Title: Managing and Controlling the Land Acquisition Process

Phase(s): Preliminary Engineering

Category: Management and Schedule

Date: December 2006

1. Background

A grantee, or its sub-recipient agency responsible for execution of a fixed guideway project, should control as much of the land acquisition process as allowed by State Law.  The City of Phoenix is the grantee for the Central Phoenix/East Valley (CP/EV) Light Rail Transit (LRT) Project, and Valley Metro Rail (METRO) is the sub-recipient responsible for execution of the Project.  METRO was established to construct the CP/EV LRT Project and other rail projects in the region.  The CP/EV project includes the design and construction of a 19.6 mile, double track, light rail system that extends from 19th Avenue near Bethany Home Road in north Central Phoenix through the downtown area to and through the City of Tempe, then crossing into the City of Mesa where the project terminates at Main Street and Sycamore.  The track alignment is mostly in-street median.  It includes 27 passenger stations and eight surface parking lots, seven of which are to be newly constructed, and one existing lot owned by the City of Tempe near a LRT station site that will be dedicated to transit use at no cost to the Project.  An initial fleet of 36 Light Rail Vehicles (LRVs) is part of the Project.  The Project also includes a maintenance and storage facility to support the 36 light rail vehicles located south of the Washington Street main line and east of 48th Street in Phoenix.  Propulsion power for the LRVs will be delivered by a Traction Electrification System (TES) consisting of wayside substations distributing propulsion power through an Overhead Catenary System (OCS).  The Project will also include a Signals and Communications System consisting of both wayside and traffic signals.  In order to accomplish the construction of this light rail system, 784 parcels of land must be acquired by and within the three participating cities.  45 are located in the City of Mesa, 119 in City of Tempe and 620 in City of Phoenix.  It is the cities’ responsibility to obtain, by condemnation if necessary, the entire required ROW. METRO employed a Real Estate Manager and Coordinator, who have the responsibility to coordinate real estate and engineering activities between the cities, Federal Transit Administration (FTA), and METRO engineering staff and consultants

Under public and political pressure to complete the Light Rail system by December 2008, METRO made a calculated business decision to proceed with construction without having acquired all the real estate necessary for the alignment and supporting facilities.  In an effort to coordinate real estate acquisitions with construction and utility relocation schedules, METRO, in coordination with the cities, developed a Real Estate Acquisition Plan and parcel status tracking system to effectively manage the acquiring of these numerous parcels.  This plan was integrated with construction and utility relocation schedules so as to indicate parcels having the highest priority needs for contractors.  Contract provisions allowed METRO to cause contractors to perform work-arounds when the original construction plan could not be implemented due to lack of needed parcels, but use of this device inevitably creates additional cost and schedule risks to the project.

The acquisition process involves engineers located at the METRO offices who prepare legal descriptions of the property required based on ROW drawings.  These descriptions are forwarded to the cities.  Based on these descriptions, title companies perform title searches for each required parcel.  Upon completion of this work, title reports for each parcel are transmitted to the cities.  City staffs are responsible for obtaining appraisals, making offers, negotiating settlements and making the land ready for construction.  The cities also file for condemnation when offers are refused or negotiations with property owners fail.  Cities’ staffs and their contractors performing this work are not housed with METRO staff or their consultants.  Cities’ staffs also have other projects for which they are required to perform real estate acquisitions.  The absence of project-dedicated city staffs or their collocation with METRO staff and engineers has caused considerable time delay created by a cumbersome process of communication and coordination.

2. The Lesson

The critical path schedule for a light rail project tends to travel through land acquisition, utility relocations, civil construction, traction electrification, signal systems, and testing and start up.  Timely acquisition of ROW becomes a major factor in meeting the scheduled Revenue Operations Date and reducing the risk of costly delays to contractors.  The highest risk to the schedule of any complex project is associated with those functions that are not wholly within the control of the agency responsible for its successful completion.  Therefore, the ROW program would be more likely to be successful in terms of its total integration with the scheduling of other project activities when full responsibility and commensurate authority for acquisition is vested in the project implementing agency. When local policy dictates that the transit agency must yield the real estate acquisition function to another agency, the process could proceed more efficiently with that agency’s dedicated consultants and staffs collocated with transit agency’s staff and design consultants.  Grantees should pursue procedures and processes that allow for timely ROW acquisitions.  These procedures should include the freezing of design at a time that will minimize the necessity for revised legal descriptions and consequent reappraisals of real property.  Critical parcels need to be identified and acquired in a timely manner to ensure that construction contractors are not delayed.  Additionally, with the collocation of City and transit agency ROW staffs, and designers, there could be considerable time savings by commencing condemnation actions in parallel with negotiations when it appears that the latter are failing.  In any event, the acquisition process should commence early enough to insure that ROW will not delay utility relocation or construction contractors.  To avoid all risks of construction delays associated with acquiring ROW, contract awards could be deferred until all ROW is acquired, however, this is time-consuming and could result in escalation of construction costs as well as delaying service to the public.  In either case, control by owner or outside agency, FTA and its Project Management Oversight Contractor (PMOC) should undertake an in-depth review of acquisition procedures and their implementation early in the acquisition process to assure their adequacy, and compliance with all applicable regulations.

When fast-tracking or accelerated project activity is undertaken, critical elements of the overall process cannot be left unattended.  The right-of-way presence on the PMO contract is essential in assuring compliance with Federal laws and regulations.  The right-of-way presence is particularly critical when you are fast-tracking on projects with large numbers of parcels and complex takings.

In order to fast-track the Project to a December 2008 completion, a conscious business decision was made by METRO to commence  awarding major construction contracts without having acquired all the necessary ROW for each contract.  Although METRO has been meeting the critical path schedule without total control of the real estate acquisition function, streamlining the process through collocation of all participants would have enhanced communications and improved coordination of the many activities required to have critical parcels available for construction at the scheduled time of need and perhaps minimized the extensive and costly use of contractor work-arounds.  Prioritizing parcel needs for construction is solely a METRO responsibility, but collocation of all acquisition process participants would result in more of a collaborative effort between dedicated city and transit agency staffs.  Staff resources would be allocated to perform the necessary land acquisition activities on the highest priority parcels.

3. Applicability

This Lesson Learned is applicable to all grantees and sub-recipients that have divided responsibilities for the real estate acquisition process where land acquisition is prerequisite to construction.

4. References

N/A