acquisition Michigan Real Estate Management Information System REMIS Most functional areas of right-of-way Minnesota Right-of-Way Electronic Acquisition Land Management System REALMS Right-of-way acquisition, land management Mississippi Parcel Tracking System PTS Full range of right-of-way activities Missouri Realty Asset Inventory Management System RAI Realty assets, sales, leases, and excess properties Nebraska Automated Right-of-Way Management System ARMS Appraisal; negotiation (partial) Nevada Integrated Right-of-Way Information Network IRWIN Property acquisition and property management Oregon Right-of-Way Data Management System RWDMS Enterprise content management for right- of-way processes Pennsylvania Right-of-Way Office Information System ROWIS Appraisal, acquisition, relocation, property management Texas Right-of-Way Information System ROWIS Project setup, mapping, funding, appraisal, negotiations, eminent domain Virginia Right-of-Way Utilities Management System RUMS Most functional areas of right-of-way Wisconsin Transportation Utility and Management System TUMS Correspondences between offices Wisconsin Highway Access Management System HAMS Driveway permits and land division reviews Wisconsin Real Estate Automated Data System READS Most functional areas of right-of-way Table 2. Right-of-way management systems compiled as part of NCHRP Project 08-55A (adapted from [17]).

19 parcels (in the form of spatial cadastral data obtained from the tax assessor’s office or equivalent) and a spatial entity to manage highway project alignments (obtained from project alignment and project end data). Non-spatial entities are linked to the parcel and project entities using one-to-many relationships to handle different aspects or activities of the right-of-way management process. For example, the initial parcel review activity includes project ID and parcel ID as the primary key as well as estimated value, complexity, and appraisal requirement as attributes. Likewise, the lease agree- ment activity includes project ID and parcel ID as the primary key as well as tenant ID, date of lease, term of lease, personal liability insurance, and lease agreement as attributes. Real Property Asset Management Architecture Study In 2008, the Texas DOT completed a research project to develop prototype data architecture to facilitate the inven- tory and management of Texas DOT real property assets (18). The research involved a review of real property management practices and the development of a prototype GIS-based real property asset data model. The researchers used a standalone database environment, a standalone GIS environment, and a web-based environment to test the real property asset data model. Figure 1 and Figure 2 show sample views of the web- based environment, which enables the retrieval of feature- and project-related documents using tabular and/or map views. Figure 1 outlines sheet layouts (including project sheets and right-of-way map outlines) for a sample project in the San Antonio area. Figure 2 includes a zoomed-in view that shows parcels and a customized version of the GIS query tool, which displays attribute data, linkages to documents, and metadata for any parcel selected. Subsequent efforts at Texas DOT focused on the develop- ment of scripts to automate the extraction of parcel bound- aries in Bentley® MicroStation® and the development of standalone or cloud-based parcel visualization tools with simple linkages to other pieces of information such as basic project data or documents (Figure 3, Figure 4). Attempts at using third-party commercial software to extract features were largely unsuccessful. Officials noted that the approach worked efficiently only if the CAD files were clean files. However, it resulted in a very slow process if the CAD files did not use a proper survey-level library, were referenced incorrectly, were not placed in the correct coordinate system Figure 1. Interactive map viewer—document outline view (18).

Figure 2. Interactive map viewer—parcel document view (18). Copyright 2013 Texas Department of Transportation Figure 3. Standalone ArcGIS® tool to visualize parcel acquisition process (23).

21 before processing, or contained line work that did not close properly to form polygons. Because of these difficulties, officials concluded that a man- ual approach to generate parcel polygons was at least as effi- cient as using a script-based procedure, with the advantage that the operator could achieve more predictable results when processing parcels manually. Nonetheless, officials noted the following limitations of the manual approach: • It is difficult to determine the shape of the line work ele- ments that compose a parcel polygon. • It is necessary to import many components into the GIS manually to determine precise boundaries. • It is necessary to allow for additional processing time when dealing with curves. Visualization Techniques for Real Property Acquisition In 2011, FHWA completed a report summarizing the ways state DOTs have used computer-based visualization techniques to facilitate the acquisition of real property for transporta- tion projects (25). The report also outlined barriers prevent- ing the implementation of visualization techniques as well as recommendations to address those barriers. Motivation for the report was the result of a 2009 survey of state agencies by AASHTO indicating that use of visualization techniques to support real property activities was less prevalent than for other project development and delivery areas at state DOTs. The 2009 survey was a follow-up to a 2006 domestic scan on right-of-way and utilities (26) and the 2008 international scan on right-of-way and utilities (10), which reported on the use of three-dimensional (3D) animations to communicate real property requirements and impacts to property owners and relevant stakeholders to help avoid or mitigate the costs of con- demnation proceedings. Although discussions about visualization techniques usu- ally involve the use of 3D animations, the range of visual- ization techniques is quite broad. Depending on the need, it may be possible to develop two-dimensional (2D) mod- els, 3D models, and four-dimensional (4D) models (i.e., 3D models plus time, where the time component enables the development of views or animations that describe a specific business process) (27). Five-dimensional (5D) models (i.e., 3D data plus time and cost) and six-dimensional (6D) mod- els (i.e., 3D and project lifecycle management data) are also possible. In recent years, considerable discussion has focused on using building information modeling (BIM) techniques Copyright 2013 Texas Department of Transportation Figure 4. Online tool to visualize parcel acquisition process (24).

22 to develop digital representations of the physical and func- tional characteristics of a facility. As opposed to traditional 3D modeling, BIM involves representing the components of a facility as individual objects that have geometry, attributes, and relationship characteristics (28). The results of the 2011 FHWA report indicate that the type of visualization techniques used for acquiring real property varies greatly among agencies. The most common technique involves using 2D drawings, with or without an aerial imag- ery background. Agencies also use applications such as Google Earth®. Agencies find 2D drawings to be a cost-effective tool to support straightforward real property acquisitions. However, a common complaint from property owners is that traditional 2D drawings are just lines on paper that are difficult to under- stand. Agencies tend to justify more advanced visualization techniques for large, complicated real property acquisitions. Problematic acquisitions can also benefit from the use of advanced visualization techniques, but the effectiveness may be questionable because problematic acquisitions are often not identified as such until the end of the acquisition process. Benefits of using advanced visualization techniques include a more effective communication of project impacts to prop- erty owners and other stakeholders as well as fewer errors and more effective project coordination. State DOTs also indi- cated opportunities for a more effective determination of the amount of real property to be acquired and a potential reduc- tion in the number of acquisitions going to condemnation. At the same time, agencies noted barriers preventing the imple- mentation of visualization techniques, such as a lack of aware- ness about how to use visualization techniques to assist with the acquisition of real property and a perception that visual- ization techniques are costly to produce and thus are only use- ful for a small number of large projects. Agencies also noted a lack of internal resources, including funding and personnel with expertise in developing visualizations, and concern that visualizations might not look exactly like the actual project (potentially raising the issue of liability for the agency). Recommendations for implementation included the following: • Reach out to visualization staff within the agency to learn about visualization techniques that may be available to support the acquisition of real property. • Use visualizations to supplement, not replace, existing prac- tices or tools. • Spread the cost of developing visualization materials among several units within the agency. • Develop a standard process to evaluate the effectiveness of using visualizations for real property acquisitions. • Promote the use of portable electronic devices such as lap- tops, tablets, and mobile phones to assist with the demon- stration of visualizations to property owners. • Use visualizations for the appropriate purpose, striking a balance between stakeholder expectations and the level of visualization sophistication actually needed. • Determine the degree to which visualizations can acceler- ate the acquisition of real property. • Create guidelines and contract templates for the develop- ment of visualization products, taking into account the needs of various stakeholders within the agency (e.g., plan- ners, designers, traffic engineers, and real property), includ- ing requirements for visualization complexity and other requirements such as preparing for and testifying in court. The guidelines and templates should also take into account specific types of data that visualization contractors might require, ranging from roadway alignments and geometry to digital terrain models (DTMs), striping plans, grading plans, and traffic counts. 2012 Property Management Tools and Techniques Study In 2012, FHWA scheduled three regional roundtables with 11 state DOTs to discuss property management issues and strategies to overcome those issues (29). The focus of the roundtables was the use of information systems to support property management workflows. The range in practices in this area is quite wide, from state DOTs that have highly func- tional computerized systems to state DOTs that rely on man- ual methods or spreadsheet tools. Regardless of approach or implementation level, agencies face very similar challenges, including (a) property inventories that are user unfriendly or too old to allow for expedited updating procedures, and (b) lack of integration with geospatial tools at the agency. Feedback from the 11 participating state DOTs resulted in the following requirements for developing a model property management system: • Functional requirements: – Inclusion of feedback from other units within the agency. – Promotion of property sales (e.g., by populating a pub- licly accessible website dedicated to listing properties that are on the market). – Focus on the most appropriate features, including sur- plus property, utility permits (and milestones in the per- mitting process), project status (active versus closed), cell phone tower leases, and parcel numbers. – Notification of encumbrance status and other pertinent information to others. – Tracking of Title 23 funding. • Technical requirements: – Linkage to mobile devices. – Support for electronic signature and validation. – Use of automated forms.

23 – Integration with other agency systems, including GIS. – Use of data quality protections. – Balance between security and ease of use. – Clear requirements for consultants. – Employment of limited application development dura- tion. – Deployment of a limited number of modules at a time. – Focus on ease of data entry. – Use of a simplified search mechanism. – Assurance of adequate query and reporting capabilities. – Support for printing capabilities. – Assurance of adequate computing power. • Other requirements: – Frequent assessment of data field needs. – Use of dedicated staff. Prototype Platform and Recommendations for Managing Real Property Data at the Florida DOT In 2013, the Florida DOT completed a research project to develop recommendations to improve the management of real property and utility data at the department (19). The research included a comprehensive review of MicroStation design libraries in use at the department and a determina- tion on how to apply this information to the development of a data model and protocol for the extraction of real property and utility data from MicroStation into an ESRI® ArcGIS® environment. The review of MicroStation design librar- ies revealed the use of graphical elements (mainly property lines and existing and proposed right-of-way lines) to depict real property being acquired (Figure 5). Although useful for developing design files in MicroStation, this practice makes it more difficult to determine the boundaries of parcels on design files, especially for stakeholders who may not be familiar with Florida DOT design files or CAD standards. It also makes it difficult to extract features into a GIS environ- ment in a systematic way. Closed polygons would be useful to address this problem (Figure 6). However, there was not a dedicated polygon or shape parcel level in the MicroStation design libraries. The research team considered several options to identify and merge parcel boundaries to create polygons, including generating parcel shapes in ArcGIS, generating parcel shapes in MicroStation using features from the right-of-way file, and generating parcel shapes in MicroStation using Bentley GEOPAK® data. A major advantage of the third approach is that the Florida DOT already collects and processes field sur- vey data in GEOPAK, and department personnel are familiar with it. The software environment already contains all the functions to generate parcel polygons, but a missing piece was a systematic protocol for district personnel because cur- rent Florida DOT protocol does not require the use of parcel polygons within MicroStation. As a result, the research team developed a generalized protocol to develop parcel shapes in MicroStation, which included adding the following real property shape levels to the right-of-way design library: fee simple, easements, leases, licenses, and condominium units. Other real property levels could be added during implemen- tation. The research team also produced recommendations on how to remove inconsistencies in the naming of standard MicroStation levels. Figure 5. Sample Florida DOT design drawing with property parcels (19).

24 Existing right-of-way line Proposed right- of-way line Property lines Figure 6. Boundary of Property Parcel 106 in Florida DOT sample design drawing (19).