The overall acquisition process consists of three major components: appraisals, negotiations and closings. Each of these components are explained in more detail below.

 

APPRAISAL

The appraisal component of the acquisition process consists of the steps necessary to determine the fair market value of a property being considered for acquisition. This value is then used to determine the approved value for the property. The approved value is provided to land acquisition negotiators for use as the basis for negotiations. While the steps of the appraisal process may overlap or even run concurrent, a summary of the steps associated with this process are as follows:

 

Appraisal mapping: An appropriate level of mapping is obtained which is then used to identify those physical characteristics and/or title issues that may impact the value of the subject property.

Appraisal contracting: A private sector fee appraiser is issued a task assignment, under their existing contract with the department, to perform an appraisal to determine the fair market value of the subject property.

A private sector fee appraiser is tasked to perform a formal review of the above appraisal. This includes determining if the appraisal is well supported and if the comparable sales are appropriate. Any issues in these, and other areas, are resolved among the appraiser, the reviewer and the Division of State Lands.
 

Determine approved value: Upon completion of the appraisal review, a final approved value is established to reflect the current market value of the property. This value is then used by the Bureau of Land Acquisition as the basis to establish a negotiation strategy which is utilized in the negotiation process by the acquisition agent.
 

NEGOTIATION

The negotiation component of the acquisition process consists of steps necessary to reach an agreement on price and terms that are mutually acceptable to the state and the property owner. A summary of the steps associated with this process is as follows:
 

Negotiation Strategy Development: The acquisition agent receives the approved appraisal(s) and reviews the appraisal data. A written negotiation strategy is developed based on the approved value of the property, comparable sales data, general market data, and any other information the department has regarding the property and the area. This strategy is reviewed by management and approved for negotiations.
 

Negotiations: Upon approval of the negotiation strategy, the agent proceeds with negotiations with the seller. Ultimately, if the negotiations are successful, the price and contractual terms and conditions are memorialized into a contract agreement which is executed by the parties.
 

Approval of Acquisition: The contract is submitted for approval as part of an agenda item to the Board of Trustees, or is reviewed and approved, or declined, under the Department’s delegation from the Board of Trustees. The Board of Trustees and staff reviews contracts, appraisals, and management needs and a decision is rendered.
 

CLOSING
 

The closing component of the acquisition process includes the steps necessary to close the transaction and acquire title to the subject property. A summary of the general steps with this process are as follows:
 

Due Diligence: Through the use of private contractors, title work, an environmental site evaluation and some level of boundary determination are obtained to aid in the identification of any issues which may impact the title, boundary, value, manageability, and long term ownership of the property.

Issue Resolution: Staff reviews the due diligence products. Issues identified, evaluated and resolved by the DSL staff and the seller. The potential impacts of any remaining issues which the seller is not required to cure are evaluated by staff and a decision is made regarding how best to expeditiously proceed while protecting the Board of Trustees interests.

Closing: This phase of the closing process consists of execution of all legal documents between the parties and the delivery of monies necessary to consummate the terms and conditions of the contract. Title is transferred to the Board of Trustees and the property is then leased to the appropriate managing entity.
 

The Department and the Division are working to further reduce land acquisition processing times. It continues to be our guiding principles, however, that by applying sound real estate and business principles and practices we do not sacrifice the integrity or quality of the real estate transactions processed for the Board of Trustees.

 

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