Offsite Improvements

The Underbelly of Traffic Signals?

Usually resulting from a traffic study and a required mitigation measure, the installation of a traffic signal in an offsite location can add some significant costs to a project.  I have seen many traffic signals in cost estimates, and the going rate seems to be in the neighborhood of $200,000 to $225,000.  Not a cheap condition to satisfy.

However, beware of some key issues that can significantly add to that signal budget.  Recently, I had a project where the traffic signal was to be installed at an old rural intersection where the alignments were deemed unsafe for a traffic signal.  Thus, a realignment of the two streets and intersection were necessary to accommodate the installation of the new traffic signal.

First, we needed some right-of-way (ROW) from property owners on two of the corners to provide for the realignment.  One owner was a church, and as it turned out, we were doing some improvements adjacent to this church that was to their benefit.  Other than the cost of the documents, this ROW acquisition was basically free.  On the other corner was a rental home on an acre of land.  Although the ROW to be acquired had little affect on their property, the owner was not planning to cooperate.  In the end, we had to buy the property (at above market price), carve off the ROW, then resell the home.  Beware when ROW is needed.

A second expensive issue was underground water transmission lines that ran within the old alignment.  Grading the new alignment and installing the new streets meant dealing with the water agency who owned the water lines (and easements), which added some significant expense.  Another expensive element was relocating some above-ground power poles.  The existing pole would have been right in the middle of the new alignment and required negotiation with the utility company to move to the new corner.  Not a cheap item at all.

By the time this traffic signal was installed, the cost was well over $1.0 million.  If you are installing a traffic signal within your tract boundaries and working on a clean slate, you probably will be budgeting in that $225,000 neighborhood.  But watch out for those offsite locations.

If you have some experience, comments, or questions, please share with us below.

John Kaye has over 30 years experience within the land development and homebuilding industries, having held senior management positions with The Irvine Company, Koll Real Estate Group, and Brookfield Homes. As a developer, John has overseen the land acquisition, entitlements, and development of master planned communities, residential tracts, urban infill sites, and land assemblages. His experience and skill sets include land acquisition, land brokerage, project management, market analysis, finance, and strategic planning.

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