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Section 3: Preparing Right of Way Acquisition Estimates for New Projects

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Overview

During advance planning for a new project, the estimated cost of right of way must be accurately developed. Alignment selection and overall project financial feasibility may be critically impacted by right of way cost estimates; therefore, the estimates must be as accurate as timing and circumstances permit.

Contemplated projects usually fall into two categories:

The completely new right of way is usually more economical because the design avoids the more expensive improvements. The greatest challenge encountered here is in estimating the value of the remainder.

The area of economic influence will be the same unit values for the land indicated by the market data for the area. To this, the appraiser adds the contributory value of the improvements within the acquisition, and the element of damage or enhancement to the remainder, if any.

Sketches of certain improvements, including their size, nature of construction, probable interior installations, degree of depreciation, etc. are essential to substantiate the estimate and make proper adjustments, especially when right of way width may change.

Therefore, the value of the land areas with the same economic influences, plus the depreciated value of the improvements within that area, plus or minus damage or enhancement to the remainder, if any, equals the estimated cost of acquiring right of way for a particular segment.

The number of parcels and classification of properties involved are also essential for a determination of the cost of appraisal fees, as well as estimated eminent domain costs consistent with similar experiences in the area. These items are essential costs of right of way acquisition and must be included.

Other items that ultimately must be included are:

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Preparing Project Data Information

Every new project has physical and economic challenges unique to it, which must be understood before an acceptable estimate is accomplished. Without this preparation, the review appraiser is usually limited in his/her value recommendation to a value indicated by one of two appraisals. The appraisal information relative to any project is too diversified for proper retention, particularly if the project is of any consequence. Therefore, the accumulation of the following information in advance will be helpful in subsequent project development:

Since staff appraisers prepare most right of way estimates, a considerable portion of the above information should be in the file. Completion of the comparable sales map and correlation with appropriate city and county maps augment this information. Sales data for all classifications of properties in all similar areas is accumulated and keyed to the right of way map. Proper accumulation and presentation of this data in an easily understandable fashion is not simple; yet, once accomplished, it meets three fundamental requirements:

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  • intelligent assignment matches current contracted appraiser qualifications with the complexity of the parcels to be appraised;
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  • determination of proper appraisal fees, and development of a work authorization requests based on complexity level of the assignment; and
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  • a more accurate estimate of right of way costs for funding.

With this information at the ROW staff aprraiser's disposal, he/she is now in a position to make appraisal work authorization assignments and review the appraisal reports.

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