welcome to the international right of way association’s course 502 business relocation

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Welcome to the International Right of Way

Association’s

Course 502Non-Residential

Relocation Assistance

502.PPT.R4.2014.09.02.0.0

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Introductions

Who we are…What we do…

Where we do it…

How long we’ve been doing it…

Our goals for the course...

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Objectives At the conclusion of the course,

you will be able to...

• Discuss the concepts and terminology associated with

nonresidential displacements

• Apply the Uniform Act regulations to nonresidential

displacement examples

• Recognize the limitations and flexibility

of federal regulations

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Housekeeping

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Schedule (1)

8:00 - 8:30 Introductions, Etc.

8:30 - 9:15 Relocation Eligibility

9:15 - 10:00 Relocation Planning

10:15 - 10:45 Personal Property Identification

10:45 - 11:45 Advisory Assistance

12:45 - 2:50 Case Study No. 1

3:05 - 4:35 Moving Options and Payments

4:35 - 4:50 Recap Day One

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Schedule (2)

8:00 - 8:15 Recap Day One/Introduce Day Two

8:15 - 9:30 Payments Related to PersonalProperty Not Moved

9:30 - 10:00 Obtaining Move Bids

10:15 - 11:00 Reestablishment Payments

11:00 - 11:45 Fixed Payments for Moving Expense

12:45 - 1:15 Non Profit Organizations

1:15 - 1:45 Farm Operations

2:00 - 3:15 Case Study No. 2

3:15 - 3:30 Claim Documentation

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Schedule (3)

3:30 - 3:45 Appeal Process

3:45 - 4:00 Summary and Review

4:00 - 5:00 Exam

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ConstitutionStatutes

United States CodeRegulations

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Objectives of the URA

• Fair, equitable and consistent treatment

• Will not suffer disproportionate injuries or hardships

• Efficient and cost effective implementation

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Who is a displaced person?

Any person who moves from real propertyor moves personal property from real property as a result of…

• Written notice of acquisition

• Rehabilitation or demolition

• Written notice of acquisition, rehabilitation or demolition of other real property

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Who is not a displaced person? (1)

A person who…

• Moves before the initiation of negotiations

• Occupies after the acquisition

• Occupies solely to obtain assistance

• Is not required to move permanently

• Is not displaced as a result of a partial acquisition

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Who is not a displaced person? (2)

A person who…

• Receives notice that he/shewill not be displaced

• Voluntarily conveys (no eminent domain action)

• Is in unlawful occupancy

• Is unlawfully in the United States

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Benefits

Fixed Payment for nonresidential moves

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Relocation Study

A relocation study recognizes the

problems associated with the

displacement

of individuals, families, businesses,

farms

and nonprofit organizations and

develops

solutions to minimize the adverse

impacts

of the displacements.

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Relocation Interviews• Get information about the business

• Identify potential problems early

• Eliminate agency misconceptions about the business

• Determine the needs of the business

• Provide current project information

• Establish rapport

• Identify and resolve personal property issues

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Ascertaining Needs

• Build rapport• Written format• Walk the property• Funnel technique

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Definitions (1)

Real estate is the physical landand appurtenances to the land.

Real property is all the rights,interests and benefits inherent in the ownership of the real estate.It is the bundle of rights.

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Definitions (2)

Personal property are items thatare not affixed to the real estate.

Fixtures are items that were oncepersonal property but have sincebeen permanently attached to thereal estate.

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Definitions (3)

Fixture Tests: Manner affixedIntent

Adaptation

Trade fixtures are not part of the real estate.

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Advisory Assistance (1)

• It’s the law• Might prevent lawsuits• Prevent loss of goodwill• Establish confidence• Avoid “bad press”• Keep the business in business

• Everyone gains

• Cost effective

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Advisory Assistance (2)

• Explain program, benefits, options• Personal Interview• Determine relocation needs

– Need for outside specialists– Need for advanced payments– Time needed

• Referrals to suitable replacement sites• Information on other programs• Written information

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Relocation Notices• General information notice

• Notice of relocation eligibility

• Ninety-day notice

• Notice of intent to acquire

• Notice of move

• Notice of denial of claim

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Moving Options

Either or a combination of…

• Commercial move

• Self-move

– Based on lower of 2 bids (undocumented)

– Actual cost (documented)

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Eligible Expenses (1)

• Transportation

• Packing, crating, unpacking, uncrating

• Disconnecting, dismantling, removing...

• Modifications

• Storage not to exceed 12 months

• Insurance

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Eligible Expenses (2)

• Replacement...

• Licenses, permits, fees

• Professional services

• Relettering and replacing

• Site Searching up to $2,500

• Other moving related expenses

• Personal property only

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Ineligible Expenses (1)

• Cost to move real property

• Loan interest...

• Loss of goodwill

• Loss of profits

• Loss of trained employees

• Additional operating expenses

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Ineligible Expenses (2)

• Personal injury

• Legal fees...

• Physical changes...

• Storage costs...• Refundable security

and utility deposits

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Related Nonresidential Eligible Expenses

• Connection to utilities…

• Professional Services…

• Impact Fees

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Day One Recap

Specifically, we started to...

Discuss the concepts and terminology associated with nonresidential displacements

• Apply the Uniform Act regulations to nonresidential displacement examples

• Recognize the limitations and flexibility of federal regulations.

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Pop Quiz No. 1 (1)

1. Does the business have to replace the old stationery to receive compensation?

2. May the business retain old stationery or other items being replaced?

3. Can the agency be creative in the replacement of old items?

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Pop Quiz No. 1 (2)

4. Can the agency replace items that are not at the project location?

5. Other comments?

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Day Two

Specifically, we will continue to...

• Discuss the concepts and terminologyassociated with nonresidential displacements

• Apply the Uniform Act regulationsto nonresidential displacement examples

• Recognize the limitations andflexibility of federal regulations.

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Tangible Personal Property Loss

The payment is the lesser of the:

Fair market value in place of the item,as is, less the proceeds from its sale

or

Estimated cost of moving the item

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Calculation1. Move estimate: $10,000

2. Value for continued use, in place: $30,000

3. Sales proceeds: $ 6,000

4. Value not recovered from the sale: $24,000

* plus the cost to conduct the sale

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Substitute Personal Property

The payment is the lesser of the:

Cost of the substitute item less the

proceeds from sale of old item

or

Estimated cost of moving, reinstalling and

making item code compliant

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Calculation1. Move estimate: $25,000

2. Cost of substitute item

(including installation): $50,000

3. Trade in or sale proceeds: $10,000

4. Net cost of substitution: $40,000

* plus the cost to conduct the sale

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Exercise No. 3 (1)

1. Move estimate:$25,000

2. FMV in place as is: $52,000

3. Sales proceeds:$20,000

4. Value not recovered from the sale: $32,000

5. Payment is lesser of 1. or 4.: $25,000

6. Cost to conduct sale: $ 0

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Exercise No. 3 (2)

1. Move estimate: $40,000

2. Cost of substitute item (including

installation): $33,500

3. Proceeds from trade in or sale: $ 500

4. Net cost of substitution item: $33,000

5. Payment is lesser of 1. or 4.: $33,000

6. Cost to conduct sale: $ 0

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Exercise No. 3 (3)

1. Move estimate: $ 300

2. FMV in place, as is: $ 260

3. Sales proceeds: $ 100

4. Value not recovered from the sale: $ 160

5. Payment is lesser of 1. or 4.: $ 160

6. Cost to conduct sale: $ 50

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Low Value/High Bulk

Applies when, in the agency’s judgment,

the cost to move the personal property

is disproportionate to its value.

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Calculation

1. Move estimate: $1,500

2. Amount it would sell for

at the site: $300

3. Comparable amount delivered to replacement site: $200

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Exercise No. 4

1. Move estimate: $50,000

2. Amount it would sell for

at the site:$25,000

3. Comparable amount delivered to replacement site: $24,000

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Move Specifications

• General specifications

• Other provisions

• Special needs

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Obtaining Bids

• Select the bidders

• Provide Move Specs and inventory

• Walk through

• Get cost estimates/bids

• Review the estimates/bids

• Approve the successful bidder

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Criteria for Reestablishment Payment

• Small business (not more than 500 people on site)

• Up to $25,000

• In addition to actual moving cost

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Pop Quiz No. 2

1. Is a business operation that consists

of leasing real estate to others at the

displacement site eligible for the

reestablishment payment?

2. Is a sandwich lease situation eligible

for the reestablishment payment?

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Eligible Expenses

• Repairs or improvements required by code

• Modifications to replacement site

• Exterior signage

• Redecoration or replacement

• Advertisement

• Increased operation costs during first 2 years…

• Other

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Ineligible Expenses

• Purchase of capital assets

• Purchase of materials, supplies, inventory

• Interest on borrowed money...

• Payment to in home business that does not...

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Pop Quiz No. 31. The displaced business is a tire shop

that also performs all types of

automotive repair work. The business

owner owns six other shops under the

same name that only sell and install

tires. Would the business be eligible

for a fixed payment?

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Fixed Payment “in lieu of”

• Minimum: $1,000

• Maximum: $40,000

• Based on the last two years taxable income

• In lieu of payment means in lieu of ALLother payments

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Calculation (1)

Total Year 1 Year 2

Net income or loss: $20,000 $40,000

Compensation paid

to owner’s family: N/A N/A

Net earnings: $20,000 $40,000

The total net earnings for both years is dividedby two to obtain the average ( _______ )Amount of payment: $______

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Calculation (2)

Total Year 1 Year 2

Net income or loss: $ - 5,000 $40,000

Compensation paid

to owner’s family: N/A N/A

Net earnings: $ - 5,000 $40,000

The total net earnings for both years is divided

by two to obtain the average (______)

Amount of payment: $______

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Calculation (3)

Total Year 1 Year 2

Net income or loss: $10,000 $20,000

Compensation paid

to owner’s family: $40,000 $50,000

Net earnings: $50,000 $70,000

The total net earnings for both years is divided

by two to obtain the average (______)

Amount of payment: $______

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Calculation (4)

Total Year 1 Year 2

Net income or loss: $ 1,000 $ 0

Compensation paidto owner’s family: $ 0 $ 0

Net earnings: $______ $ 0

(The total net earnings for both years is divided

by two to obtain the average (______)

Amount of payment: $______

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Determining Number of Businesses

• Different legal entities

• Shared premises/equipment

• Substantially identical/ interrelated operations

• Held out to the public as “one”

• Same person manages or controls

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Nonprofit Organizations

An organization with an

exempt status with the

federal and state income

tax offices and able to

provide proof of its

non profit status. A

simple claim of non

profit status is not

sufficient.

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Farm Operations

• Eligibility requirements

• Actual movingexpense payments

• Reestablishment

• Fixed payments in lieu of actual moving expenses

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Appeals Any aggrieved person may file a written

appeal with the agency in any case in

which the person believes that the agency

has failed to properly consider the

person's application for assistance. The

assistance may include, but is not limited

to, the person's eligibility for, or the

amount of, a required payment.

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Objectives At this point, you are able to...

Discuss the concepts and terminology associated with nonresidential displacements

Apply the Uniform Act regulations to

nonresidential displacement examples

Recognize the limitations and flexibility of federal regulations

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Thank you!