CORRIDOR FACTOR Sample Clauses
The Corridor Factor clause defines a method for adjusting payments or obligations based on a specified range or 'corridor' of values, often used in financial or insurance agreements. In practice, this clause sets upper and lower thresholds, and only values falling within this corridor are considered for certain calculations, such as determining payouts or coverage. By establishing these boundaries, the clause helps manage risk and ensures that parties are only responsible for amounts within a mutually agreed range, preventing unexpected liabilities outside the corridor.
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CORRIDOR FACTOR. The next step in corridor valuation is the application of a corridor factor (CF), defined as, “... the ratio of the corridor sales price divided by its ATF, as of the date of sale15. Corridor factors are generally recognized to be greater than one because, in addition to the cost of land, significant expenditures are required in the assemblage, including: engineering costs, legal fees, condemnation costs (including severances damages to remainder), cuts/fills, etc. As outlined previously, client has requested three corridor factor scenarios in an effort to openly reconcile widely divergent value conclusions. The first is premised on corridor factors based primarily on transactions outside of New York State. Although a significant amount of data is available for consideration, the factors steeply discount the costs required to assemble a corridor and do little to make New York rate payers whole (a National Grid priority). Alternative #2 is based on National Grid’s actual experience in Upstate New York. FERC’s accounting rules are used as the basis, which omit initial vegetation clearing costs and the construction of access roads. This scenario effectively discounts much of the costs associated with a replacement corridor, but not to the degree of Alternative #1. Final scenario considers all acquisition costs to assemble a hypothetical corridor, including those disregarded by FERC rules. Again, National Grid’s actual experience provides the basis for the analysis. Refer to the following for further discussion. Opinions vary as to what an appropriate corridor factor should be. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, CRE, MAI, author of “The Continuing Evolution of Corridor Appraising”, finds that most corridor factors range between 1.1 and 2.0, with freight lines at the low end of the range. A second article, written by ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, MAI (“A Logical Approach to Appraising Railroad Right of Ways”) quotes a similar overall range, although rail corridor sales show a slightly higher CF at 1.42 (see table below). 15 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, CRE, MAI, “The Continuing Evolution of Corridor Appraising,” Right Of Way Magazine May/June 2002: 16. Illinois 56.5 4.66 $5,025,000 $88,938 $51,097 1.74 Electric Transmission Maryland 77.6 12.73 79,000 1,018 624 1.63 Electric Transmission Illinois 31 2.16 $150,000 $4,839 $3,000 1.61 Rail Service Pennsylvania 72.8 6.9 7,416,000 101,868 61,667 1.65 Rail Service Iowa 19.73 1.33 37,116 1,881 2,563 0.73 Rail Service by Industry Washington 1639.18 123.1 ...