Chapter 2.94
POLICY AND PROCEDURES FOR DISPOSITION OF CITY-OWNED REAL PROPERTY

Sections:

2.94.010    Policy.

2.94.020    Procedures.

2.94.030    Special disposition process.

2.94.040    Sale procedure.

2.94.050    Sale to abutting owners.

2.94.060    Intergovernmental transfers.

2.94.070    Sale of real or personal property or equipment originally acquired for public utility purposes.

2.94.010 Policy.

The city council declares that it is in the public interest for real property held by the city to be returned to the tax rolls if it is not needed for some present or future municipal use and if it can be sold for a reasonable return. It is therefore the policy of the city to dispose of all real property in which the city holds a fee interest, where such property is surplus to its current or future needs, and where such disposition would afford the city a reasonable return from the transaction. For purposes of this chapter, “reasonable return” means sale for tangible and intangible consideration equal to, or greater than, the appraised fair market value (see BMC 2.94.040(A)). For purposes of this chapter, “surplus property” means both real property for which the city has no current or future need, as well as real property, which, if disposed of, would be put to a higher or better use for the community at large, which property has been determined to be surplus by the city council. (Ord. 2024 § 1, 2009).

2.94.020 Procedures.

Real property declared surplus may be disposed of for a reasonable return by any of the following means determined by the city manager (as further detailed in BMC 2.94.040):

A.    Sealed bid;

B.    Auction; or

C.    Negotiated sale. (Ord. 2024 § 1, 2009).

2.94.030 Special disposition process.

In cases where the public interest in a maximum financial or economic return is outweighed by the public benefit, due to factors such as (by way of illustration and not limitation) the unique character or development potential of a given property, the city manager may recommend for council approval the disposal of property by a special disposition process which may include disposal for less than the appraised fair market value or for other cognizable forms of consideration in addition to or in lieu of monetary payment to the city. The special disposition process may include (without limitation) sale by any of the methods set forth at BMC 2.94.020, options to purchase, lease purchase transactions, or other commonly used, commercially reasonable means of disposal. Approval for special disposition of property under this section shall include written findings of the council setting out and supporting the basis for the council’s decision that the public benefit of disposal pursuant to this section outweighs the public interest in a maximum financial or economic return. (Ord. 2024 § 1, 2009).

2.94.040 Sale procedure.

The following procedures and requirements shall apply to property sold as surplus by the city:

A.    Determination of Fair Market Value/Minimum Acceptable Price.

1.    The city manager may present to the council an appraisal of the surplus property and/or additional information regarding the approximate fair market value of the surplus property for purposes of determining a reasonable return if such property is sold.

2.    Whether surplus property is to be disposed of by sealed bid, auction or negotiated sale (excluding special disposition process), interested parties shall be advised that the minimum acceptable price shall be the fair market value determined by an appraisal and/or other information as presented by the city manager above plus reimbursement of 50 percent of the cost of obtaining said appraisal and/or other information.

B.    Processes/Bid Deposits/Time to Closing.

1.    Disposition by Sealed Bid. Where a surplus property is sold by sealed bids, the bidding procedures for a surplus property shall be established by the city manager before bids are sought, including qualifications for bidders. Such procedures shall contain the criteria on which the winning bid will be selected. Any and all bids submitted must be accompanied by a bid deposit in the form of a cashier check payable to the city finance director in an amount established by the city manager. Such deposit accompanying the successful bid shall be deposited into escrow until closing on the purchase of the surplus property and payment of the remaining amount of the purchase price shall be made within the time established as part of the bidding procedures for the surplus property. In the event the purchaser is unable to pay the remaining amount within the required time, the bid deposit shall become nonrefundable and may be retained by the city as liquidated damages and not as a penalty, since the calculation of actual damages due to time lost, transaction expenses and other factors will be difficult, if not impossible, to accurately calculate (such damages, as just defined, being referenced hereafter as “liquidated damages”). The bidding procedures may permit the purchaser, at its option, to deposit an extension fee in a stated amount (hereinafter “extension fee”), in which case his time to make full payment shall be extended as provided in the bidding procedures. In the event full payment is not made by the conclusion of the extension period, the extension fee may be retained by the city, along with the initial deposit, as liquidated damages. The city council reserves the right to waive, or delegate to the city manager the right to waive, any irregularities in the bid process. The city reserves the right to reject all of the bids if it determines that none of them are responsive to its request for bids or to withdraw a request for bids at any time before it accepts a bid.

2.    Disposition by Auction. Where property is sold at auction, the bidding procedures for a surplus property shall be established by the city manager before the auction, including any minimum or reserve price and qualifications for bidders. The prevailing bidder must immediately tender a cash deposit or certified check for deposit into escrow as earnest money to the city finance director in the amount established in the bidding procedures. Payment of the remaining amount of the purchase price shall be made within the time period required in the bidding procedures. In the event the purchaser is unable to pay the remaining amount within the required time, the bid deposit shall become nonrefundable and may be retained by the city as liquidated damages. The bidding procedures may permit that the purchaser may, at its option, deposit an extension fee in a stated amount, in which case the time to make full payment shall be extended as provided in the bidding procedures. In the event full payment is not made by the conclusion of the extension period, the extension fee may be retained by the city, along with the initial deposit, as liquidated damages. The city reserves the right to reject all of the bids if the minimum or reserve price is not met or to withdraw the surplus property from the auction process at any time before the auction commences.

3.    Disposition by Negotiated Sale. The city manager may directly negotiate with potential purchasers of surplus property or may publish a Request for Qualifications (“RFQ”) or a Request for Proposals (“RFP”) to identify potential purchasers. The city council reserves all rights to approve any purchase and sale agreement recommended by the city manager. Where property is sold by negotiated sale, said terms shall be controlled by the negotiated purchase and sale agreement.

C.    Notification of Sale of Surplus Property. In the event the surplus property is to be disposed of by sealed bid or by auction, the following notification procedures shall be followed:

1.    A notice of the city’s intent to dispose of the surplus property shall be conspicuously posted on the surplus property no less than two weeks prior to the date set to commence accepting bids or the date set for the auction.

2.    Notice shall be published in the city’s official newspaper no less than once each week in two consecutive weeks preceding acceptance of sealed bids or the public auction. All notices shall include a description of the surplus property, the procedure by which the surplus property is to be disposed of, any qualifications for bidders, any bid deposits that must be made and the minimum price that will be accepted.

D.    Failure to Close. In the event that the closing of the sale of surplus property fails to occur under the method selected by the city, or the city fails to conclude a binding purchase and sale agreement with a buyer selected by the city to negotiate with through a special disposition process, RFP, RFQ or other process, the city may terminate the transaction or negotiations and may start a new process (which may be a different process from that previously selected) and/or select the buyer deemed by the city to be the next most responsive in the prior process. (Ord. 2024 § 1, 2009).

2.94.050 Sale to abutting owners.

If the surplus property can only be put to its highest and best use when aggregated with an abutter’s property because of its size, shape, topography, or other restriction, the surplus property may be negotiated for sale to the abutter, provided:

A.    The abutter is willing to purchase for the appraised fair market value of the surplus property;

B.    If more than one qualifying abutter expresses interest in purchasing the surplus property, the city council may solicit sealed bids from all; and

C.    A person shall not be deemed to be an abutter if a right-of-way separates his property from the surplus property unless the city has agreed to vacate the right-of-way in question or the purchase will allow a higher and better use of the abutter’s property not otherwise permitted. (Ord. 2024 § 1, 2009).

2.94.060 Intergovernmental transfers.

Intergovernmental transfers of real property shall be made in accordance with Chapter 39.33 RCW, RCW 43.09.210 and/or any other applicable statutes, rather than the provisions of this chapter. (Ord. 2024 § 1, 2009).

2.94.070 Sale of real or personal property or equipment originally acquired for public utility purposes.

Whenever the city shall determine, by council resolution, that any lands, property or equipment originally acquired for public utility purposes is surplus to the city’s needs and is not required for providing continued public utility service, then the council by resolution and after a public hearing may cause such lands, property or equipment to be sold. Such resolution shall state the fair market value and such other terms and conditions for such disposition as the council deems to be in the best public interest (RCW 35.94.040). (Ord. 2024 § 1, 2009).