REAL ESTATE ACQUISITION

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1 REAL ESTATE ACQUISITION

2 Summary of Real Estate Acquisition Guidelines Planning Phase 1. Define the right-of-way needed through preliminary design of the project; 2. Obtain surveys for right-of-way needed; and 3. Meet with property owners to discuss the project, the right-of-way to be acquired, and the acquisition process. Independent Appraisals 4. Secure independent appraisals estimating compensation for the right-of-way to be acquired; and 5. Secure review appraisals by a second independent appraiser. Review and Negotiation 6. All appraisals are reviewed by the Right-of-Way Committee and Special Outside Counsel to the Board of Directors; 7. All acquisitions with Board Member ownership or direct involvement will be identified; 8. Right-of-way Committee recommends offers to the full Board of Directors for consideration and informs the Board of any Board member ownership or direct involvement; 9. The Board authorizes offers based upon the appraisals and after consultation with Special Outside Counsel; 10. Board members with ownership or direct involvement will be required to disclose of involvement and abstain from voting; 11. All compensation estimates over $500,000 must be reviewed and approved by the Federal Transit Administration before offers can be submitted; and 12. Negotiations with property owners for purchase of right-of-way tracts begin. Purchase 13. If negotiations are successful, the Board will be asked to approve and authorize all purchases and compensation amounts; 14. Special Counsel to the Board will render fairness opinions on all transactions involving Board Members and on any other transaction requested by the Board; 15. Properties will be purchased and deeded to the City of Houston; and 16. Any properties that cannot be voluntarily purchased will be referred to the City of Houston for possible acquisition by eminent domain.

3 Harris County Improvement District No. 1 and Uptown Development Authority REAL ESTATE ACQUISITION GUIDELINES FOR THE POST OAK BOULEVARD STREET RECONSTRUCTION PROJECT APPROVED BY: HCID NO. 1: NOVEMBER 19, 2014 THE AUTHORITY: NOVEMBER 19, 2014

4 TABLE OF CONTENTS I. PROJECT OVERVIEW...1 II. ACQUISITION PROGRAM...1 A. Property Identification...1 B. Title Work...2 C. Letters of Intent...2 D. Surveys...2 E. Environmental Assessments...2 F. Notices of Intent...2 G. Appraisals...3 H. Right-of-Way Acquisition Committee/Just Compensation...3 I. Offers to Purchase...3 J. Uneconomic Remnants...4 K. Administrative Settlements...4 L. Ninety-Day Notice to Vacate...4 M. Closings...4 N. Thirty-Day Notice to Vacate...5 O. Eminent Domain...5 III. RELOCATION ASSISTANCE PROGRAM...6 A. Guidelines...6 B. Benefits/Advisory Services...6 C. Business and Non-Residential Relocation...7 D. Right to Appeal...7 2

5 REAL ESTATE ACQUISITION GUIDELINES FOR THE POST OAK BOULEVARD STREET RECONSTRUCTION PROJECT I. PROJECT OVERVIEW Harris County Improvement District No. 1 ("HCID No. 1") and the Uptown Development Authority (the "Authority") are planning the expansion and reconstruction of the two-mile segment of Post Oak Boulevard between IH 610 and Richmond Avenue (the "Project"). The Project will involve: Acquisition of the property interests necessary to increase the width of the rightof-way to approximately 136 feet; Reconstruction and improvement of the entire street cross section; Preservation of six lanes for general traffic; Improvements to sidewalks, landscape and hardscape, pedestrian lighting, and other pedestrian amenities; and Construction of infrastructure for bi-directional bus service operating in dedicated lanes in an expanded median. It is anticipated that the Project will be funded in part through a grant from the Federal Transit Administration ("FTA") and thus will be subject to the requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (42 U.S.C et seq.), and its implementing regulations (49 C.F.R. Part 24), collectively referred to as the "Uniform Act." It is anticipated that HCID No. 1 will be the recipient of the FTA grant. The Authority will be responsible for contracting the design and engineering of the improvements to Post Oak Boulevard, acquiring the necessary property interests, and constructing the Project. II. ACQUISITION PROGRAM The acquisition of the right-of-way necessary to construct the Project will be conducted in accordance with the following guidelines (the "Guidelines") and the Uniform Act. A. Property Identification In conjunction with the design and engineering of the Project, the right-of-way requirements are being defined. Each parcel determined to be necessary for the Project will be assigned an identification number, which will be used to track the parcel through the right-of-way acquisition process.

6 B. Title Work As each parcel is identified, the Authority will arrange for: Preliminary title research to determine the ownership of the parcel; and The issuance of a title commitment for the parcel. All title support services will be obtained from a title company regulated by the State of Texas. C. Letters of Intent As each parcel is identified, the Authority will arrange for the preparation of a survey, any necessary environmental assessments, and an appraisal. To the extent it is necessary for the Authority, its employees, or its consultants to gain access to the property to perform this work, the impacted property owner will be provided one or more Notices of Intent to enter the property in connection with the preparation of the required surveys, inspections, and assessments. These written notices will be either hand delivered or sent by certified mail, return receipt requested and regular first class mail. The Authority's acquisition consultant will be primarily responsible for coordinating the necessary site visits with the property owners and, as appropriate, shall be in attendance during the surveys, inspections, and assessments. D. Surveys Each parcel will be surveyed by a Texas Registered Public Surveyor. The surveyor will be required to provide a signed and sealed metes and bounds description of each parcel and a signed and sealed plat satisfying the Category 1A, Condition II standard as defined in the Texas Society of Professional Surveyor's Manual of Practice for Land Surveying in Texas. E. Environmental Assessments Phase I Environmental Site Assessments have been completed for the Project. After review of the Phase I reports, a determination will be made if there is a need for additional (Phase II and/or Phase III) environmental work. F. Notices of Intent Upon confirming that a parcel is required for the Project, the acquisition consultant will arrange for the property owner to be provided a relocation notice conforming to the requirements of 49 C.F.R. Section (a).

7 G. Appraisals Each parcel will be independently appraised by a Texas State Certified real estate appraiser experienced in developing opinions of market value and compensation for similar public improvement projects. Appraisers will be selected by the acquisition consultant. The appraisals will conform to the requirements of the Uniform Standards of Professional Appraisal Practice and the Uniform Act. Once an appraisal is ordered, the property owner will be notified that the appraiser intends to inspect the property and informed that the owner or the owner's representative may accompany the appraiser during that inspection. Upon the completion of each appraisal, an independent appraisal review will be performed pursuant to the Uniform Act. H. Right-of-Way Acquisition Committee/Just Compensation The Authority's Board of Directors will appoint a committee, to be designated the Right-of-Way Acquisition Committee (the "ROW Committee"), composed of members of the Authority's Board who neither own nor are representatives of companies that own property required for the Project. Special outside counsel ("Counsel") will be retained to advise the ROW Committee in connection with the performance of its duties and all aspects of the acquisition process, with special consideration given to the fairness of each transaction and to potential conflicts of interest. The ROW Committee and Counsel will review each appraisal and appraisal review. After conferring with Counsel, the ROW Committee will establish just compensation for each parcel. With respect to any property for which the recommended just compensation exceeds $500,000, the appraisal and appraisal review will be submitted to the FTA for concurrence prior to the issuance of an offer. All requests for FTA-required approvals shall be in letter form signed by the President of HCID No. 1 or his designated representative to the FTA Regional Administrator or his designated representative and shall include the applicable appraisals and appraisal reviews as attachments. I. Offers to Purchase Following the completion of the appraisal process and the establishment of just compensation for a parcel, the Authority's Board of Directors will be requested to authorize the issuance of an offer to purchase the necessary right-of-way. The approved just compensation will be the basis for the offer. All negotiations will conform to the applicable requirements of the Uniform Act and the Texas Property Code.

8 Whenever practical, offers will be made to the property owner in person. In the case of a property owner as to which it is not practical to make an offer in person, an offer packet will be sent by overnight delivery using a reputable national courier service. The acquisition consultant will contact the property owner and initiate the negotiations to purchase the right-of-way. The Authority will make every reasonable effort to acquire all necessary right-of-way through good faith negotiations. Counteroffers will be reviewed by the ROW Committee and Counsel and, if the ROW Committee deems them appropriate, will be submitted to the Board for approval. If an agreement is reached, a closing date will be set with the title company and closing procedures will begin. J. Uneconomic Remnants In any situation in which a partial acquisition would leave the landowner with property having little or no utility, the Authority will pursue an agreement with the landowner regarding the acquisition of any such uneconomic remnant. K. Administrative Settlements If the negotiations with a property owner result in an agreement to acquire the necessary right-of-way for compensation that exceeds the estimated just compensation, the acquisition consultant and property owner may request the approval of an administrative settlement. Any proposed administrative settlement must be supported by documentation justifying the amount of the settlement and approved by the ROW Committee and the Authority's Board of Directors. In addition, any administrative settlement involving a property owner who serves on or whose representative serves on the Board of Directors of either HCID No. 1 or the Authority shall be subject to a fairness review by Counsel prior to being submitted for consideration by the ROW Committee and the Board. Any administrative settlement will be subject to all necessary FTA approvals. Upon receiving all necessary approvals for an administrative settlement, a closing date will be set with the title company and closing procedures will begin. L. Ninety-Day Notice to Vacate Promptly following the execution of a Purchase and Sale Agreement on behalf of the Authority and the property owner, the Authority will issue a 90-day Notice to Vacate, in accordance with the requirements of 49 C.F.R. Section (c). M. Closings Once an offer has been accepted or a settlement has been reached, all necessary documentation for the closing will be sent to the title company in a "closing packet".

9 The closing packet will include: An original Purchase and Sale Agreement executed on behalf of the Authority and the property owner or a form of Closing Memorandum to be executed at the closing; A legal description prepared based on the Survey; Survey; Necessary documents of conveyance to be executed and acknowledged by the property owner; Instructions to the title company, including instructions relating to the proration of property taxes; and Any other documentation required for the closing. Unless the City of Houston (the "City"), HCID No. 1, and the Authority otherwise agree, all right-of-way will be acquired through conveyance instruments vesting title in the City. Once the title company has received all properly signed documents and been authorized to proceed with closing, the title company will (i) disburse the agreedupon purchase price and any closing costs to the property owner and any other parties entitled to receive such funds, as shown on an executed closing statement, (ii) record the conveyance instrument and other closing documents, and (iii) issue the title policy. N. Thirty-Day Notice to Vacate If necessary, promptly following closing, the Authority will issue a 30-day Notice to Vacate stating the specific date by which the property owner must vacate the parcel being acquired, in accordance with the requirements of 49 C.F.R. Section (c). O. Eminent Domain HCID No. 1 and the Authority do not possess the power of eminent domain, and they thus will not seek to acquire right-of-way required for the Project through condemnation proceedings. However, if attempts to purchase right-of-way are unsuccessful and an administrative settlement cannot be reached, HCID No. 1 and the Authority may request the City to exercise its power of eminent domain to acquire the right-of-way. In conjunction with the submission of such a request to the City, the Authority will provide to the City's Director of Public Works and Engineering copies of (i) all title information relating to the parcel, (ii) the survey of the parcel, (iii) all environmental site assessments and other such reports, and (iv) all

10 communications with the property owner relating to the Authority's efforts to acquire the parcel. III. RELOCATION ASSISTANCE PROGRAM The purposes of the Relocation Assistance Program (the "Relocation Program") are to assist property owners in identifying suitable replacement properties and to reimburse them for reasonable and necessary expenses incurred in connection with relocation from the properties acquired for the Project. The Relocation Program is made up of the following elements: Guidelines Benefits/Advisory Services Business and Non-Residential Relocation Right to Appeal Any payment due to a qualifying displaced person and/or business (hereinafter, a "displacee") under the Relocation Program shall be made in addition to, and not as a substitute for, any just compensation paid to the property owner for the purchase of the property interest acquired. A. Guidelines The Uniform Act requires that relocation advisory services and relocation assistance payments be provided to eligible individuals and/or businesses who are displaced as a result of a program or project receiving federal financial assistance. Accordingly, the relocation of displaced persons and businesses in connection with the Project will be carried out in compliance with the Uniform Act and all other applicable laws. B. Benefits/Advisory Services Relocation assistance benefits and advisory services will be provided to each displacee without regard to race, color, sex, religion, country of national origin, handicap or familial status. A designated relocation consultant will be retained to communicate with each displacee regarding the benefits to which it is entitled under the Relocation Program. The relocation consultant will attempt to schedule an appointment with the displacee during the early stages of the acquisition process to explain the Relocation Program and gather information to help determine the benefits for which the displacee is eligible. If the property is occupied by a tenant, the relocation consultant will ask the property owner for tenant information and schedule an appointment to meet with the

11 tenant. A Relocation Brochure will be given to all persons being displaced as a result of the Project. This brochure will outline the benefits and procedures for Relocation. Owner-occupants will also receive an Acquisition Brochure. C. Business and Non-Residential Relocation Once a non-residential survey has been completed and a determination of eligibility has been made, the relocation consultant will meet with the business owner to discuss relocation needs, including requirements relating to space, location, site configuration, and cost, as well as moving options. The relocation consultant will be responsible for all facets of the move. Advisory services will be provided to help the displacee understand the program and the options with respect to its implementation. Businesses are eligible for moving and moving related expenses and reestablishment and search costs. Alternatively, they have the option of a payment in lieu of all other reimbursements, which is an all inclusive flat amount based on the business's net income for the two (2) years prior to the year in which the displacement occurs. If the business owner is a tenant, the landlord also will be advised of its entitlement to benefits related to moving personal property that it may have on the premises. All reimbursements and advisory services will be administered in accordance with the Uniform Act. D. Right to Appeal If a displacee believes that an error has been made in the determination of its eligibility or relocation payment, the displacee may file a written appeal within sixty (60) days after the displacee receives written notification of the determination of the displacee's claim.

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