Commercial property could be eligible under change to highway loan fund rules

Posted In: Transportation
Date: 8/12/2016
The Metropolitan Council has amended eligibility requirements for the Right-of-Way Acquisition Loan Fund (RALF).  

The RALF program allows the Council to make loans to cities to purchase needed highway right-of-way, helping to secure land that might otherwise be lost to development. Land is acquired only from willing sellers.
 
Before the recent change in requirements, the Council’s eligibility policy allowed the purchase of only homestead property in cases of homeowner hardship, in other words, the property owner is unable to sell the property due to its designation as being part of a future highway project. The adopted change provides for exceptions to the eligibility requirements to also allow the purchase of commercial property in hardship cases.
 
The program was established in state law in 1982. The Council suspended the program in 2010 to assess its financial effectiveness, ensure loans were consistent with regional transportation policy, and consider any needed changes. 
 
The Council reinstated the program in 2014 with stricter eligibility requirements. Since then, however, the Council has not made any loans. With a current RALF fund balance of $14.3 million, Council staff believe the “exception” clause will prompt some cities to apply and be eligible for the loans.
 
“As the highway system has become more built out, we’re finding fewer new alignments in need of the loans,” said Amy Vennewitz, deputy director of Metropolitan Transportation Services. “This change gives more flexibility with respect to certain parcels that are still needed for future highway projects, but didn’t meet the existing criteria.”

More information
More about the RALF program.





 

Posted In: Transportation

Tags: RALF, loan, right of way

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