Road builder wants to rent a yard

[Mortenson]

My family owns a piece of farmland near a town. A somewhat high traffic volume road will be changed from 2 lane to 3 lane. We own a yard on the road that the construction company wants to rent for the duration. Originally, I assumed they wanted to park vehicles and equipment there. Now I've heard they want it also to make a mountain of ground road material. We aren't happy about messing up the yard, but will listen to the pitch tomorrow.

Does anyone here have any advice? I think some of you are engineers and builders. This company will make a small fortune on this project. What's the going rental rate? I feel like anything less than 10K is laughable. We need strong provisions written to any potential contract, such as access to a shed, driveway, part of the yard for a potential wet harvest. Can the yard ever be made back to normal again? Do I need a new insurance policy protecting against a construction accident? What else should I not be missing??

Thanks everyone. I honestly feel there's a bunch of geniuses on this site. Lotta real world experience and I have much respect for all the wisdom shared daily.

 

[Bill]

I’d take no less than the current market value of the lot plus 50%.

But I’m a prick

 

[Howboutthemdawgs]

My family owns a piece of farmland near a town. A somewhat high traffic volume road will be changed from 2 lane to 3 lane. We own a yard on the road that the construction company wants to rent for the duration. Originally, I assumed they wanted to park vehicles and equipment there. Now I've heard they want it also to make a mountain of ground road material. We aren't happy about messing up the yard, but will listen to the pitch tomorrow.

Does anyone here have any advice? I think some of you are engineers and builders. This company will make a small fortune on this project. What's the going rental rate? I feel like anything less than 10K is laughable. We need strong provisions written to any potential contract, such as access to a shed, driveway, part of the yard for a potential wet harvest. Can the yard ever be made back to normal again? Do I need a new insurance policy protecting against a construction accident? What else should I not be missing??

Thanks everyone. I honestly feel there's a bunch of geniuses on this site. Lotta real world experience and I have much respect for all the wisdom shared daily.

I’m not one of the geniuses, so now that that’s out of the way…what leverage do you have on them and/or the project? Is your yard (are calling a vacant lot a yard just I’m on the same page?) a dime a dozen in the vicinity or a unicorn? Obviously if you have their nuts in a vise, squeeze. Road construction companies are extremely profitable. I have a buddy who I grew up with through college who has taken over their family business back where I’m from and they just bought a jet last year for perspective. Government contracts are lucrative…shocking I know everyone assumes the government is great with spending our money.
Have another good friend who was married to a real b%^^h. She was a divorce attorney. She told me one time the person with the upper hand in any negotiation is the person with the least to lose. If you need the money and don’t care for the longevity of the yard, get what you can. If your life isnt affected if they call your bluff, shoot high. Unfortunately I don’t know a dollar figure but 10,000 would be closer to a month not the life of the project!

 

[buckdeer1]

I would say that price is low,There is a triangle between hiway and county road here and that guy bought it just for when the state hiway gets re done every 20 years.I would start way high and go from there.I would start at 3 times the value and put a deadline on the lease so they can't use past the deadline for that project.If you want them to put back to farmable condition make sure they break up compaction.Also if you need any pavement laid anywhere thats a good thing to work in deal

 

[Mortenson]

Good responses so far. More info: not sure if it's a unicorn "lot" or not. It's their 1st choice for sure. It's my great uncle's old farmyard where he lived and where any one of us could live in the future. It's a nice yard that I've mowed since '93. We have nothing to lose. Sold a long, thin strip for the road expansion for 50/ac. Asked for more but they countered with the "it'll make your land more valuable."

 

[T-Max]

I would also consider some of their millings if you can write that in. I think asphalt millings can make a great driveway. Maybe put provisions that they return the yard to its pre-use condition upon completion. I think the scope of the job makes a difference too. If it’s a $1m job, $100k is a lot. If it’s a $10m job, $100k is less of a burden and so on. See if you can get a feel for that.


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[b116757]

Also if they are bring in heavy equipment consider having them build you a pond on the property or other major dirt work to partially cover payment often they will work with you on something like that because they have the big equipment there anyway and that cost is much lower to them than a cash payment.one of my farms has a pond built by the highway construction company when they made it 4 lane.

 

[Turkey Creek]

Good responses so far. More info: not sure if it's a unicorn "lot" or not. It's their 1st choice for sure. It's my great uncle's old farmyard where he lived and where any one of us could live in the future. It's a nice yard that I've mowed since '93. We have nothing to lose. Sold a long, thin strip for the road expansion for 50/ac. Asked for more but they countered with the "it'll make your land more valuable."

Which also equates to it will raise your property taxes.

 

[FarmerDan]

I have no idea about pricing but I am good with assumptions! I would start by assuming the "yard" will be nearly worthless at the end of the project...without some remediation. Then the question becomes what remediation will be necessary, who defines such things, and how and who determines success of the agreed-to remediation.

 

[West_Fork]

I would require a bond for restoring the property to original condition. Maybe something like $50k an acre, plus rent which would help fund additional insurance.

Take many pictures. Measure baseline soil compaction. Note weed presence, existing hazmat issues, etc.
Then consider what you can get them to do while they are there with their equipment. Need a new road? Material?

 

[jsasker007]

See what they offer. They piss away a hell of a lot of money on everything they do so what seems ungodly high to us will still be a bargain for them. On the other hand you don't want to price yourself out of the game either.

 

[Mortenson]

Just got off the phone with the attorney. Meeting got cancelled and won't be rescheduled, lol. Wonder if there's a habitat guy at the company who saw this thread. No pond for me, shucks. Can't say I'm too sad. Thanks again for the replies.

 

[Ben.MN/WI]

I would probably let them rent the land for the value of the land, so if they are renting an acre, I would charge them the $10k value (or whatever it is worth) of the acre under the assumption that they would screw something up and make the land worth less than it was before.

There is a chance they would screw something up or irritate you in general, so you would have to decide if $10k (or whatever number they pick) is worth the aggravation.

 

[jsasker007]

A few years back I had a garbage disposal company "rent" a large portion of my businesses land to store all of their dumpsters while they were relocating. They stored them at my business for the winter and wound up being a huge pain in the ass trying to plow around all of that. Then they came and picked up all of the dumpsters and ran off without paying me a nickel. NO GOOD DEED.

 

[Wind Gypsy]

Agree with asking for a bond if they do rent it. How much area would they be looking to rent? $10k doesn't seem worth the hassle unless they did a bunch of favors.

Interesting that everyone thinks heavy hwy is a lucrative industry. Maybe it is for some players but margins are slim where i've been exposed to it. My last employer jumped out of that industry a long time ago because you're only notably profitable if you underbid and change order the hell out of the govt. It's a shitty way of doing business compared to working for private customers where you can create value, charge more, and not have to be the lowest bidder to get awarded work.

 

[Ikeman]

As far as rates, I can not help. That is based on going rates in your area and the availability of alternate choices (or lack thereof).

About 5 years ago, a road crew contracted with my grandmother to pull fill material for a nearby bridge construction, so I do have a little knowledge of what needs to be in the contracts as far as future impacts to the land.

My family negotiated the removal (and storage) of the top layer of topsoil for all road and extraction areas. At the end of construction, the built road was required to be deep ripped multiple times with a deep subsoiler to break compaction from equipment, built up to just short of original grade, and then original topsoil placed atop the build up to the original grade plus assumed settling height.

The extraction location was at the back of a pond, which would expand its size. So, the completion of that location required either extraction to cease at a later of clay, a clay lining to be applied to the final depth of extraction, or a treatment of bentonite to be applied to the specifications of a pond expert and the provision for a second application (to the specification of said expert) if the pond still showed signs of leaking after 1 year.

If this if just a field, I would be concerned primarily with compaction, but I would also want a provision for the storage and return of topsoil so you are not stuck with dealing with a heavily compacted (and gravel filled) field in the end.


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[Ikeman]

Just saw that the company decided not to proceed. Honestly, it is often for the best to not deal with it.


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[buckdeer1]

Asphalt grindings are ok if theres not much dirt in with them,if there is you will be adding gravel on top.

 

[SD51555]

I wonder if a guy didn’t rip the yard with a shank on a D6 or D8 if that wouldn’t help bring it back to life?


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[Mortenson]

Looking for opinions on a different matter concerning this same piece of farmland, if anyone has one to give! The town needs to install another deep trunk sewer to service a separate area. 5 years ago they approached us and other neighboring landowners. They were applying for a grant, time was of the essence, they sold it as having a valuable sewer on our property, they pushed to sign quickly and we would all meet again down the road to satisfy all of our demands, mostly addressing crop damages and reclamation of the area. Now 5 years have passed and they finally secured their grants totaling over 6 million. The route has changed since then, now going through different areas of the farm. A new contract needs to be signed. We have soured to this idea. Seems nothing is in it for us, just a massive favor to the city. But is that where I'm wrong? Can a 30 foot deep trunk sewer service any future development that may come to our land? Or is that not even possible? 15 years ago we allowed a different deep trunk sewer along our farm, on a different road (the road in the original post of this thread). It was sold to us as being "a million dollar sewer for free" and we'd be fools not to allow it. Since then we've basically been told that sewer is already overloaded. I'm not sure if our attorney is being duped by the city, or is he not qualified to legally advise in such specialized matters? I wonder if I should seek out counsel from a specialist in a bigger city. Seems since these 5 years have passed, they're hyping it less as something that would directly benefit us. No compensation being offered other than what we determine damages will be. Is this a project that usually offers compensation? Will this place restrictions on our land? The route is directly along two roads with high traffic volumes (valuable lots in my opinion). Thanks!