Chapter 3.84
SALE, LEASE AND LICENSING OF
CITY-OWNED REAL PROPERTY
Sections:
Article I. Sale of Property
3.84.010 Sale of real property—Council resolution required.
3.84.020 Extra procedural requirements for certain categories of property.
3.84.030 Public bid not required.
3.84.040 Fair market value of real property to be determined prior to sale.
3.84.050 Sale to be conducted in a commercially reasonable manner.
3.84.060 Elected officials and employees not to benefit from sale.
Article II. Leasing or Licensing of Property
3.84.070 Council considerations in determining whether to approve a lease or license.
3.84.080 Leasing and licensing of real property—Exempt agreements.
3.84.090 Agreements to license distinguished from agreements to lease.
3.84.100 Leasing/licensing to be conducted in a commercially reasonable manner.
3.84.110 Responsibility for administration.
3.84.120 Methods for leasing/licensing.
3.84.130 Effect of additional statutory requirements.
Article I. Sale of Property
3.84.010 Sale of real property—Council resolution required.
The city may sell and convey real property of the city if the city council first determines by resolution that the property is no longer required for city purposes or determines by resolution that the sale of such property is in the best interest of the city or will further the purposes of the city and, second, authorizes the sale or conveyance of such property. (Ord. 2935-06 § 1, 2006)
3.84.020 Extra procedural requirements for certain categories of property.
If the city proposes to sell real property that has a value estimated to be more than fifty thousand dollars, and if the sale or conveyance is to another governmental entity, the provisions of Chapters 39.33 and 39.34 RCW shall apply, including a public hearing and certain notice provisions. If the real property was originally purchased for utility purposes, the provisions of RCW 35.94.040 shall apply, including its provisions for a resolution and a public hearing. (Ord. 2935-06 § 2, 2006)
3.84.030 Public bid not required.
The city council may, by resolution, direct the city to engage in a public bid process prior to the sale of city-owned real property. The procedures and criteria to be used in the public bid process for the sale of such property shall take into consideration the best interest of the city as well as the nature of the property to be conveyed or sold and shall be set forth in the resolution directing the specific bid process. In the absence of a resolution directing the use of a public bid process, the city is not required to engage in a public bid process prior to the sale of real property. In the case of any sale of city-owned real property, the city may sell the property upon whatever reasonable and lawful terms and conditions it determines are appropriate. The city shall reserve the right to reject any and all bids or proposals. (Ord. 2935-06 § 3, 2006)
3.84.040 Fair market value of real property to be determined prior to sale.
The city shall determine the fair market value of any real property prior to its sale, based on the certified appraisal report of a state licensed and qualified appraiser who shall prepare the report in conformity with the Code of Professional Ethics of the Appraisal Institute and the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation. No real property of the city shall be sold for less than ninety percent of such appraised value. (Ord. 2935-06 § 4, 2006)
3.84.050 Sale to be conducted in a commercially reasonable manner.
The city shall conduct the sale or disposition of any city-owned real property in a commercially reasonable manner as determined by the city’s real property manager. (Ord. 2935-06 § 5, 2006)
3.84.060 Elected officials and employees not to benefit from sale.
It is recognized that city council members and the mayor are prohibited by state law from benefiting from the sale or disposal of the public assets of the city. Any city employee or city elected official involved in the decision to sell or dispose of a city asset, or involved in administering the sale or disposition of a city asset, shall not benefit from the sale or disposition of such asset. (Ord. 2935-06 § 6, 2006)
Article II. Leasing or Licensing of Property
3.84.070 Council considerations in determining whether to approve a lease or license.
Except as otherwise provided in this article, city-owned real property shall not be leased without prior city council approval. In determining whether to approve a lease or license, the council shall consider such factors as possible future needs of the city for the property proposed to be leased or licensed; the public benefits of leasing or licensing said property; the promotion of intergovernmental cooperation; whether the lease or license provides the best economic return to the city and the ease of administering the proposed lease or license. (Ord. 2974-07 § 1, 2007)
3.84.080 Leasing and licensing of real property—Exempt agreements.
The following types of agreements may be approved by the mayor or his designee without prior council approval and shall be exempt from the requirements of Section 3.84.070:
A. An agreement with an independent contractor to provide limited concession services on city-owned real property on a seasonal or temporary time basis.
B. Agreements to lease an interest in city-owned real property where the term does not exceed one year and the city can terminate the lease upon thirty or fewer days’ notice.
C. Agreements to license the use of city-owned real property where the term does not exceed one year and the city can terminate the license upon thirty or fewer days’ notice.
D. Renewals of leases pursuant to options to renew contained in the lease agreements where the rate is the same or higher and other terms are not substantially different from the existing lease. (Ord. 2974-07 § 2, 2007)
3.84.090 Agreements to license distinguished from agreements to lease.
The city may enter into agreements to license city-owned property when the city does not wish to grant a possessory interest in such property but does wish to authorize the licensee to carry out an act or series of acts on such property. Agreements to license shall not purport to grant a possessory interest in city-owned property, shall not be inheritable nor assignable, and shall be revocable at the will of the city. To the extent that they are not inconsistent with the foregoing limitations, the standards set forth in Sections 3.84.070 through 3.84.120 for leasing shall also apply to licensing of city-owned real property. (Ord. 2974-07 § 3, 2007)
3.84.100 Leasing/licensing to be conducted in a commercially reasonable manner.
Except for leases or licenses to nonprofit organizations that serve poor or infirm persons or other governmental entities, the city must conduct the leasing of any city-owned real property in a commercially reasonable manner. The city’s facilities director or real property manager or the city department head most directly affected by the use of the real property in question shall make the initial determination that the proposed real estate transaction is commercially reasonable and ensure that the city receives adequate consideration in any lease or license agreement. (Ord. 2974-07 § 4, 2007)
3.84.110 Responsibility for administration.
The mayor or his designee is responsible for the administration of the lease or license of city-owned real property and shall coordinate the leasing of interests in city land or buildings. (Ord. 2974-07 § 5, 2007)
3.84.120 Methods for leasing/licensing.
The city may lease or license city-owned real property using one of the following methods:
A. A call for bids to obtain the highest obtainable rent given the terms.
B. A request for proposals to obtain a proposal that provides the most advantageous special conditions on the use of the city-owned real property.
C. Negotiations with a designated person or organization.
In conjunction with any method above, a public hearing on the proposed lease or license may be set and the hearing held prior to taking action on the proposed lease or license.
For those leases or licenses that come before council, in conjunction with bringing the proposed lease to council, the affected department head will make a recommendation to the council as to the method that may be most appropriate for achieving the council’s goals with respect to the city-owned real property. (Ord. 2974-07 § 6, 2007)
3.84.130 Effect of additional statutory requirements.
Certain provisions of the Revised Code of Washington impose additional and/or inconsistent conditions on the leasing of city-owned real property. Where necessary, the city shall comply with those laws, treating them as limited exceptions to this article. The following are merely examples of these laws as they may from time to time be amended. The advice of the city attorney’s office should be sought whenever there are questions about the application of laws to proposed leasing transactions:
A. Chapter 35.94 RCW, relating to the lease or sale of land, property or equipment originally acquired for public utility purposes, imposes additional steps to those otherwise required in other sections of this article.
B. Chapters 39.33 and 39.34 RCW impose additional steps to those otherwise required in other sections of this article. These statutes affect intergovernmental real estate transactions where the estimated value of the property exceeds fifty thousand dollars.
C. RCW 35.42.010—35.42.090, relating to leasing of city-owned land where the purpose of the lease is to erect a building for city use and lease back the building, impose additional conditions to those already required in other sections of this article. (Ord. 2974-07 § 7, 2007)