WisDOT Statewide Real EstateTraining Conference – May 14, 2013

Managing Second Offers

By Jim Kuehn – SW Region RE Supervisor

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Managing Second Offers

Goals• Providing Just Compensation

– Chapter 32.05 requirement

• Consistency between similar properties– Highest and Best Use - Ag. Res. Com.

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Best Practices

• Encourage owners who do not accept WisDOT offer to get second appraisals. – More information is good.– Must consider appraisal and attempt to negotiate

after receiving owner’s appraisal. • Use other owner’s appraisals from similar

properties to help determine values.• Compensate owners without an owner’s

appraisal the same. 05/14/13

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Best PracticesAdministrative Revisions

• Stand alone document. Reader should understand adjustments without looking at appraisals.

• Reasonable and justifiable.• Ask - has “just compensation” been offered? • First column should always show the initial

approved appraisal offering price.

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ADMINISTRATIVE REVISION Wisconsin Department of Transportation DT1592 12/2012 Property Type Commercial

Property Net Size 8,379 Sq. Ft. / 0.192 Acres

Fee Acquired 0.121 acres

Other Interests 0.083 acres of Temporary Limited Easement (TLE)

Brief description of size, shape, effect of acquisition on property

COMPARISON OF DAMAGES

ITEM OFFERING PRICE OWNER APPRAISAL ADMINISTRATIVE REVISION

Appraiser Name Before Value $557,219.00 $1,070,000.00 $0.00 After Value $367,891.00 $760,000.00 $0.00 Appraiser Rounding $452.00 $1,580.00 Cost to Cure $40,000.00 Land $47,228.00 $310,000.00 $94,878.00 Other – Permitted Sign Sites & Sign Structures

$142,100.00 $142,100.00

Temporary Limited Easement (TLE) $1,220.00 $40,000.00 $6,442.00 TOTAL DAMAGES $191,000.00 $390,000.00 $245,000.00

Justification for administrative increase (Attach additional pages if necessary.) Land: The state appraiser allocates $17.92/sf and then depreciates the land value by 50% (8.96/sf) due to ATC easement over this property. This depreciation was not allocated on other properties already negotiated. For consistency, the administrative settlement is increase the land value at 100% at $18/sf. Adjustments are outlined below: 5,271 sf x $18/sf = $94,878 TLE: 3,615 sf x $18/sf x 6% x .75 years = $2,928 and 3,615 sf x $18/sf x 2% x 2.7 years = $3,514, totaling of $6,442.

Administrative Revision $245,000.00 Approved Offering Price $191,000.00 Variance Amount Percent Increase $54,000.00 28.27 %

Negotiator

Date

3/4/2013 James Kuehn Real Estate Management

Date

Project

County

Owner(s)

Parcel No.

SAM

PLE