2018 Louisiana Transportation Conference Property Management: The Ins and Outs of the Property Disposal Process

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1 2018 Louisiana Transportation Conference Property Management: The Ins and Outs of the Property Disposal Process 1

2 Presentation Summary Location and Purpose of LDOTD Property Management office Federal, State and Departmental Rules & Regulations Identifying Unneeded or Excess Property Different types of Excess Property Obtaining a Disposal Determination Methods of Disposal Future Improvements Questions 2

3 Where is LDOTD Property Management? Physically located in the LDOTD Headquarters Building 3 rd Floor East Wing Organizationally falls within Office of Engineering and Real Estate Section Support Services Unit Property Management Staff Jamie Boullion Brandi Newman Dorian Beckwith Rhett Desselle, II 3

4 Purpose of LDOTD Property Management Manage the inventory of property owned by the Louisiana Department of Transportation & Development (LDOTD) Systematically work to reduce LDOTD property inventory by disposing of excess property Reduces the liability and maintenance costs of the Department 4

5 Federal, State and Department Rules & Regulations for Disposal of Excess Property 5

6 Federal Regulations: CFR 23 Section Management LDOTD shall specify procedures in an approved ROW Manual for determining when a real property interest is excess and may be disposed of in accordance with this part Current fair market value must be charged for the use or disposal of all real property interests if obtained under title 23 (a) Funds received must be used for transportation purposes. (b) Current fair market value is determined by state statutes and state court decisions. 6

7 CFR 23 Section Disposals Real property interests determined to be excess to transportation needs may be sold or conveyed to a public entity or to a private party. Federal, state and local agencies shall be afforded the opportunity to acquire excess real property considered for disposal when real property interests have potential use for parks, conservation, recreation, or related purposes, allowed by state law. Real property interests may be retained by LDOTD to restore, preserve or improve the scenic beauty and environmental quality adjacent to a transportation facility. Disposal actions for less than fair market value require a public interest determination and FHWA approval. 7

8 Louisiana Constitution Article 1 Section 4 (H) LDOTD shall not sell or lease property which has been expropriated and held for not more than 30 years without first; Offering the property to the original owner or heir, or, if there is no heir, to the successor in title to the owner at the time of expropriation at current fair market value, after which the property can be transferred only by competitive bid open to the general public. After 30 years from the date the property was expropriated the property may be sold or transferred as provided by law. 8

9 LA R.S. 48:221 Disposition and Exchange of Excess Property Excess property may be sold to the highest bidder after advertisement for bids twice within a 30-day period. The final advertisement must appear at least 15 days prior to sale in the official journal of the parish in which the property is located. However, the secretary shall offer to sell the property at private sale to the vendor who sold the property to LDOTD upon payment of its current appraised market value. However, the secretary shall first offer to sell the property to the vendor s successor in title, or to the owner of the land whose property or any portion thereof is separated from a highway by such excess area, upon payment of its current appraised market value. 9

10 LA R.S. 48:221 Disposition and Exchange of Excess Property (cont.) The advertisement shall accurately describe the location of the property, all conditions of the sale and the exact time and place where the bids will be presented, opened and read. All bids shall be publicly presented, publicly opened, and publicly read on the same day presented. 10

11 LA R.S 48:224 Abandonment of Highway and Sale by Department Secretary may abandon sections of highway no longer used by the public where the department only owns a servitude Prior to abandonment the secretary shall give notice to: Local government authorities Public utilities with permits or right of way agreements Each member of the legislature whose district the section of highway to be abandoned is located Department should provide proper legal notice, record the abandonment and post adequate signage. 11

12 LADOTD Policies Concerning disposal and abandonment EDSM I Provides the policies and procedures for the abandonment and disposal of unneeded highway right of way. 12

13 How is LDOTD excess property identified? Either by internal request or inquiry from general public Property Management will review property disposal request to determine: Does LDOTD actually own the property? If so, what property rights does the department own (Fee, Servitude, etc.)? Was the property acquired amicably or by expropriation? When was the property acquired? What type of property (U.R., Right of Way, etc.)? All of these details are important in determining how the disposal will be handled 13

14 Different Types of Excess Property Uneconomic Remainders Excess Right of Way (Servitude or Fee) Excess Real Property Adversely Impacted Property 14

15 Uneconomic Remainder (UR Parcel) Also known as residual property, it is the remainder of an owner s property purchased in addition to the required right of way. Why are remainders acquired? Determined to have little to no utility or value if kept by the owner The remaining balance of land meets certain size or distance criteria LA R.S. 48:221 states that the Department may acquire by purchase or expropriation, the remainder of a lot that has an area less than 50% of the area of the original acquisition or when the greater linear dimension of the remaining part, measured from the nearer right of way line, and perpendicular to the axis of the road, is less than 50 feet. 15

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17 Excess Right of Way Acquired or used by LDOTD as road right of way Owned in servitude or fee (in the 1970 s, LDOTD started acquiring mostly in fee title) Later declared unnecessary for Departmental purposes Example: A piece of property was bought by the Department in order to build a bridge. Later, that bridge is replaced at different location. The property which originally held bridge could be deemed Excess Right of Way. 17

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19 Excess Real Property Real Estate owned by LDOTD but no longer needed Examples are maintenance units, radio towers, district offices, etc. 19

20 Headquarters Building 20

21 Adversely Impacted Property Real property acquired because it is determined by the Real Estate Administrator to suffer severe negative impacts as a direct result of an acquisition. Often for safety reasons / proximity to highway Typically only involves improvements but may include the associated land. Adversely Impacted Properties are almost always acquired amicably. 21

22 OLD PORTION OF ROAD NEW PORTION OF ROAD FORMER HOME SITE 22

23 Obtaining a Disposal Determination Property Management collaborates with appropriate LDOTD engineering staff to obtain a disposal determination A property disposal request package is prepared Sent to District Engineer Administrator 1 st for a disposal recommendation Items included in the property disposal request package: Interdepartmental memo requesting a disposal recommendation Relevant maps clearly identifying the property to be disposed Any relevant documentation that may help clarify the property area (Act of Sale, etc.) 23

24 Obtaining a Disposal Determination (cont.) If the District Administrator recommends that LDOTD retain the property The disposal request ends and Property Management notifies the requestor If the District Administrator recommends that LDOTD dispose the property Property Management then routes the disposal request package to various other engineer administrators for their recommendations based on LDOTD rights and property type 24

25 Recommendations (R) and Approvals (A) by property type 25

26 Obtaining a Disposal Determination (cont.) Property Management will continue to facilitate communications with all appropriate engineer administrators until a consensus recommendation is reached The consensus recommendation is then forwarded to the approving authority for approval After all approvals have been received, the property is officially declared excess and Property Management will request an appraisal Once the current fair market value of the property is set, Property Management can move towards selling the property 26

27 Partial Disposals If only a partial disposal is approved, a survey with property description will be needed for preparation of the conveyance instrument Surveys and property descriptions are requested from and provided at the expense of the external requestor If the requestor is an internal LDOTD employee, the disposal could stall if internal resources are not sufficient to provide the property survey 27

28 Methods of Excess Property Disposal Private Sale Public Bid Abandonment of Servitude 28

29 Private Sale For excess property acquired amicably or expropriated more than 30 years ago (per LA RS 48:221): 1 st - Offered to owner of land separated from a highway by such excess area 2 nd - Offered to original vendor or vendor s successors in title 3 rd - Offered to highest bidder at public bid For excess property expropriated less than 30 years ago (per LA Constitution): Offered to the original owner or heirs, or if there is no heir, to the successor in title of the owner at the time of expropriation Act of Sale executed upon payment of the current appraised market value 29

30 Public Bids Bid lettings occur on the third Thursday of the month at 10:00 A.M. in the LDOTD Headquarters Building Auditorium Properties are advertised twice within a 30-day period and at least 15 days prior to sale in the official journal of the parish in which the property is located Properties listed for current appraised market value 30

31 Abandonment of Servitude Servitudes grant the Department a right to use the property Examples could include: Right of Way, drainage servitudes and Control of Access Abandonment of servitude relinquishes the Departments rights to use Servitudes can be abandoned In general, servitudes cannot be sold or transferred As an exception, servitudes of Right of Way may be transferred to a public entity to be used as a public road 31

32 Plans for Improving Efficiency In The Future GIS/Mapping of inventory currently underway. Will help to identify unknown areas of property that LDOTD owns Look into possibility of utilizing ESRI s System of Engagement initiative to streamline communication with engineering staff when obtaining a disposal determination Look into receiving electronic bids 32

33 Questions and Contact Information Jamie Boullion Asst. R.E. Administrator - Support Services jamie.boullion@la.gov