TO THE ATTENTION OF DIVISION ADMINISTRATORS AND DIVISION REALTY STAFF:

 In response to the request of some States, the Federal Highway Administration (FHWA) has decided to approve short-term fair market value (FMV) exceptions on a case-by-case basis for the temporary use of sidewalks and parking areas in highway right-of-way (ROW) for additional restaurant seating and/or retail space.

The extraordinary and unprecedented nature of the coronavirus disease (COVID-19) public health emergency and subsequent efforts to reopen local economies safely is significant enough to warrant this time-limited FMV exception.  However, FMV exceptions will only be granted when the State has implemented safety measures that protect individuals in the ROW as well as drivers, and the use does not impede the safe and free flow of traffic.  The exceptions will only be granted for the limited purpose of safely reopening the economy and for an initial period of 120 days with the concurrences of both the Division Office and the Office of Real Estate Services, and subject to review by the Office of Chief Counsel. 

Background Information

The question at hand is related to whether the proposed use of the ROW falls within an exception to the requirement that FMV be charged for the use of the ROW, a decision that FHWA is solely authorized to make.

Non-Interstate ROW use approval is typically covered in the Stewardship and Oversight (S&O) Agreements.  If authority is delegated to the States under these agreements, then the use may be approved once the State determines the proposed use is in the public interest and would not impair the highway or interfere with the free and safe flow of individuals in the ROW and traffic thereon. 

As a result of the Federal approvals outlined above (both ROW Use and exceptions to FMV), the use would be a Federal action subject to the National Environmental Policy Act (NEPA). 

The following talking points are provided for your use in discussion with your State partners:

  • Many States are proposing to use sidewalks and parking areas in highway ROW temporarily for additional restaurant seating and/or retail space as part of their business reopening efforts.
  • The additional space is needed for States to reopen safely while adhering to social distancing guidelines.
  • States must charge, at a minimum, FMV for the sale, use, lease, or lease renewal of real property acquired with Federal assistance unless an exception is granted under 23 U.S.C 156(b).
  • The decision to waive FMV for the use of the ROW is always retained by FHWA.
  • This proposed FMV exception is within FHWA’s discretion and is authorized under 23 U.S.C. 156(b), which allows exemptions for a “social, environmental, or economic purpose.”
  • The FHWA will only grant time-limited FMV exceptions in this instance, provided that the State has implemented safety measures that protect individuals in the ROW as well as drivers, and the use does not impede the safe and free flow of traffic.
  • The temporary FMV exception will only be approved for the limited purpose of business reopening and economic recovery in the States.
  • The FMV exception shall not exceed a period of 120 days.  At the end of 120 days, the FHWA will reevaluate the temporary exception to the FMV requirement.
  • Granting the FMV exception for this purpose during these extraordinary and unprecedented circumstances is in accordance with Executive Order (EO) 13924, “Regulatory Relief to Support Economic Recovery,” which encourages Federal agencies to promote economic recovery through non-regulatory actions, and these exceptions align with the principles contained in the EO.
  • EO 13924 directs agencies to use any emergency authorities that have been invoked in response to the COVID-19 outbreak or are otherwise available to them to support the economic response to the COVID-19 outbreak.
  • The extraordinary and unprecedented nature of the COVID-19 public health emergency, as well as the subsequent efforts to safely reopen local economies, is significant enough to warrant the FHWA granting the time-limited FMV exception.

 

If you have any questions, please contact Mary Ridgeway at mary.ridgeway@dot.gov or 202-366-2058.