A German Steel Manufacturer Wanted to Build in Alabama Power's Service Area, which would make it one of the utility's largest customers. However, to make the deal, Alabama Power Co. (Birmingham, Alabama, U.S.) would have to acquire the land and land rights in six months. The project would span 16 miles (26 km) and 400 acres, and involve three switching stations, two substations, 60 property owners, two railroad crossings and 180 days.
These were only but a few of the challenges presented to Alabama Power's Corporate Real Estate department when ThyssenKrupp (TK) selected the state of Alabama as the location for its newest steel mill, its first such plant in the United States. To meet the aggressive schedule requested by TK, the utility's Corporate Real Estate department committed to acquiring all the necessary rights to serve this customer in only six short months.
Once on-line, TK Steel would become one of the largest customers for Alabama Power, as well as for its parent company Southern Company. This project was vital to the economic development of the city of Mobile, the state of Alabama and the entire Southeast region.
The initial feasibility studies Alabama Power's Transmission Engineering department conducted revealed that two 230-kV transmission lines were needed to provide adequate power to the TK site. These two transmission lines would feed a six-breaker ring bus system, located on the plant site. From this ring bus, five 230-kV lines would provide power to TK's load-intensive electric arc furnaces. In the design, three 230-kV lines would source the electric arc furnace used in the manufacturing of stainless steel, while two 230-kV lines would source the arc furnace used to manufacture carbon steel. Additional power for the plant would come from two customer substations located on TK property, which would be acquired through easement.
The process of purchasing two sites suitable for switching stations began immediately. Once the location of each site was determined, Alabama Power entered into negotiations with the property owners. Within only 15 days, Alabama Power executed an option for each site. The first site, Bucks, is located within the corridor of an existing 115-kV and 230-kV transmission line. Once the site had been surveyed, the environmental assessment began.
During the assessment, gopher tortoises were discovered. These tortoises, which are protected by federal law in the Alabama counties west of the Mobile and Tombigbee rivers, are prone to inhabit undeveloped land with longleaf pines and sandy soils. The Bucks site was a prime habitat for the tortoises. The greatest threat to these tortoises is the destruction of their habitat. Fortunately, Alabama Power's Environmental department determined that the gopher tortoise habitats could be worked around as long as extreme caution was used. Each burrow was carefully marked by flagging, and the machinery used in the clearing process was maneuvered around the areas of concern.
A second environmental issue came about when wetlands were discovered on-site. A special team within the Environmental department was called upon whose specialty is identifying and mitigating wetlands. Each wetland was flagged at its beginning and ending, and global positioning system (GPS) points were noted. Using the GPS information, each wetland area was added to Alabama Power's surveyed construction drawings, ensuring that special care would be taken in those areas. Alabama Power determined that it could work around these wetland areas to avoid disturbing the natural environment, and no mitigation would be needed.
The additional time it required to locate, flag and enter the GPS points of the gopher tortoise burrows and wetlands proved to be another brief slowdown in the closing process. However, being a leader in the environmental community, Alabama Power felt it was an easy decision to make. As a result of the teamwork and dedication of numerous employees and departments, these environmental issues were minimized and the property was able to be closed in under two months.
Calvert, the second site, is located underneath an existing 230-kV transmission line. While this site did not present major environmental concerns, it did have issues of its own. This site was part of a much-larger tract of land that had been passed down in a family from generation to generation. Records traced it all the way back to the original governmental patent from when the land grant was issued in 1859. The Alabama Power Corporate Real Estate team was faced with the issue of emotional attachment, as this family had never sold any portion of its land to date.
After extensive negotiations, Alabama Power and the family came to an agreement. Unfortunately, this was not the end of the challenges the team faced while attempting to close the property, which was titled into eight undivided interests. The family members holding the interest in the property lived in several different areas of the United States. With an agreement in hand, the team began the process of mailing documents to and from Alabama Power, while pressing to stay within the limits of the compressed time line. Although it took the Corporate Real Estate team longer to close on the property, the team was able to keep everything on schedule.
THE CORPORATE REAL ESTATE TEAM
When met with the challenges of how to survey and acquire the land rights needed to serve TK, Alabama Power employees knew that this job could only be accomplished through teamwork. A line-route projection was done and revealed that approximately 10 miles (16 km) of new transmission right-of-way would be necessary to reach the TK property, and then an additional 6 miles (10 km) of right-of-way would be needed once on the property.
Upon hearing the official announcement that Alabama had been selected as the site for the new steel mill, Alabama Power's Corporate Real Estate department went to work. Along with the switching stations, presurvey contact was made with approximately 70 property owners along the projected route within the first 24 hours of having the TK contract. In an effort to expedite turnaround time on surveying maps, the manager of the Transmission Projection and Survey department suggested that the route be broken into sections and an aerial survey be done.
The aerial survey was used to locate section corners, property corners and any important landmarks. With this information, property lines along the projected route were mapped. These maps, with the property lines for each customer, were used to write permits to acquire the rights necessary to build the new transmission line. This process was repeated until each section of line had been surveyed and all of the permits had been written.
As the initial Alabama Power team became fully engaged in the acquisition process, additional manpower was brought in from other areas of the state to aid in the completion of this project due to its compressed time line. The new acquisition team included four utility employees and two contractors.
While a flurry of activities centered on this massive project, there were still day-to-day operations to consider in the Mobile area, so additional contract staff was brought in. Because surrounding areas had staff dedicated to this project, they were forced to continue operating with reduced resources.
With all resources in place, the team was almost ready to begin negotiations. Before actual negotiations could begin, a market analysis had to be completed. Due to the large industrial customer coming to the small rural area, as well as the prediction of an increase in gross population, the real estate market became volatile overnight, thus making it difficult to pinpoint the fair-market value.
A contract company was hired to evaluate the market and compile an unbiased market analysis. After close examination of the analysis by Alabama Power's chief appraiser, a range of values were calculated for various types of property.
As the team began to purchase the transmission right-of-way, they encountered various issues that had to be overcome as efficiently and quickly as possible. While some property owners had died intestate, leaving no will or record of who currently owned the property, others failed to pay taxes, thus creating a question of current ownership. Therefore, some members of the team did extensive title research to ensure that each easement was executed by the appropriate party. Simultaneously, the primary negotiating teams worked feverishly to acquire other parcels.
Another challenge the team faced was ensuring that each property owner was paid based on the highest and best use of the property. Although the chief appraiser provided the team with guidelines, properties often fell into more than one category. Some properties were small residential lots, others were large timberland tracts. Some had great major highway access, others had little to no access.
With diligent research and careful consideration given to each parcel, the negotiation team applied a per-acre value, always allowing the balance of favor to fall to the property owner. As each parcel was acquired, the team returned the executed permits to the project leader, who logged the parcel as acquired. The project leader also kept a running total of dollars spent and price paid per acre to make certain that the project came in within budget.
Due in part to the persistence and dedication of the negotiating teams, who put in numerous hours over and above the expectations of the company, the project was completed with a 99.95% success rate, leaving only three parcels to be acquired through the eminent domain process.
As Alabama Power's Corporate Real Estate department evaluates the resolutions to various problems and the methods it used, the department clearly sees the positives and negatives in its role in this sometimes-overwhelming project. Positively, despite the hurdles, the team managed to bring this project in ahead of schedule and under budget.
However, the team also learned that not all costs are measured monetarily. Each team member's family felt the weight of this project as their loved ones worked many long nights and numerous weekends to ensure the Corporate Real Estate department's success in the project. At the end of the day, the Corporate Real Estate department won the race against time and acquired approximately 400 acres of right-of-way stretching over 16 miles while doing it.
Amanda Edge is employed by Alabama Power Co. as a real estate specialist. Her current responsibilities include the acquisition of distribution and transmission line easements. She also has purchased numerous fee sites for Alabama Power. Edge began her career at Volkert and Associates, where she worked as a contract right-of-way agent for Mobile County and Alabama Power. An active member of the International Right of Way Association, Edge is currently serving as Chapter 24's education chair. She earned her bachelor's degree from the University of Alabama at Birmingham in 2003. firstname.lastname@example.org
Mark Chandler is chief technical specialist and land acquisition coordinator for Alabama Power Co.'s Corporate Real Estate department. His responsibilities include the coordination of land acquisition projects as well as all budgeting, scheduling and estimating activities within that department. Chandler began his employment with Alabama Power in 1987 in the Birmingham division and has progressed through various positions within the company, including distribution specialist, tansmission line designer, power delivery specialist and, most recently, real estate specialist. email@example.com
This article is based on the Industry Excellence Award-winning paper, presented at the 2008 Southeastern Electric Exchange meeting.