The FM Area Diversion includes a Southern Embankment south of the metro area that will hold back floodwaters during times of extreme flooding.
The area where water is retained during project operation is called the Upstream Mitigation Area, or UMA. The member entities of the Metro Flood Diversion Authority are required to obtain flowage easements within the UMA.
The Metro Flood Diversion Authority has contracted with Crown Appraisals, Inc. to provide research regarding property values to develop the value of the necessary flowage easements. This page includes information related to the development of flowage easement values.
Why is a Flowage Easement needed?
- The FM Area Diversion Project (Project) includes temporary retention of floodwaters upstream of the Project. The upstream retention is a necessary component of the Project, and it will periodically and temporarily store flood waters.
- The member entities of the Metro Flood Diversion Authority (MFDA), must obtain flowage easements to provide the legal right to periodically and temporarily store water on properties in the Upstream Mitigation Area (UMA).
- There are various federal and state agencies that dictate where flowage easements will be necessary. For example, the North Dakota Office of State Engineer has indicated that the MFDA will need to mitigate (presumably through the acquisition of a flowage easement) for the modeled floodwater depth increase of 0.5-feet or more up to the one percent annual chance exceedance event (100-year flood).
- The US Army Corps of Engineers (USACE) has designated portions of the UMA as Federal Mitigation Zone 1, where no development will be allowed. Development within Mitigation Zones 2, 3, and 4 may be allowed in accordance with local floodplain development ordinances, rules, regulations, and the terms and conditions of the flowage easement.
Where will Flowage Easements be needed?
- The member entities of the MFDA are required to obtain flowage easements in the UMA as mitigation for the temporary storage of floodwaters during Project operations.
- The UMA is defined using four mitigation zones, summarized as follows.
Mitigation Zone Definitions
· This is an area where the Project causes a floodwater depth increase of 1-foot or greater for the 100-year and 500-year flood events (whichever is greater) within Cass and Clay Counties and along the Red River corridor within Richland and Wilkin Counties.
· This is an area where the Project causes a floodwater depth increase of 1-foot or greater for the 100-year and 500-year flood events (whichever is greater) within Richland and Wilkin Counties.
· This is an area in North Dakota beyond Federal Mitigation Zone 1 and Zone 2 where the Project causes a floodwater depth increase of 0.5-feet or more at the 100-year flood event.
· This is an area in Minnesota beyond Federal Mitigation Zone 1 and Zone 2 where the Project causes a floodwater depth increase of 0.1-feet or more from flood events up to and including the Probable Maximum Flood (PMF) flood event. Mitigation Zone 4 is comprised of three subzones reflecting the flood event that defines the boundary of impacts.
· This is an area in Minnesota beyond Federal Mitigation Zone 1 and Zone 2 where the Project causes a floodwater depth increase of 0.1-feet or more at the Probable Maximum Flood PMF event.
· This is an area in Minnesota beyond Federal Mitigation Zone 1 and Zone 2 where the Project causes a floodwater depth increase of 0.1-feet or more at the 500-year flood event.
· This is an area in Minnesota beyond Federal Mitigation Zone 1 and Zone 2 where the Project causes a floodwater depth increase of 0.1-feet or more at the 100-year flood event.
What is a Flowage Easement?
- The flowage easement provides the legal right to temporarily inundate property as part of the operation of the Project.
- USACE policy defines the compensation for a flowage easement as a one-time payment made at the time that the flowage easement is acquired for all impacts caused by the Project, such as potential loss of development rights, agricultural production impacts, and periodic and temporary flooding impacts.
- Flowage easements will allow for farming to continue on properties subject to the terms of the flowage easement; however, development will be limited
How will the payment for the flowage easement be determined?
- Factors that will be considered include the depth, duration, and frequency of additional flooding, and the highest and best use of the property.
- An appraiser will conduct a “before and after” valuation in which the market value of the property before the flowage easement is determined, and the market value of the property with the flowage easement applied is determined. The just compensation to be paid to the landowners for the flowage easement will be determined using the difference between the before and after valuations.
- When determining the devaluation caused by the flowage easement, the appraiser may consider future impacts caused by the temporary storage of water on the property as allowed by the flowage easement, including delayed planting, yield loss, debris, and limitations to future land use.
- Values of flowage easements will vary depending on the location and type of the property, magnitude of impacts, and future risks to the property.
- The flowage easement payment will be a one-time payment to the property owner. The payment will be made when the easement is acquired.
- The valuations will be compliant with Uniform Standards of Professional Appraisal Practice (USPAP) and applicable state and federal guidelines.
What are the terms and conditions of the flowage easement?
- The flowage easement will describe the “Easement Property” upon which the easement applies. If less than all of a particular property will be covered by the flowage easement, the “Easement Property” will be shown by survey.
- The flowage easement will provide the right to occasionally overflow, flood, and submerge the Easement Property in connection with the operation of the Project as well as actions necessary to enforce compliance with the easement.
- The flowage easement will restrict or prohibit development potential within the Easement Property in compliance with the Federal Emergency Management Agency (FEMA) and local floodplain development rules.
- The flowage easement will require removal of all structures in Mitigation Zone 1, and insurable structures not meeting floodplain management rules in the other mitigation zones.
- The flowage easement will provide access rights related to the Project for removing flood-related debris deposited on the Easement Property due to operation of the Project upon Grantor’s request; removing structures, obstructions, and any other obstacles from the Easement Property; conducting compliance inspections; and necessary and reasonable rights of ingress and egress to and from the Easement Property subject to the provisions regarding crop damages.
- The flowage easement will define acceptable use of the property by Grantor (property owner) and Grantee.
- The flowage easement will allow property owners to mortgage the property as long as the mortgage is subordinate to the flowage easement.
- The flowage easement will outline and reference a Dispute Resolution Board as an optional mechanism for property owners to bring claims if they believe they suffer future damages not compensated for in the flowage easement acquisition.
- The flowage easement will also contain other legal terms including governing law, severability, etc.
When will the Flowage Easements be obtained?
- Flowage easements need to be acquired prior to construction of the last segment of southern embankment for the Project. The current schedule indicates that all flowage easements will need to be acquired by late 2024.
- It is anticipated that several years will be required to acquire all of the flowage easements necessary for the Project.
- The member entities of the MFDA may start early in approaching property owners in the UMA to acquire flowage easements.
Who will obtain the flowage easements?
- In North Dakota, the Cass County Joint Water Resource District (CCJWRD) will acquire the flowage easements.
- In Minnesota, the City of Moorhead, Clay County, or the Moorhead Clay County Joint Powers Authority (MCCJPA) will acquire the flowage easements.
Sample Flowage Easement
This sample document outlines the components and requirements of flowage easements. Flowage easements will be customized to each specific property and will be recorded.Sample Flowage Easement
Upstream Mitigation Area
Jeff Berg - Crown Appraisals
ARA, ASA, RFICS
Jeff is a Minnesota native with over 35 years of experience in agriculture and agribusiness. Prior to founding Crown Appraisals, he managed a grain and cattle operation – purchasing, trading, and selling farm equipment, agricultural production, cattle, and land. Jeff was the 2011-2012 National President of the ASFMRA (American Society of Farm Managers and Rural Appraisers).
Jeff holds his Certified General Appraiser License in Minnesota, North Dakota, and several other states. He has experience appraising property across the entire U.S. Jeff also holds his bachelor’s degree in Business Administration.
Brian Field - Crown Appraisals
ARA – Licensed appraiser in North Dakota, Minnesota, South Dakota and Montana
Brian Field is a Certified General Appraiser in Minnesota, North Dakota, and other states. Brian is a native of Barnesville, MN. He received a Bachelor’s degree in Business from Concordia College in Moorhead, MN and a Master’s degree from the University of Minnesota. He earned his ARA designation from the ASFMRA in 2011. Brian has been appraising for over 15 years with experience in numerous agribusinesses, commercial, industrial, and agricultural properties.
More About Crown Appraisals
Crown Appraisals has been actively engaged in land appraisals for over 35 years here in the Red River Valley. Expertise in agricultural land and transitional land valuation has been focused on the Red River Valley along with the valuation of agribusinesses nationwide. Crown Appraisals has dealt with varying levels of ownership interests including partial interests and fractional interests.
Appraisers at Crown Appraisals have the training, experience, and expertise to perform credible, well-supported appraisals for area landowners.
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Flowage Easement Background Information and Development
Phase 1 Report
Phase 1 Report was prepared in 2018 incorporating work from a team of experts led by Crown Appraisals, Inc. The focus was on researching comparable sales data and building a regression model to analyze market value changes due to similar flood risk in other areas across the nation.
Phase 1B Report
Phase 1B was prepared 2020, and focused on including market data from recent years.
Phase 1 Presentation
This presentation was given by Crown Appraisals to the MFDA's Land Management Committee in December 2018 to present the findings of their Phase 1 Flowage Easement Valuation Study.
Phase 1B Presentation
This presentation was given by Crown Appraisals to the MFDA's Land Management Committee in August 2020 to present the findings of their Phase 1B Flowage Easement Valuation Study.