Surplus Property Disposition : How to Win the Game for Your Agency . . . And Stay Out of Jail

1. Surplus Property Disposition: How to Win the Game for Your Agency . . . And Stay Out of Jail John C. Murphy, Esq. Emily L. Madueno, Esq. Murphy & Evertz LLP June 13, 2011

2. EMINENT DOMAIN IN THE MOVIES ●Eminent Domain (December, 1991) ●The Hitchhiker’s Guide To The Galaxy (April, 2005)

3. The Bells of St. Mary’s (1945)

4. Blazing Saddles (1974)

5. American Outlaws (2001)

7. UP (May, 2009)

9. GOALS • 1. What is Surplus Property? • 2. What Policies Govern Surplus Property Disposition? • 3. What are the Costs and Benefits of Such Disposition?

10. “Surplus Property” Defined “The term ‘excess property’ means property under the control of a federal agency that the head of the agency determines is not required to meet the agency’s needs or responsibilities.” (40 U.S.C. § 102(3).)

11. “Surplus Property” Defined “Excess land is real property, title to which is vested in the State of California, Department of Transportation, and which is determined and certified to be not required for rights of way or other operational purposes of the Department.” (California Department of Transportation Right-of-Way Manual, § 16.01.03.01.)

12. “Surplus Property” Defined “The Board will adopt a resolution with respect to each parcel of surplus property declaring: (a) That the property is no longer needed by the district.” **“Open and inclusive public input process” (Portland Public Schools, Board Policy, 8.70.040-P)

13. “Surplus Property” Defined “A City owned property may become available for sale if: • The property is not currently used by a City department or does not support a municipal function. • The property is vacant and has no foreseeable use by City. • The property is a non-performing or under-performing asset and greater value can be generated by its sale. • Significant economic development opportunities can be generated by selling the property.” ** Presented to City Council for approval (City of San Diego, California, Council Policy)

14. Surplus Property 2 Common Elements: ●Property no longer necessary for agency’s purposes or use ●Requires determination by agency’s governing body to designate as surplus

15. How Property Becomes Surplus • Uneconomic Remnant • Downsized Projects • Vacated Buildings and Land • Tax Delinquencies • Donation • Abandoned Right-of-Way

16. Methods of Disposal • Internal transfer within the agency • Sale to other agency • Public sale (auction; sealed bid; etc.) • Direct sale to private entity/individual • Lease • Exchange SOLD!

17. Risks of Holding Onto Surplus Property • Public Discontent

18. “Along the way, Caltrans used eminent domain to buy thousands of homes and businesses it didn’t need, holding onto them for decades.”

19. Risks of Holding Onto Surplus Property • Public Discontent • Management Headaches • Quick Disposal Required

20. Risks of Disposing Of Surplus Property • Public Discontent

21. “Three men were arrested this morning in San Bernardino County in a $102 million bribery scheme. A fourth, former Supervisor Paul Biane, remains a fugitive from justice.”

22. Risks of Disposing Of Surplus Property • Public Discontent • Changed Circumstances • Required Procedures

23. Benefits of Disposing Of Surplus Property • Funds to use on other projects • Facilitate a deal with the owner of property to be acquired - - exchange • Urban renewal; Facilitate Development • Reduce headache of property management • Reduce cost of maintaining properties • Return property to the tax rolls

24. Adopting Surplus Property Regulations Where None Exist ●Streamlined Process For Disposition ●Uniformity & Efficiency in Agency Disposition ● Creating a Safe Harbor Against Charges of Corruption?

25. CONCLUSION