HomeMy WebLinkAbout3055 Disposition of Surplus PropertyOrdinance 3055
Amending PTMC 3.44
Page 1 of 2
Ordinance No. 3055
AN ORDINANCE OF THE CITY OF PORT TOWNSEND AMENDING
CHAPTER 3.44 OF THE PORT TOWNSEND MUNICIPAL CODE REGARDING
DISPOSITION OF SURPLUS PROPERTY, AND ADDING CONSIDERATION
OF DISPOSITION OF PROPERTY FOR AFFORDABLE HOUSING
WHEREAS, the lack of affordable housing for very low-income, low-income, or
moderate-income households and special needs populations is intensified by the rising
cost of land and construction; and
WHEREAS, there are publicly owned land and buildings which may be suitable
to be marketed, sold, leased, or exchanged for the development of affordable housing;
and
WHEREAS, pursuant to RCW 35.21.687, the City is mandated to identify and
catalog real property owned by the city that is no longer required for its purposes and is
suitable for the development of affordable housing for very low-income, low-income, and
moderate-income households as defined in RCW 43.63A.5]0; and
WHEREAS, Comprehensive Plan Housing Policy 2.4 states: "Develop and
maintain an inventory of surplus public lands that may be suitable to nonprofit housing
providers for affordable housing. Consider affordable housing needs and opportunities
associated with inventoried surplus public lands before disposing of them"; and
WHEREAS, the City has adopted a Housing Action Plan (2006) that includes
over 40 strategies to address the growing need for affordable housing stock including
Action 36 which states in part: "inventory and evaluate supply of public and private
buildable lands - able to be developed for a variety of mixed income innovative
residential projects throughout the urban centers of the city and county"; and
WHEREAS, the City of Port Townsend recently created a Public Development
Authority (PDA) whose purpose includes preservation and expansion of affordable
housing stock.
WHEREAS, City Council is authorized to convey real property for less than
market value under limited conditions, including: intergovernmental transfers (RCW
39.33.010); transfer to qualified public or private non profit for development of housing
available to households at or below 80% of Area Median Income (AMI) (Washington
State Constitution Article VIII, Section 7) and transfer to a Public Development
Authority (RCW 35.21.30 through 35.21.755).
NOW, THEREFORE, the City Council of the City of Port Townsend ordains as
follows:
Ordinance 3055
Amending PTMC 3.44
Page Z of 2
SECTION 1. Amendments to Chapter 3.44 Disposition of Surplus Property.
Chapter 3.44 is hereby amended to read as follows (strike is deleted and underline is
added):
See Exhibit A attached hereto and incorporated by reference.
SECTION 2. Severability. If any provision of this ordinance or its application to any
person or circumstance is held invalid, the remainder of the ordinance, or the application of
the provision to other persons or circumstances, is not affected.
This ordinance shall take effect and be in force five days after the date of its publication in
the manner provided bylaw.
Adopted by the City Council of the City of Port Townsend, Washington, at a regulaz meeting
thereof, held this 7th day of March 2011.
~~ Y~)re-tcL~~ -w- v~'Y',il ,,'
Michelle Sandoval, Mayor
Attest: Approved as to Form:
~'~
''"" ~=..
Pamela Kolacy, MMC~~`~ John P Watts, City Attorney
City Clerk
Exhibit A to Ordinance 3055
Ame»dang PTMC 3.44
Page 1 of 8
EXHIBIT A
Chapter 3.44
DISPOSITION OF SURPLUS PROPERTY; LONG-TERDI LEASES
Sections:
3.44.01.0 Purpose -Decision-making process.
3.44.020 Definitions.
3_44_ .030 Policies for determining that property is surplus or should be designated for
affordable housing purposes.
3.44.040 Procedures for determining that property is surplus -Real and utility property.
3.44.050 Process for disposition of surplus property; special disposition.
3.44.010 Purpose -Decision-making process.
The city of Port Townsend owns and operates real and personal property needed for the
effective provision and management of municipal services, including but not limited to
parks, recreation and utility services. The city council recognizes that unlike private
enterprises, the city owns and manages public property for many purposes, including
many activities which do not produce revenues or profits for the city. It is the policy of
the city of Port Townsend to provide the best possible stewardship and management of
municipal assets in the best interests of the citizens of Port Townsend and for the
enhancement and protection of the natural and built environment.
Furthermore the City Council recognizes and supports the public benefits derived from
the provision of affordable housing. Affordable housing needs and opportunities shall be
considered before surplusingpublic lands, and consideration shall be given to d1SpOSinQ
property for affordable housing needs or retainingproperties in order to meet affordable
housing needs Pursuant to RCW 35.21.687, it is the City's intent to identify and catalog
real property owned by the city that is no lop eg r re uq fired for its pumoses and is or may
be suitable for the development of affordable housin fg or very low-income, low-income,
and moderate-income households as defined in RCW 43.63A.510 The identification and
cataloging of such properties would be considered a preliminary identification and
cataloging pending completion of the processes outlined in this Chapter
A. City Council Decisions. The city council shall make all decisions that real property is
surplus to the city's needs in accordance with Chapters 35.94 and 39.33 RCW, or
whether property should be desianated to meet affordable housing needs and surplused or
retained for that purpose. im~Decisions should be based upon established criteria, and
only after seeking public review and comment regarding all proposed determinations that
property which is subject to this chapter is surplus to city needs or whether r~opertX
should be designated to meet affordable housing needs and surplused or retained for that
purpose. This chapter requires that, with the exception of leases of city-owned real
property of less than one year (including property management agreements), the city
council shall hold a public hearing prior to disposing of real property or designating that
the property may meet affordable housing needs and be surplused or retained for that
pu ose.
Exh{bitA to Ordinance 3055
Amending PTMC 3.44
Page 1 of 8
B. City Manager Decisions. The city manager shall be authorized to make all decisions
that personal property is surplus to the city's needs, based upon the criteria established in
this chapter. Items which cannot be used or re-assigned to another department shall be
recommended to the city manager for disposal in accordance with this chapter. If the
surplus personal property exceeds $~A0910,000 in value or the personal property was
acquired by the city for utility purposes, the city manager shall hold an administrative
hearing prior to disposal pursuant to RCW 39.33.020 and this chapter. The city manager
shall be authorized to make decisions to lease real property and to negotiate property
management agreements for lease terms not to exceed one year, without holding an
administrative hearing. (Ord. 2741 § 2, 2000; Ord. 2682 § 1, 1999).
3.44.020 Definitions.
A. "Commercially reasonable sale" means a sale or other conveyance that is an "arms
length" arrangement, for the fair market value of the property. A commercially
reasonable sale or conveyance maybe by auction, private sale, trade-in as a component of
replacement of obsolete property for new property, sealed bids, or by broker or agent
listing. City employees and elected officials shall be prohibited from purchasing or
otherwise acquiring any interest in any city surplus property.
B. "Disposition" means the lease or sale of property or other disposition as defined in this
chapter.
C. "Housing affordable," "Housing, very low-income", Housing, low-income" and
Housing moderate-income" as used in this chapter, shall be as defined in RCW
43.63A.510 as stated herein, or as hereafter amended by the state legislature:
(a) "Affordable housing" means residential housing that is rented or owned by a
person who qualifies as a very low-income, low-income, or moderate-income household
or who is from a special needs population, and whose monthly housing costs, including
utilities other than telephone, do not exceed thirty percent of the household's monthly
income.
fb) "Very low-income household" means a single person, family, or unrelated persons
living together whose income is at or below fifty percent of the median income, adjusted
for household size, for the county where the affordable housing is located.
(c) "Low-income household" means a single person, family, or unrelated persons
living together whose income is more than fifty percent but is at or below eighty percent
of the median income where the affordable housine is located.
(d) "Moderate-income household" means a sin lg_e person, family, or unrelated persons
living together whose income is more than eighty percent but is at or below one hundred
fifteen percent of the median income where the affordable housing is located.
ExhibitA to Ordinance 3055
Amending PTMC 3.A4
Page 3 of 8
D. "Non-profit corporation qualified" as used in this chapter means private or public
corporations duly organized according to the laws of the state of Washington, which non-
profit comorations are exempt from taxation under USC 501 & (c) as amended, and which
have a proven ability to provide affordable housing or can otherwise show an ability to
do so and meet obligations that maybe imposed in a conveyance of property to meet
affordable housing needs.
E. "Property" as defined by this chapter means all real property (real estate) owned in fee
simple title by the city of Port Townsend, located both within the city's incorporated
municipal boundaries and outside city limits. "Property" shall also mean all personal
property (non-real estate) with an estimated value in excess of $3;00910,000 and all real
and personal property originally acquired for public utility purposes. "Property" shall not
include public streets, alleys and rights-of--way which are subject to vacation and
disposition in accordance with Chapter 12.20 PTMC. "Property" shall not include any
equity interest in real or personal property held or owned by the city except for real estate
security interests taken or released to secure the installation of development
improvements. (Ord. 2741 § 2, 2000; Ord. 2682 § 1, 1999).
3.44.030 Policies for deternuning that property is surplus or should be designated
for affordable housing purposes.
A. Real Property. The city council shall review, every three years, or other regular basis,
the city ownership of real property. The intent of this review shall be to ensure the
optimum utilization of the capital assets of the city of Port Townsend. All determinations
by the city council in accordance with this chapter shall be within the discretion of the
city council, acting within its legislative, proprietary authority as provided in Chapter
35A.11 RCW. With the exception of leases not to exceed one year, and the negotiation of
property management agreements, determinations that real property is surplus to city
needs or whether property should be designated to meet affordable housing needs and
sumplused or retained for that purpose shall be made after holding a duly noticed public
hearing, and shall be based, at a minimum, upon the city council's consideration of the
following criteria:
1. Rea] property should perform a valuable public function. In making this
determination, the council should consider both current use and any foreseeable
future use. Property may serve a valuable public Function if the property provides
both tangible and intangible returns to the city, including but not limited to
preservation of sensitive natural habitat, stormwater or flood management and
control, current or future utility-related needs, passive or active open space and
recreation enjoyment, implementation of comprehensive plan goals and policies,
future investment potential.
2. If the property is determined to serve a valuable public function, the city council
should determine if this function could be served more effectively, and/or more
appropriately, by another property in current city ownership.
Exhibit ~ to Ordinance 3055
Amending PTMC 3.44
Page 4 of 8
3. If the property is determined not to serve a valuable public function, the city
council should determine if a potential future use, or other compelling reason exists to
retain this property, based upon the following nonexclusive criteria:
a. The council should determine if the property has been identified in the Port
Townsend Comprehensive Plan or any functional or subarea plans, as having
potential future value to the city;
b. The council should request that the city manager and/or department heads review
and identify whether there are any previously unidentified potential future uses of
the property;
c. The council should determine whether there are contractual or other restraints on
the title to the property which would limit or preclude sale. If such restraints exist,
upon consultation with the city attorney, the council should determine the difficulty
in removing such restraints;
d. The council should determine whether the net future value of the property, based
upon current appreciation, is greater than what would be reasonably expected
through fund returns;
e. The council should determine whether the return on investment would be greater
through management of the property, and/or property development for city use,
rather than through sale; and
f. The council should determine all tax consequences of the decision to retain the
property versus a decision to declare the property to be surplus and dispose of the
property.
4. The City Council should determine if the property be suitable for affordable
housing, and if so, whether it should be designated to meet affordable housing needs.
Suitable for affordable housing means the property is located within the City's Urban
Growth Area (IJGA) is generally suitable for development, and housing development is
comuatible with the neighborhood.
If the property maybe suitable for affordable housing the City Council shall hold a
hearing on whether the property should be designated to meet affordable housing needs
and surplused or retained for that purpose, or whether the property should be retained for
some other public pumose or surplused without making_provision for affordable
housing If the property is designated to meet affordable housing needs, then the City
would follow the disposition process in PTMC 3.44.050.
B. Personal Property -Interdepartmental Transfers. If a department head or authorized
city representative has city personal property under his or her control or supervision
which is deemed surplus to the department's use, the employee shall notify the city
Exhibit A to Osdinance 3055
Amending PT~L7C 3.44
Page 5 of 8
manager, who shall in turn notify interested department heads, supervisors or other city
representatives, and give them an opportunity to review their need for the property. If any
of such persons desire to acquire and use the proposed surplus property for their
department, unless the manager disagrees, the property may be transferred to the
requesting department head, or other authorized representative, for use by that
department, for city business. Personal property originally acquired with utility funds
may be transferred to and used by anon-utility department if the property is of de
minimis monetary value. If no request for use of proposed surplus property is received,
the city manager shall consider whether to declare the property surplus to the city's needs
under the criteria stated in this section. Upon finding that the property is surplus to the
city's needs, the city manager may then proceed to direct the disposal of the same by a
commercially reasonable sale.
C. Personal Property- Criteria for Declaring Surplus. Upon recommendation of the
department head, and after determining that there is no need for the use of the property by
another department, the city manager shall hold a duly noticed administrative hearing, as
required by this chapter. The city manager may declare property surplus based upon one
or more of the following criteria:
1. The city has or soon will have no practical, efficient, or appropriate use for the
property, nor will it have such a use for the property in the near future;
2. The purpose served by the property can be accomplished by use of a better, less
costly, or more efficient alternative;
3. The purpose served by the property or its use no longer exists as determined by a
change of policy evidenced by an ordinance or resolution of the city council;
4. The property is damaged, worn out, or otherwise inoperable and the cost of
repairing the same is unwise or impractical.
D. Personal Property -Public Utility Property. In addition to the general criteria for
finding that personal property is surplus to the city's needs, upon the recommendation of
the public works director or designee, and after conclusion of a duly noticed
administrative hearing, the city manager shall consider whether personal property owned
by the city and originally acquired for utility purposes is obsolete or not required for
providing continued utility service. (Ord. 2741 § 2, 2000; Ord. 2682 § 1, 1949).
3.44.040 Procedures for determining that property is surplus -Real and utility
property.
A11 final determinations of the city to declare real property, real and personal property
acquired for utility purposes, and personal property with an estimated value in excess of
$10,0003990 as surplus to the city's needs, or whether real property should be
designated to meet affordable housing needs and surplused or retained for that purpose,
and whether the sale of surplus property shall be undertaken, are made only after
conclusion of the public process as provided in this section; provided, however, this
Exhibit A to Ordinance 3055
Amending PTMC 3.44
Page 6 of 8
chapter shall not be construed as limiting the authority of the city council to conduct
executive sessions as authorized by Washington law:
A. Prior to making any final determinations that property owned by the city is surplus to
the city's needs, or whether real property should be designated to meet affordable
housing needs and sur~lused or retained for that purpose, and prior to negotiating any
conveyance, the city shall hold a public hearing. The public hearing shall beheld prior to
undertaking any brokerage or real estate agent listing arrangements. The city manager is
authorized to hold administrative hearings;
B. At least 10 days and not more than 25 days before the hearing, the city shall publish a
public notice in display advertising form, setting forth the date, time and place of the
public hearing, published at least once, in the official newspaper. Notice should also be
mailed to the Peninsula Housing Authority and other housingproviders serving the
community. The city shall also circulate a news release;
C. The public hearing notices shall identify the property by an easily understood
description (i.e., not exclusively by metes and bounds legal description), and shall
describe any proposed use of the land involved, if any is contemplated;
D. After the public hearing, if the city council determines that the property is surplus to
the city's needs, the city council or city manager shall adopt a resolution (or
administrative decision) making findings that the property is surplus to the city's needs,
and finding conformity with the adopted policies of the city which govern disposition of
surplus property. The resolution or administrative decision shall state the estimated fair
market value of the property. ~xr ,, ' .. ~~..~.. «i."""'~'.,':~-' °'^"„ "`"`" ""' " "o''
value; and
E. The resolution or administrative decision should state the terms and conditions for the
actual disposition of the property which the council finds to be in the best public interest.
With real property the resolution shall state the property shall not be sold for less that the
property's appraised value; provided, the City Council ma~pprove an exchange of
property without an appraisal based on a determination that the value of property
received will be of equal or greater value than the nropertv being_SUrplused, and may
approve a sale without an appraisal if it determines an appraisal is not necessary because
there is other reliable indication of value (for example, assessed value, or other market
transactions) The "value received" in a property exchange may include intangible values
or benefits received by the city through implementation of comprehensive plan goals and
policies (including goals and policies of the city's "functional" and "subarea" plansl and
provision of other public health, safety and welfare benefits to the city. (Ord. 2741 § 2,
2000; Ord. 2682 § 1, 1999).
3.44.050 Process for disposition of surplus property.
Exhibit A to Ordinance 3055
Amending PTMC 3.44
Page 7 of 8
ACommercially Reasonable Sale or Conveyance. Unless otherwise excepted in Section
B tThe actual sale or other conveyance of property shall be commercially reasonable.
Real property will require an independent appraisal (except as provided in PTMC
3 44 040(F) and PTMC 3.44.050.
B Special Disposition If the Council finds following a hearing that property should be
designated to meet affordable housing needs and surplused or retained for that
pumose Council may direct the City Manager to proceed with special disposition
(which may include disposition at less than market or appraised value and without
appraisal under any one of the following conditionsL
1 Intergovernmental transfers (see PTMC 3.44.050(C);
2. Transfer to qualified public or private nonprofit entities.
3. Transfer to the Port Townsend Public Development Authority or other
public development authority created to develop or manage affordable
housin .
Conveyance by~ecial disposition may include (without limitation) sale, lease,
options to purchase lease purchase transactions orpublic-private partnership and
may occur by use of negotiations or bidding, as the Council deems desirable, fair
and appropriate. Council may direct publishing_or other distribution of a request
for proposal (`BFP") and/or request for qualifications ("RFQ"). Following
review and recommendation by the City Manager concerning a proposed special
disposition, the Council r'^°"''°''' ° ~•'~'~°''°~~ en the~repesal, and shall
determine whether the proposed special disposition shouldall be approved, not
droved or approved with conditions Council reserves the right to reiect any
and all proposals. If a disposition for affordable housing is not approved, Council
may determine whether to request other proposals or solicitations, retain the
property for affordable housine in order to consider a disposition in the future, or
following a hearing) determine to designate the property for another public use
(other than affordable housing) and/or to surplus the property_
CB. Lease of Public Property. The city may authorize the lease or sublease of any
property, including real property, under such terms and conditions as the city may deem
desirable, fair and appropriate, either by use of negotiations or bidding in the best interest
of the city. Generally, leases of real property shall not be granted for a period of more
than five years, although leases of longer terms maybe appropriate. Leases of real
property maybe granted for a period of more than five years when appraisal or economic
data demonstrate a sufficient assurance that the city will receive fair market rental value,
including through monetary payment and in-kind services, and the lease arrangement will
allow rental adjustments in the future as market conditions change.
DE. Intergovernmental Transfers of Property. For all intergovernmental transfers of
property, the council shall make its determination that the property is surplus to the city's
Exhibit A to Ordinance 3055
Amending PTMC 3.44
Page 8 of 8
needs in accordance with this chapter, and all transfers shall be made pursuant to Chapter
39.44 RCW, or such other state statute as maybe applicable. With all intergovernmental
transfers of property, the city council shall consider conveying the property subject to a
restrictive covenant which describes the allowed intended use of the property and
prohibits the acquiring municipality from conveying the property to nongovernmental
parties or entities.
EB. Utility Property. In the event property declared surplus was originally acquired fox
public utility purposes, the revenues must be used for utility-related purposes, related to
the utility which funded the original purchase, or in the event there shall remain no such
utility, said funds shall be otherwise distributed as allowed by state law. All revenues
from the sale of utility property shall be deposited in the appropriate utility account or
fund. Proceeds from the sale of capital property shall be used for capital purposes.
FE. Disposition ofProceeds - Nonutility Property. Proceeds from the sale of nonutility
property shall be deposited and appropriated as determined by the city council. Proceeds
from the sale of capital property shall be used for capital purposes.
GE. Restrictive Covenants. Prior to disposing of real property, the city council shall
consider the need to impose restrictive covenants for the purpose of protecting important
public interests, including, but not limited to provision of affordable housing, to
preservation and protection of environmentally sensitive areas identified on properties,
stormwater control, open space protection, shoreline development use, and other
restrictions controlling land use to implement city policy or to ensure that the property is
used and developed in a manner which is compatible with neighborhood character.
HEfi. Release and Hold Harmless Agreement. Prior to disposing of any personal property,
the city shall require the transferee to execute an acknowledgment of risks, release and
waiver and hold harmless agreement, including a provision that the property is accepted
"as is," without express or implied warranties as to merchantability or fitness for any
particular purpose. This agreement shall be made on a form approved by the city
attorney. (Ord. 2741 § 2, 2000; Ord. 2682 § 1, 1999).
3.44.060. Exceptions.
This Chapter does not apply where other cit~~rovisions apply, or provisions of the
Revised Code of Washington (RCW) impose special conditions for the disposition of
municipal property_ Exceptions include, but are not limited to, the following:
Disposition of public art, disposition of library material, equipment rentals, and
disposition of abandoned or junk vehicles.