Liability of Design-Builders for Design, Construction, and Acquisition Claims (2015) / Chapter Skim
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Pages 28-45
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28 public records laws, 2) issues relating to ownership of the ATCs, 3)
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29 regulations apply to any project that uses federal funding, regardless of the amount of funds used and regardless of whether federal funds are used to acquire real property for the project.114 The steps that are typically followed in property acquisitions, consistent with requirements of the Uniform Act, are described below.
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30 Constitution, the government may exercise this power only upon paying "just compensation."118 In addition to complying with statutory and regulatory procedures, each agency, in using its eminent domain power, must ensure compliance with both federal and state constitutional and statutory requirements concerning "public use and necessity" and principles of "just compensation." Compliance requires careful analysis of the appropriate actions to be taken, because the federal definition of "just compensation" does not always coincide with the definitions of the term that apply in the various states. As just one example, some states require the condemning agency to compensate affected business owners for lost business goodwill,119 although the federal rules do not permit recovery for goodwill losses.120 Every state's process is unique, but generally the acquiring agency holds a public hearing before making a formal decision to condemn, allowing due process to the landowner in the form of prior notice of the acquisition and an opportunity to be heard.121 In California, the acquiring agency usually must adopt a "Resolution of Necessity" at a public hearing, which requires a determination that: 1)
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31 The Uniform Act's purposes are to: 1) provide uniform, fair, and equitable treatment of persons whose real property is acquired or who are displaced in connection with federally funded projects; 2)
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32 of operation. At the hearing, the agency must prove the necessity of the quick-take.134 In some states, the quick-take authority is limited to certain agencies, types of takings, or jurisdictions.135 In one particularly complicated example, the Maryland Constitution contains detailed provisions for different quick-take requirements and procedures in different cities and counties within the state, including restrictions precluding any quicktake opportunities in some situations.136 Other alternatives to securing possession through a court action include negotiation of a right-of-entry agreement or a possession and use agreement with the landowners.
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33 satisfying certain conditions in the procurement documents and complying with limitations on work that may proceed before the NEPA process is complete.140 Although not the subject of this digest, perhaps the most significant impact concerns the possibility that the NEPA process could conclude with a "no project" determination, resulting in the need to terminate the design–build contract. It is also possible that, if the environmental review process has not been completed prior to contract award, the final determination will result in changes in the project, affecting right-of-way acquisitions as well as the scope of the design–builder's work.
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34 D Assessment of Right-of-Way Risks As discussed previously, 1)
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35 In some cases, most often for so-called "greenfield" projects, the project envelope may be based on the footprint analyzed in the environmental documents and, therefore, be larger than needed for construction of the project improvements. This approach is often coupled with use of a "basic configuration" concept, giving the design–builder flexibility to make changes to the alignment included in the agency's conceptual design, so long as the new design conforms to contract requirements and remains within the specified envelope.154 One downside to this approach is that it may be difficult for the agency to rely on the project envelope as the basis for eminent domain proceedings, as the landowner may be able to argue that the area includes property not necessary for a public use because of the possibility that the final design may not incorporate the property in question.155 For these types of projects, right-of-way acquisition is necessarily intertwined with the final design process, making it difficult for the agency to provide a schedule for acquisitions in the procurement package.
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36 builder's work.161 This can be further complicated where the remediation technique necessary for the proposed project is more complicated or expensive than any remediation the landowner would have needed to perform absent the proposed project. A wide divergence exists in the various states concerning how deductions from fair market value, if any, are applied when the government condemns contaminated property.162 The specific requirements applicable to the jurisdiction need to be accounted for in budgeting for a project that involves acquisition of contaminated properties.163 • Inability to exercise eminent domain authority.
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37 acquired. The risk of a major change in alignment at that point in the development process is quite low, as political preferences and public input would have been considered through the environmental approval and design and property acquisition processes.
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38 design–builder had the ability to identify additional properties and was responsible for preparing legal descriptions and other specified documentation for any parcels outside the planned right-of-way envelope. The design–builder was also required to pay the cost of acquiring any such additional parcels.
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39 design–builder, alternative approaches that it may wish to consider include: • Assigning responsibility to the design–builder for all aspects of the acquisitions, from negotiation to litigation, with the public agency retaining responsibility for determining the necessity of acquisitions. This approach is more commonly seen for public–private partnerships, because it entails transfer of significant risk to the contractor.
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40 limited to circumstances in which the agency fails to perform its responsibilities in a timely manner.
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41 which the Department has an unsettled condemnation case, the same original appraiser shall value the TE. Obtain Department Approval of the value determination prior to any offers to landowners [sic]
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42 to review the schedule promptly after the contract is awarded and to consult with the agency regarding any desired changes in priorities. To the extent that the schedule is driven by allocation of agency resources, the agency may be able to modify the schedule, but in some cases the schedule may be set based on factors outside the agency's control, in which case the agency may not be able to accommodate the design–builder's requests.
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43 construction, the developer of adjoining property modified its subdivision plan to include additional lots, placing fill on property adjacent to the planned right-of-way to support the new lots. This increased the cost of building the toll road as originally planned, since the original plan did not contemplate the need to provide lateral and subjacent support for the additional lots.
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44 the design–builder, this becomes a non-issue, as the design–builder would be able to account for the estimated savings in its pricing. As noted previously in this section, VE provisions found in some contracts, including the UDOT I-15 CORE contract, would allow the design–builder to share in the agency's cost savings that result from not having to pay right-of-way costs.
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45 As an alternative, if the project has an approved Real Estate Acquisition Management Plan (RAMP) , the design-builder can certify that it will follow the approved RAMP.194 The proposed regulations contain provisions that allow local transportation agencies to develop their own right-of-way manuals and to thereafter follow (and have their design–builders follow)
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