OFFICE OF MANAGEMENT AND ENTERPRISES SERVICES (OMES) PROCESS TO DISPOSE OF STATE OWNED REAL PROPERTY MELISSA MILBURN NOVEMBER 12, 2014

PUBLIC BUILDINGS AND PUBLIC WORKS 61 OS § 327 PROCEDURES FOR STATE AGENCY TRANSACTIONS TO LEASE, ACQUIRE, DISPOSE OF, OR TRANSFER REAL PROPERTY All agencies must follow the requirements of 61 OS § 327 unless they have specific statutory authority. State agencies must request OMES to dispose of real property upon:  Legislative authorization or a determination in writing by the OMES or the state agency that a parcel of real property subject to its jurisdiction is no longer needed.

METHODS OF DISPOSAL  Sealed Bid Auction  Request for Proposal  Liquidation  Interlocal Agreement

SEALED BID 61 OS § 327 Statutory Requirements  Appraise the property  Proper Notice  Public Opening  3 weeks after the last notice  OMES will not accept a bid less than 90% of appraised present fair value  Property sold to the highest bidder

REQUEST FOR PROPOSALS (RFP) 61 OS § Proposals may be requested for sale or lease and redevelopment. This method may be chosen by OMES when the revenue generated from the sale is not the primary consideration and it is determined to be in the best interest of the state.  Property must meet one of the following criteria:  Listed on National Register of Historic Places;  Designated by Oklahoma Historical Society as a property of historic interest;  Located within the Oklahoma State Capitol Complex, or  Located on a campus owned by the state.  Proposals shall be evaluated by a committee selected by the Director of OMES which shall include at least one member of the LRCPC.  The evaluation of the proposals shall be based on the principal criteria of:  Benefits to the state and community;  Advancement of long term capital asset plan;  Qualifications and experience of the redeveloper;  Financial ability of the redeveloper; and  Treatment of historic aspects, when applicable.

Liquidation 61 OS §327, 74 OS §61.8 If the property has been offered twice through public auction, and no viable offers were received, OMES may make recommendations to the Long Range Capital Planning Commission (LRCPC) for liquidation of underutilized properties if the property meets one or more of the following criteria:  environmental issues  creates a liability for the state, or  creates expenses that make the continued ownership of the underutilized property undesirable If the LRCPC approves the liquidation of the property, OMES may accept a bid of less than 90% of the appraised value.

INTERLOCAL AGREEMENTS 74 OS § 1008; 74 OS §61.8 Gives Oklahoma State Government the authority to contract with other public entities. To be considered for disposal through an Interlocal Agreement OMES requires that the property meet the following criteria:  Demonstrated savings or cost avoidance.  Property directly supports the infrastructure.  Must have more benefit to the citizens than private sale.  Public agency receiving property must demonstrate need, available funding for utilization, and viable plans for use.  Property is appropriate for taking through eminent domain.  Environmental issues where public ownership better protects the citizens of Oklahoma.  We ask the public agency pay the fair market value for the purchase of the property and all associated costs with the sale.  All transfers or disposals of property must be approved by the Long Range Capital Planning Commission.

AGENCY’S ROLE 61 OS §327  Continue to maintain, provide utilities, and continue to insure the property until the property is sold.  Provide property data and access.  Pay for any upfront costs:  The agency is reimbursed for the cost of the appraisal.  The agency may be reimbursed for other necessary expenses.

BONDED PROPERTIES Cannot sell a building with a bond against it unless the bond is defeased. Bonds can be defeased by paying full balance due. Most bonds are not “callable” for ten years after the issue date. This can vary from case to case because it is part of the bond language. Bonds lose their tax exempt status if over 10% of the total space or 10% of the total revenue generated from rent is from the private entity. (Tax-Exempt Governmental Bonds Compliance Guide- IRS)

REAL PROPERTY TRANSFERS AND SALE PROCEEDS 74 OS § 61.8; 62 OS § 908  No state agency, board, commission or public trust having the state as its beneficiary shall transfer any real property owned by the agency, board, commission or trust to any other state agency, board, commission state beneficiary trust or any public or private entity unless the transfer is first approved by the Long-Range Capital Planning Commission.  Any transfer made without the prior approval of the LRCPC as required may be reversed.  LRCPC will not approved any transfer unless proceeds from the sale shall be deposited within the Maintenance of State Buildings Revolving Fund.  All monies received from the sale or disposal of the property, except those monies necessary to pay the expenses incurred shall be deposited in the Maintenance of State Buildings Revolving Fund unless otherwise provided by law.