Department of Transportation
Division of Planning and Policy
proposed
2313 Policies and Procedures for Acquisition of Certain Real Property Interests
Background
The Delaware Department of Transportation, through its Division of Planning, seeks to adopt regulations to ensure that its policies and procedures for the acquisition of real property are transparent, consistent, cost effective and fair.
The Department has broad statutory authority to acquire property in connection with state highway projects. However, an “Advanced Acquisition Committee” must review certain acquisitions of real property after the approval of the preferred alternative. The Department has adopted policies governing such acquisitions; nonetheless, these existing policies only apply to purchases of “fee simple” interests, and do not expressly apply to reservations. While the Committee has the statutory authority to determine whether certain advanced acquisitions are consistent with state planning goals, it does not currently have in place a process for reviewing the merits of such transactions.
The regulations below will implement specific recommendations for advanced acquisitions set forth in the Report of the Governor’s Chief of Staff to Governor Markell dated January 7, 2011 (the “Report”). Specifically, the regulations will (1) require that the Committee review not only advanced acquisitions, but reservation agreements as well; (2) provide a process for the Committee to review the merits of advanced acquisitions and reservation agreements; (3) require the Department to obtain independent appraisal for advanced acquisitions and reservations; (4) require that advanced acquisitions and reservations be reviewed by legal counsel; and (5) require that the terms of advanced acquisitions and reservations be reflected in an agreement signed by the Department and the property owner. In addition, the regulations also set out the process for the Committee to conduct its consistency review of certain real property acquisitions proposed by the Department, as contemplated by 17 Del.C. §137(a)(2).
The Department previously accepted written comments on the proposed Regulations Establishing Policies and Procedures for Advanced Acquisition of Real Property from February 1, 2011 through March 5, 2011. Based on those comments and other suggestions, the Department drafted additional changes to these proposed regulations. This second draft, submitted for further public comment, incorporates the provisions described above, and further require the Advanced Acquisition Committee to review “Special Property Acquisitions, as defined below.”
Public Comment Period
The Department will take written comments on the proposed Regulations Establishing Policies and Procedures for Acquisition of Certain Real Property Interests from June 1, 2011 through June 30, 2011. The proposed Regulations appear below.
Any requests for copies of the proposed Regulations, or any questions or comments regarding this document should be directed to:
Cleon L. Cauley, Sr., Acting Secretary
Delaware Department of Transportation
P.O. Box 778
Dover, DE 19903
(302) 760-2303 (telephone)
(302) 739-2895 (fax)
cleon.cauley@state.de.us
2313 Policies and Procedures for Acquisition of Certain Real Property Interests
1.1 The Department of Transportation has broad statutory authority to acquire public or private property and property rights in connection with the Department’s jurisdiction. Traditionally, the Department has acquired the necessary property rights upon final right-of-way plan approval for a project. In certain instances, the best interests of the state and individual property owners may be better served if such interests are either acquired or reserved by the Department prior to right-of-way plan approval. The purpose of this regulation is to enumerate the specific policies and procedures governing the acquisition and reservation of certain real property by the Department. It also sets out the process for the Committee to conduct its consistency review of certain real property acquisitions proposed by the Department, as contemplated by 17 Del.C. §137(a)(2).
1.2 In addition, the Department desires to have certain special property transactions reviewed and approved by the Committee established under Section 137(a)(2), that are not necessarily tied to a highway project location. Furthermore, certain other transportation facility acquisitions are carried out pursuant to 2 Del.C. §1309(5), which are not subject to approval by any other public body. Nonetheless, for these transactions, the Department believes it would be in the public interest to obtain a review and comment about the proposed acquisition from the Committee.
“Advanced acquisition” means the acquisition by the Department of any interest in real property prior to final right-of-way plan approval of the project for which such interest is being acquired. For purposes of this regulation and the Department’s Real Estate Manual, “advanced acquisitions” shall also include, without limitation, reservations.
“Advanced Acquisition Committee” or “Committee” means the committee created pursuant to 17 Del.C. §137(a)(2) and comprised of the Secretary of the Department of Natural Resources and Environmental Control; the Secretary of the Department of Transportation, the Secretary of the Department of Agriculture; the Director of the Delaware Economic Development Office; the Governor's Chief of Staff; a member of the Senate designated by the President Pro Tempore of the Senate; a member of the House of Representatives designated by the Speaker of the House of Representatives; a member of the public designated by the President Pro Tempore of the Senate; and a member of the public designated by the Speaker of the House of Representatives.
“Consistency review” shall mean the review by the Committee pursuant to 17 Del.C. §137(a)(2) of acquisitions for new corridors, expansion of existing corridors, or the acquisition of real property as part of the Department's Corridor Capacity Preservation Program.
"Corridor" means a particular route of one or more highways of this State, serving predominantly statewide and/or regional travel needs. By way of example and not limitation, State Routes 1, 2, and 141, and U.S. Routes 13, 113, and 202 are corridors under this definition.
“Department” means the Delaware Department of Transportation.
“Expansion of existing corridors” means the proposed construction of additional through lanes for a minimum of three miles, such as to significantly increase the traffic-carrying capacity of a corridor already in existence at the time of the proposed capital improvement. By way of example and not limitation, the dualization of U.S. Route 113 between Milford and Georgetown, and the State Route 1 Third Lane project between Rehoboth Avenue Extended and the Five Points intersection with U.S. Route 9, would have been considered expansions of existing corridors under this definition at the time of their planning and construction.
“Hardship acquisition” shall mean an advanced acquisition to resolve a specific hardship imposed upon the owner as a result of a project including, without limitation, long-term leases and reservations between an owner and the Department. Hardship acquisitions shall include situations in which an owner must relocate for personal reasons (e.g., job transfer, death in the family, retirement plans or medical reasons) and is unable to sell his or her property as a result of a project.
“New corridor” means a proposed capital improvement for a corridor-level highway, all or substantially all of which is to be built on previously unused alignment. By way of example and not limitation, the tolled portion of State Route 1 through Kent and New Castle County would have been considered a new corridor under this definition, at the time of its planning and eventual construction.
“Owner” shall mean the owner of the real property interest, which the Department seeks to acquire or reserve.
“Preferred alternative” shall mean the alternative that the Department believes would fulfill its statutory mission and responsibilities giving consideration to economic, environmental, technical and other factors.
“Project” means an undertaking for a capital improvement by the Department for a new corridor, expansion of an existing corridor, or acquisition of real property as part of the Corridor Capacity Preservation, and which uses state and/or federal funds.
“Protective acquisition” shall mean an advanced acquisition to allow the Department to protect from development real property within a project area in instances where development would increase the eventual cost of property acquisition to taxpayers or would limit location alternatives for the project. Protective acquisitions shall include, without limitation, long-term leases and reservations to allow the Department to protect from development real property within a project area.
“Real Property” means a fee simple interest in real estate for any such acquisition, and shall also include any lesser property interest proposed for acquisition under the Corridor Capacity Preservation Program (17 Del.C. §145).
“Reservation” means a commitment by the Department to compensate an owner of any interest in real property, in exchange for an agreement by the owner to refrain from further developing his or her property or designated portions thereof.
“Special Property Acquisition” shall mean the acquisition of any interest in real property for Department transportation projects that are not necessarily related to the highways and streets under its jurisdiction and control. By way of example and not limitation, such acquisitions shall include acquisitions for transit maintenance facilities, commuter park-and-ride lots and similar facilities for the Delaware Transit Corporation pursuant to 2 Del.C. §1309(5); acquisitions of land to provide clear space for runway approaches for publicly owned or public-use airports; and other acquisitions of interests in real property in connection with Department transportation projects pursuant to 17 Del.C. §137 or any other legal authority.
3.1 Depending upon the availability of funding, the Department may consider requests by owners for hardship acquisitions.
3.2 Written Request - The owner of the real property must submit to the Department a written request for a hardship acquisition.
3.1.1 A request for hardship acquisition of property located in New Castle County shall be submitted to the:
North District Real Estate Manager
Delaware Department of Transportation
250 Bear Christiana Road
Bear, DE 19701
3.1.2 A request for hardship acquisition of property located in Kent County or Sussex County shall be submitted to the:
South District Real Estate Manager
Delaware Department of Transportation
P.O. Box 778
Dover, DE 19903
3.3 Criteria. Upon receipt of a written request for a hardship acquisition, the Department and its legal counsel shall initiate an internal review process to determine whether the property meets the criteria set forth herein. At minimum, the request must demonstrate to the Department’s satisfaction that:
3.3.1 The property has been marketed for at least six (6) months; and
3.3.2 The realtor, or owner in absence of a realtor, must certify and provide evidence that he or she is unable to sell the property at a reasonable price as a result of the proposed project; and
3.3.3 The owner must be able to document a compelling reason for his or her move from the property, e.g., job transfer, death in the family, retirement plans or for medical reasons.
3.4 If an owner demonstrates to the Department’s satisfaction that a hardship acquisition is appropriate, then such proposed acquisition shall be considered in accordance with the procedures set forth in Section 5.0.
4.1 Depending upon the availability of funding, the Department may consider requests for protective acquisitions.
4.2 Written Request - All requests for a protective acquisition must be in writing.
4.2.1 A request for protective acquisition of property located in New Castle County shall be submitted to the:
North District Real Estate Manager
Delaware Department of Transportation
250 Bear Christiana Road
Bear, DE 19701
4.2.2 A request for protective acquisition of property located in Kent County or Sussex County shall be submitted to the:
South District Real Estate Manager
Delaware Department of Transportation
P.O. Box 778
Dover, DE 19903
4.3 Criteria. Upon receipt of a written request for a protective acquisition, the Department and its legal counsel shall initiate an internal review process to determine whether the property meets the criteria for a protective acquisition. At minimum, the request must demonstrate to the Department’s satisfaction that:
4.3.1 Development would increase the ultimate cost of the acquisition to taxpayers; or
4.3.2 Development would limit location alternatives for a project.
5.1 For advanced acquisitions satisfying the criteria set forth in Section 3.2 or 4.2, or for Special Property Acquisitions, as the case may be, the Department shall have an appraisal performed by its independent appraisers in accordance with the Department’s Real Estate Manual.
5.2 Following receipt of the appraisal, the Department and its legal counsel shall discuss the potential terms of an agreement and the justifications therefor, including the nature of the interest to be acquired (i.e., acquisition, reservation, leasehold); the necessity of acquiring such interest and the existence of any alternative transactions; the fair market value of such interest; the amount of land required; the duration of the agreement; and such other factors as may be relevant. Following such discussion, counsel shall prepare a detailed term sheet reflecting the material terms of the proposed transaction.
5.3 The Department will present the term sheet to the Advanced Acquisition Committee at a scheduled meeting as soon as reasonably practicable. The Committee shall consider the terms of and rationale for the proposed transaction and may either approve, approve with conditions, or reject such transaction. If the Committee approves the proposed transaction or approves with conditions, the Department shall negotiate the final terms with the owner. For Special Property Acquisitions made under the authority of 2 Del.C. §1309(5), the Committee’s review shall be considered an advisory opinion.
5.4 The material terms of all advanced acquisitions shall be reflected in an agreement prepared or reviewed by the Department’s legal counsel and signed by the owner and an authorized representative of the Department. For any agreements enacted prior to the effective date of this regulation but for which no contract exists that (a) sets forth the material terms of such agreement and (b) is signed by both the Department and owner, the parties thereto shall execute an agreement in conformance with this Section 5.4 no later than July 31, 2011.
6.1 The Committee shall conduct a consistency review for certain proposed real property acquisitions by the Department. These acquisitions consist of those real properties determined by the Department as necessary for its projects for new corridors, expansion of existing corridors, real property affected by the Corridor Capacity Preservation Program, and Special Property Acquisitions. This review shall be conducted under the following time frames:
6.1.1 For the preferred alternative for existing corridors or the expansion of existing corridors – After the projects are approved by the Council on Transportation.
6.1.2 For the Department’s Corridor Capacity Preservation Program and Special Property Acquisitions – Prior to any real property acquisitions.
6.2 The consistency review shall confirm that the Department’s proposed real property acquisitions further the State’s overall goals for land use planning, as expressed by project authorizations and appropriations adopted by the General Assembly.
6.3 At the scheduled meeting for the consistency review, the Department shall present to the Committee such evidence as it deems necessary to demonstrate that the proposed acquisitions are consistent with state planning goals. This evidence shall include:
6.3.1 a detailed visual depiction of the proposed acquisitions;
6.3.2 the relevant project pages from the Capital Improvement Program adopted by the Council on Transportation, pursuant to 29 Del.C. §§8409 and 8419;
6.3.3 the relevant project authorizations as described in the relevant Bond and Capital Improvements Acts adopted by the General Assembly;
6.3.4 where applicable, the Department’s adopted Corridor Capacity Preservation plan for the corridor for which the proposed acquisition would be made, along with other evidence showing how the acquisition furthers the Department’s goals under that Program; and
6.3.5 where applicable, the relevant project approvals obtained from the Federal Highway Administration.
6.3.6 evidence showing how the proposed acquisition furthers the Department’s goals for the particular project purpose, including a cost/benefit analysis and other relevant data;
6.3.7 a description of how the project fits within the State’s Strategies for Policies and Spending; and
6.3.8 documentation of the State Planning Office’s approval of the project.
6.4 If the Committee determines that the proposed acquisition is consistent with state planning goals, it shall then notify the Department in writing. For Special Property Acquisitions made under the authority of 2 Del.C. §1309(5), the Committee’s determination shall be considered an advisory opinion.
6.5 If the Committee determines that the proposed acquisition is not consistent with state planning goals, it shall then notify the Department in writing, with an explanation of the basis for the Committee’s determination.
