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  • 1. Rick Etter Airport Acquisition Specialist FAA, Office of Airport Planning and Programming (202) 267-8773, rick.etter@faa.gov Airport Association of Airport Executives 9 th Annual Noise Mitigation Symposium October 5, 2009 Boca Raton, FL “ Other” Mitigation Measures Purchase / Sales Assurance FAA Guidance
  • 2. FAA Guidance – Other Mitigation Measures
    • Land Acquisition without a change in land use
    • AIP Handbook Paragraph 811b
      • Purchase Assurance
      • Sales Assurance
      • Transaction Assistance
    • FAA Requirements
    • AIP Allowable Costs / Example
  • 3. Real Property Acquisition for Noise Compatibility without Changing Land use – Typical Measures
    • Purchase Assurance . Airport purchases a participating home at the appraised FMV, typically sound insulates it and resells the home for residential use subject to the airport’s noise/avigation easement retained on the sale to a new owner.
    • Sales Assurance. A participating owner is assured the appraised fair market value of their home on a timely market sale, however the airport does not acquire the property. Home is appraised “as is” and the property is listed and sold by the owner subject to an noise easement conveyed to the airport at sale of the property. In effect the owner is assured no loss on the sale of the home subject to airport’s easement for noise compatibility.
    • Transaction Assistance. The airport agrees to pay certain costs associated with the sale of participating owner’s home. Typically, the airport pays the real estate commission on the owner’s sale. May also include some fixed expense incurred on sale and move from home. The property is listed and sold subject to the airport’s easement that is conveyed to the airport at the assisted sale of the property. May be combined with Purchase/Sales assurance measure.
  • 4. FAA Requirements
    • FMV Appraisal Requirements. The appraisal of the FMV of the property considers the existing noise impact, as indicated by the noise contour that the participating property is located. Comparable sales to value the property are selected from the same noise contour as the property appraised (or appropriate adjustment made for noise exposure of the subject property appraised).
    • On a sale an adequate easement for noise compatibility is conveyed/retained:
      • Provides for “right of overflight” with associated noise as mitigated under the airport’s NCP
      • Permanently encumbers the property of the current participating owner and subsequent owners (Easement must “Go with the Land”).
      • Reflects the approved NCP, but does not preclude other or future mitigation.
  • 5. FAA Requirements
    • Owners Sale is a Voluntary Transaction under the Uniform Relocation Act. In contrast to a “Buy-out project” where land is acquired for redevelopment to compatible land use, on purchase assurance or sales assistance the selling owner is “not displaced” and is not entitled to moving or replacement housing payments under 49 CFR 24 (Uniform Relocation Act).
    • Market Value Sale of Participating Property.
      • The time exposed on the market must adequate to solicit the appraised FMV.
      • List price should anticipate normal negotiations, say list 2% above appraised FMV, FHA premium, etc.
      • The listing must notify that the property is offered subject to the easement and at closing the property is purchased subject to the airport’s easement.
      • The airport must be able to explain the easement to buyers (e.g. contact person, pamphlets, other available information methods). Realtors need to understand the easement.
      • Reasonable cost to market the property at its appraised FMV are allowable offsets against sales proceeds (transaction assistance items, e.g. realtor fee, airport expense to maintain “curb appeal” and market at FMV).
  • 6.
    • Purchase Assurance:
    • Allowable for AIP = FMV of Participating Owners home
    • Plus Eligible Sound Insulation Costs
    • Less Net Sales Proceeds of Sound Insulated Home
    • Sales Assurance: Appraised FMV “As is” less Actual Sales Price subject to easement
    • Transaction Assistance: As noted may be combined/included in above measures in an airport’s approved NCP
    • Participating owner’s realtor fee on sale of home and other assistance cost under the NCP measure accepted by FAA (e.g. owner’s expense to market home, some fixed moving expense allowance, etc)
    Allowable cost for FAA Reimbursement
  • 7.
      • Allowable Purchase Assurance Expense:
      • Home Acquisition Cost: $ 80,000 (appraised FMV as is)
      • Eligible Sound Insulation Cost: $ 30,000
      • Total AIP Grant Eligible Cost: $110,000
      • Net Sales Proceeds:
      • Sales Price: $110,000 (insulated & subject to easement)
      • less Allowable Sales Expense: $10,000 (Realtor fee, VA repairs, other allowable non operating expense)
      • Net Sales Proceeds: $ 100,000
    Example
  • 8.
      • Allowable Sales Assurance Expense:
      • Appraised FMV As is: $ 80,000 (not subject to easement)
      • less Owners Sale Price $ 78,000 (45 days on market)
      • plus owner’s allowed expenses $ 6,000 (Realtor fee, FHA req’d repairs)
      • Net Paid to Owner : $ 8,000
      • Total AIP allowable: $ 8,000
      • Includes transaction assistance provided in the approved NCP
    Example
  • 9.
    • Where to Get More Information?
    • Questions / Guidance Needs?
    • AIP Handbook Chapter 8, FAA Order 5100.38
        • http://www.faa.gov/airports/aip/aip_handbook/
    • Contact Your FAA Project Manager http://www.faa.gov/airports/news_information/contact_info/regional/