Chapter 3.55
SALE AND DISPOSAL OF REAL PROPERTY
Sections:
3.55.010 Policy and procedures for disposition of city-owned real property.
3.55.011 Surplus property declaration.
3.55.013 Exemptions from requirements of chapter.
3.55.010 Policy and procedures for disposition of city-owned real property.
A. Policy. The city council declares that it is in the public interest and the policy of the city to dispose of all real property interests in which the city holds a fee, leasehold, easement or license 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 sale of fee property. For purposes of this chapter, “reasonable return” means sale at an amount equal to, or greater than, the fair market value under SMC 3.55.012. 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.
B. Procedures. Real property declared surplus may be disposed of for a reasonable return by any of the procedures of this chapter unless: (1) the property is authorized for special disposition process by the city council; or (2) the property was originally acquired for public utility purposes, in which case it shall be sold for fair market value pursuant to RCW 35.94.040.
C. Special Disposition Process. In cases where the public interest in a reasonable return is outweighed by the public benefit, due to factors such as the unique character or development potential of a given property, the city council may designate such property for disposal by a request for proposals, sealed bid, options to purchase, lease-purchase transactions, or other commonly used, commercially reasonable means of disposal. If an intergovernmental transfer is considered for a special disposition process, this chapter shall be supplemented with procedures of Chapter 39.33 RCW. [Ord. 677 § 1, 2013; Ord. 626 § 1, 2012]
3.55.011 Surplus property declaration.
A. Real property owned by the city may be declared surplus by the city council after the following procedures have been completed:
1. The city manager shall include the following information in the staff report to council for each parcel under consideration:
a. Description of the subject parcel’s size, general location, and legal description;
b. Description of the circumstances under which the subject parcel was obtained;
c. Description of what funds were used to initially acquire the subject parcel;
d. Recommendation as to which fund the proceeds from its sale should be credited;
e. History of municipal use, if any, or uses for which it might be held;
f. Value of the subject parcel and whether further appraisal before sale is recommended and the type of appraisal required (see SMC 3.55.012(A)(2));
g. Whether the subject parcel is only usable by abutting owners or is marketable;
h. Whether special consideration ought to be given to some other public agency that has a use for the subject parcel;
i. Whether the subject parcel should be sold at auction, by sealed bid, by a licensed real estate broker, or by negotiation;
j. Recommendation as to whether any special covenants or restrictions should be imposed in conjunction with sale of the subject parcel;
k. For land acquired for public utility purposes, whether the land is no longer required to provide continued public utility service.
2. A public hearing shall be held to consider the surplus declaration for the subject parcel. Notice of said hearing shall be published in the city’s official newspaper and mailed to all property owners within 500 feet of the subject parcel not less than 10 days nor more than 25 days prior to the hearing.
B. Following the public hearing, the council shall determine whether the subject parcel shall be declared surplus. Any declaration of surplus property shall be made by resolution. The resolution shall also make the following determinations:
1. Whether the subject parcel should be sold by sealed bid, at auction, by a licensed real estate broker, or through negotiated sale;
2. Whether special covenants or restrictions should be imposed as a condition of the sale; and
3. The minimum acceptable price, in accordance with SMC 3.55.010(B) and 3.55.012. [Ord. 809 § 1, 2017; Ord. 626 § 1, 2012]
3.55.012 Sale procedure.
The following procedures and requirements shall apply to the sale of surplus property:
A. Determination of Value/Minimum Acceptable Price.
1. If the city has a sufficient and acceptable appraisal of the subject property, no additional appraisal shall be required.
2. If an acceptable appraisal is not available, the city manager shall obtain:
a. Limited opinion of value for properties under $25,000;
b. Short form appraisal report for properties under $50,000; or
c. Full narrative appraisal report.
B. Sale by Bid or Auction. In the event the subject parcel 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 subject parcel shall be conspicuously posted on the property no less than two weeks prior to the date set for the close of bids or the date set for the auction.
2. Notice shall be published in the city’s official newspaper at least once each week for three consecutive weeks preceding the deadline for the submittal of sealed bids or the public auction. All notices shall include a description of the subject parcel, the procedure by which the subject parcel is to be disposed of, any earnest money deposits which must be made and the minimum price that will be accepted.
C. Negotiated Sale. If the subject parcel 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 subject parcel may be negotiated for sale to the abutter, provided:
1. The abutter is willing to purchase for the fair market value of the subject parcel as determined under subsection A of this section;
2. If more than one qualifying abutter expresses interest in purchasing the subject parcel, the city council may solicit sealed bids from all; and
3. A person shall not be deemed to be an abutter if a right-of-way separates their property from the subject parcel unless purchase will allow a higher and better use of the abutter’s property.
D. Real Estate Broker Sale. In the event the subject parcel is to be disposed of by real estate broker sale, the following procedures shall be as follows:
1. The real estate broker shall be licensed in the state of Washington;
2. The property shall be listed for no less than the appraised fair market value or the price set by the council;
3. The property must be advertised on the open market for a minimum of two weeks by the use of newspapers, real estate multiple listing services, or other commercially reasonable methods; and
4. The broker’s commission rate will be no more than that otherwise charged in the Shoreline area for such services.
E. Earnest Money/Time to Closing.
1. Disposition by Sealed Bid or Auction. Where a subject parcel is sold by sealed bids or auction, any and all bids submitted must be accompanied by a bid deposit in the form of a cashier’s check payable to the city of Shoreline in the amount of five percent of the bid or $5,000, whichever is greater. Such deposit accompanying the successful bid shall be deposited into an administrative trust account until closing on the purchase of the parcel and payment of the remaining amount of the purchase price shall be made within 30 days. In the event the purchaser is unable to pay the remaining amount within the required time, the earnest money deposit shall become nonrefundable as liquidated damages; provided, however, that the purchaser may deposit an additional $5,000 extension fee, in which case the time to make full payment shall be extended for an additional 30 days. In the event full payment is not made by the conclusion of the additional period, all deposits shall be retained as liquidated damages for lost time and expense. The city council reserves the right to waive any irregularities in the bid process.
2. Disposition by Broker Sale or Negotiated Sale. Where property is sold by real estate broker sale or negotiated sale, the purchaser shall deposit earnest money into escrow in the amount of $5,000 or five percent, whichever is greater, within three business days of execution of a purchase and sale agreement for the purchase of the subject parcel. Earnest money forfeitures and sale extensions under subsection (E)(1) of this section shall apply.
F. Form of Conveyance. All conveyances shall be made by quitclaim deed.
G. Closing Costs. All closing costs, exclusive of deed preparation, shall be borne by the purchaser including, but not limited to, survey work, title insurance if desired, recording costs, and escrow fees if applicable. [Ord. 809 § 2, 2017; Ord. 626 § 1, 2012]
3.55.013 Exemptions from requirements of chapter.
The city manager may administratively approve the release of an easement or termination of a lease agreement upon determination by the city manager that the easement or lease is no longer needed for existing or future needs of the city. A memorandum detailing these findings shall be provided to the city council 30 days prior to release. [Ord. 677 § 2, 2013]