Agenda Item 18

March 20, 2012

Public Hearing

MEMORANDUM

TO:

FROM:

SUBJECT:

County Council

~~iChael

Faden, Senior Legislative Attorney

Public Hearing:

Expedited Bill 11-12, County Property - Disposition

Expedited Bill 11-12, County Property - Disposition, sponsored by Councilmembers

Leventhal and EIrich, Council President Berliner, and Councilmembers Andrews, Riemer, and

Navarro, was introduced on March 13, 2012. A Government Operations and Fiscal Policy

Committee worksession is tentatively scheduled for March 26 at 2:30 p.m.

Summary of Bill

Bill 11.;12 would modifY the procedures for disposition of County property and require

the County Council to approve disposition of certain County properties. As defmed in this Bill,

"disposition" of property which the County owns or controls

l

includes any sale, lease or license

for a term of at least 3 years, or lease or other document which includes an option to bui.

Specifically, Bill 11-12 would modifY County Code

§

IIB-45 by:

• tightening up the current property disposition process (which includes an opportunity

for Council comments but not approval) so as to preclude the broad exemptions found

in current County regulations (see COMCOR §11B.45.01.02A-D, shown on ©14).3

This would be done by only allowing property "of nominal value" to be exempted

from the current process

4 •

The current regulations exempt, among other categories,

"parcels at the County Life Sciences Center" and "matters of significant or strategic

interest to the County's economic development", which are not further defined;

• requiring Council approval before any disposition of County propertl becomes

fina1.

6

Council approval would take the form of a resolution, adopted after the

Council holds a public hearing with at least 15 days advance notice.

'''Property which the County "controls" would include property leased or licensed to the County government, as

well as any property deeded to the County.

2See ©2, lines 6-8

3See amended subsection (a) on ©2, lines 3-19.

4See ©2, lines 4-6.

5

With certain minor exceptions; see ©2, lines 21-22.

6

See new subsection (b) on ©2, lines 20-27.



The Council would also approve the material terms of each property disposition,

particularly the price or rent to be paid and any associated economic incentives

7 •

The purpose of

this requirement is to avoid a situation where an Executive gains approval to dispose of a

property and then modifies the terms of disposition in a way that (in the Council's or the public's

view) might not be in the County's best interest. The Council's ability to approve the terms, as

well as the disposition itself, is the crux of the disagreement (discussed further below) between

Council legal staff and the County Attorney regarding this Bill.

State lawS requires the County to advertise the sale or other disposition of "any property

belonging to the county or any agency thereof ... upon such terms and compensation as said

county may deem proper" for 3 weeks in a newspaper circulated in the county "and giving

opportunity for objections thereto." Council staff does not read this requirement as precluding

the County from enacting a law providing for other public notice and opportunities to comment

before the disposition is finalized. State law does not otherwise regulate the procedures for

disposing of County property.

Council staff transmitted an information request (see ©25) to Executive staff, seeking

data on recent property transfers. We expect to receive this information in time for the

Committee worksession scheduled for March 26.

Summary of Legal Issues

The County Attorney, in reviewing a previous (essentially identical) draft of this Bill,

concluded that under the County Charter's division of legislative and Executive authority, the

Council could reserve to itself the power to approve the sale or other disposition of County

property, but not the terms on which that property would be sold or disposed of. See Hansen

email on ©5. Council legal staff disagrees.

The constitutional doctrine of separation of powers is generally not applicable to local

government.

9

Rather, Maryland courts look to the county charter and local law to identify

governmental functions as legislative or executive at the local level.

In the case of

Prince George's County

v.

Silverman

(see opinion, ©6-13), the Court of

Special Appeals confirmed that the Council can enact a law that requires Council approval

before the County can sell or dispose of any County property. The Court affirmed a Circuit

Court holding that the Prince George's County law requiring Council approval of the

Executive's declaration that a property is surplus is "a

necessary and proper exercise of

legislative checks and balances on the executive determination to dispose of County

property.

To hold otherwise could result in the County Executive's declaration that all the

county-owned property is surpIUS."lO The Court explained that "the procedure for disposing of

.­

7See ©2, lines 26-27.

8Maryland Code, Article 25A §5(B).

9County Council o/Montgomery County

v.

Investors Funding Corporation,

270 Md. 403.

IOSee 58 Md. App. at 53-54.

2



surplus property .. .is designed to insure fairness and to prevent arbitrary and discriminatory

dispositions."

The Court in

Silverman

went on to say:

"It

is important to note that the [Prince George's]

code requires council approval only of the County Executive's determination that the property is

surplus; not approval of the prospective grantee." Bill 11-12 conforms to this judicial guideline;

it

would authorize the Council to approve the material terms of any sale or lease (including the

price or rent to be paid and any associated economic incentives), but

not

the identity of the buyer

or lessee. In other words, if the Council approves a sale to one party on certain terms, it could

not then disapprove the sale of the same property on the same terms to any other party.

To respond to the heart of the County Attorney's argument, the Council would not have a

governing interest in the identity of the prospective grantee, but the Council clearly does have a

fiscal interest in the amount of the proceeds. A below-market sale is effectively a transfer,

akin to an expenditure, of County resources, and the Council has the same interest in that kind of

transaction as it has for any expenditure. Just as any Executive's authority to buy property for

the County is always subject to appropriation, the Executive's authority to sell property would be

subject to the Council's fiscal authority under the Charter. Otherwise, as the Court in

Silverman

implied, the Executive could effectively give away County property without receiving full value.

This packet contains:

Expedited Bill 11-12

Legislative Request Report

County Attorney email

Prince George's County

v.

Silverman

­

CSA opinion

Current County property disposition regulation

Information request to Executive staff

Circle

#

1

4

5

6

14

25

F:\LAW\BILLS\1211 County Property\PH Memo.Doc

3



Expedited Bill No.

..!..!....-!..=._ _ _ __

Concerning:

County

Property

Disposition

Draft NO.4

Revised:

3~9-12

Introduced:

March 13. 2012

Expires:

September 13, 2013

Enacted: _ _ _ _ _ _ _ _ __

Executive: _ _ _ _ _ _ _ __

Effective: _ _ _ _ _ _ _ _ __

Sunset Date:

-!..:.No~n~e:..._

_ _ _ _ __

Ch. _ _, Laws of Mont. Co. _ __

COUNTY COUNCIL

FOR MONTGOMERY COUNTY, MARYLAND

By: Councilmembers Leventhal and Eirich, Council President Berliner,

and Councilmembers Andrews, Riemer, and Navarro

AN EXPEDITED ACT

to:

(1)

modify the procedures to dispose of County property;

(2)

require the County Council to approve certain dispositions of certain County

properties; and

(3)

generally amend the County law regarding disposition of County property.

By amending

Montgomery County Code

Chapter 11B, Contracts and Procurement

Section 11 B-45

Boldface

Underlining

[Single boldface brackets]

Double underlining

[[Double boldface bracketsn

* * *

Heading or defined term.

Added to existing law by original bill.

Deletedfrom existing law by original bill.

Added by amendment.

Deletedfrom existing law or the bill by amendment.

Existing law unaffected by bill.

The County Council for Montgomery County, Maryland approves the following Act:



EXPEDITED BILL

No.

11-12

1

Sec.

1.

Section

I1B-45

is amended as follows:

2

3

4

5

6

7

IlB-45.

(a)

Disposition of real property.

The County Executive must adopt regulations to establish a process for

the disposition of any real property owned or controlled

Qy

the County,

other than surplus school facilities and [other] property of nominal value

identified in the regulation. As used in this Section, "disposition" means

~

sale,

~

lease or license for

~

term of

J.

years or longer, or

~

lease or

8

other document which includes an option to buy. The regulations must

provide for:

(1)

coordination among public agencies, including any [municipal

corporation] municipality in which the real property is located;

(2)

(3)

opportunity to reserve property for alternative public use;

comparative analysis of reuse proposals before any disposition

actions; and

(4)

public notice and hearing on possible dispositions before final

decision on disposition, except that the County Executive may

waive the public hearing requirement for any real property that:

(A) has nominal value; or

(B) is recommended to be reused by the County government

(hl

Before the disposition of any real property owned or

c~:mtrolled

Qy

the

9

10

11

12

13

14

15

16

17

18

19

20

21

County (other than

~

property which has either nominal value or an

22

23

24

25

appraised value lower than $100,000) becomes final, the County

Council,

Qy

resolution adopted after the Council holds

with at least 15 days advance notice, must approve:

~

public hearing

26

27

ill

ill

the disposition; and

all material terms of the disposition, including the price or rent to

be paid and any associated economic incentives.

f:\law\bills\1211 countyproperty\1211 bill4.doc



EXPEDITED BILL

No.

11-12

28

[(b)]

W

*

*

*

29

30

31

32

33

34

35

36

37

38

39

40

[(c)]

@

The Executive must adopt regulations to establish a process for

disposition of surplus schools. As used in this Section, "surplus school"

means any building used at any time as a public school and later

conveyed to the County and all or part of the land which constitutes the

school site[, and "disposition" means a sale or a lease with an option to

buy]. The regulations must provide for:

*

[(d)]

W

*

*

*

*

*

Sec. 2. Expedited Effective Date.

The Council declares that this legislation is necessary for the immediate

protection of the public interest. This Act takes effect on the date when it becomes

law.

Approved:

41

42

Roger Berliner, President, County Council

43

Approved:

Date

44

Isiah Leggett, County Executive

45

46

Date

This is a correct copy o/Council action.

Linda M. Lauer, Clerk of the Council

Date

f:\Iaw\bills\1211 county property\1211 bill4.doc



LEGISLATIVE REQUEST REPORT

Expedited Bill 11-12

County Property

-

Disposition

DESCRIPTION:

Modifies the current procedures for disposition of County properties

to remove certain exemptions. Requires County Council approval of

certain property dispositions.

Apparently unrestricted Executive authority to dispose of County

property on any terms after minimal advertisement and without

public or legislative input.

To require the County Council, after public hearing, to approve the

disposition of certain County properties and the terms of disposition.

Department of General Services

To be requested.

To be requested.

To be requested.

To be researched.

Michael Faden, Senior Legislative Attorney, 240-777-7905

Applies only to property o\VIled or controlled by the County. Would

apply to County property located in a municipality.

Not applicable.

PROBLEM:

GOALS AND

OBJECTIVES:

COORDINATION:

FISCAL IMPACT:

ECONOMIC

IMPACT:

EVALUATION:

EXPERIENCE

ELSEWHERE:

SOURCE OF

INFORMATION:

APPLICATION

WITHIN

MUNICIPALITIES:

PENALTIES:

f:\law\bills\1211 county property\legislative request report.doc



Page 1 of2

Faden, Michael

From:

Sent:

To:

Hansen, Marc P.

Thursday, March 08, 201210:48 AM

Faden, Michael

Subject:

FW: Bill 11-12, County property disposition

Mike-

I have reviewed the attached draft bill. I want to let you know that I believe that the bill inappropriately

assigns executive functions to the CounciL As I disc:ussed in my email about Bill 4-12, a copy of which

I sent to you, I believe the Council can approve on a case by case basis a decision by the Executive to

surplus property, and the Council by law can set out the general rules under which the Executive may

dispose of COlmty property. But the Council cannot exercise a "legislative veto" over the terms and

conditions of a contract negotiated by the Executive.

See

AG LEXIS 19,25-27.

In my email on Bill 4-12, I vvTote:

Generally, government action that establishes a new plan or policy that is one of general application or

to establish some pennanent code of conduct must be adopted by a legislative

act-i.e

by enacting an

law.

Inlet Associates

v.

Assateague House,

313 Md. 413 (1988). An Executive act "merely looks to or

facilitates the administration, execution of implementation of a law already in force."

Silverman

at 50.

Other plain language amendments to § 56-10 appear to put into the Council's hands the implementation

of the urban renewal law. For example, Bill 4-12 states that the Council may place covenants and

restrictions on the conveyance of property "to prevent the development or spread of future slums." (§

56-10 (s) (3), lines 54-59) The Council could more specifically define in the law what those conditions

might be or require the Executive to adopt regulations to implement this provision, but the Council itself

cannot exercise this function on a case by case basis. For the same reason, I have identical concerns

regarding the other amendments made by Bill 4-12 to paragraphs (4) and (6) of

§

56-10.

I would be happy to review any authority you have relied on in drafting this bill before OCA prepares its

bill review memorandum.

Marc P. Hansen

County Attomey

Montgomery County, Maryland

240-777-6740



Page I

LexisNexis®

PRINCE GEORGE'S COUNTY, Maryland v. Marc SILVERMAN

No. 682, September Term, 1983

Court of Special Appeals of Maryland

58 Md. App.

41; 472

A.2d 104;

1984

Md. App. LEXIS 301

March 8,1984

PRIOR HISTORY:

[***1] APPEAL FROM THE

CIRCUIT COURT FOR PRINCE GEORGE'S COUNTY

AUDREY E. MELBOURNE, JUDGE.

DISPOSITION:

JUDGMENT AFFIRMED. COSTS

TO BE PAID BY APPELLANT.

Executive of Prince George's County to execute a deed of

conveyance to Silverman.

On appeal the County raises three issues for our

consideration:

I. Whether the court erred in holding that

the County Council's action regarding

Resolution CR-120-1981, [***2] which

pertained to the "Marton Tract", was

illegal and improper.

II. Whether the court erred in holding

that a contract for the sale of the "Marton

Tract" existed between the County and

Silverman.

III. Whether the County Executive

has the capacity to contract to convey the

"Marton Tract" in the absence of approval

by the County Council.

COUNSEL: Ralph E. Grutzmacher, Associate County

Attorney for Prince George's County, with whom were

Thomas P. Smith, County Attorney for Prince George's

County and Michael O. Connaughton, Deputy County

Attorney for Prince George's County on the brief, for

appellant.

Russell W. Shipley, with whom were Steven

R.

Smith

and Shipley, Curry

&

Taub, P.A., Landover on the brief,

for appellee.

JUDGES: Moylan, Liss and Bell, JJ.

OPINION BY: BELL

OPINION

[*46] [**106] Marc Silverman (Silverman),

Appellee, sought a Declaratory Judgment and a Writ of

Mandamus to have Prince George's County (County),

Appellant, convey the "Marton Tract" to him as the

highest qualified bidder. The Circuit Court for Prince

George's County ordered that the sale be ratified and that

a Writ of Mandamus issue commanding the County

FACTS

In 1980, the Board of Education conveyed the

Marton Tract to Prince George's County. The Board of

Education had acquired the tract in 1958 from the Marton

family. The

1*471

tract consists of approximately four

acres of land and is part of Lot 7 in the Richard S. Hills

Subdivision. The property lies north of Maryland Route

198 near the intersection of Route 198 and Interstate 95.



Page 2

58 Md. App. 41, *47; 472 A.2d 104, **106;

1984 Md. App. LEXIS 301, ***2

Since March of 1977, the County has disposed of

some 40 to 50 "major surplus properties" (property

containing improvements or property valued in excess of

$

25,000). Although Section 2-111.1 of the Prince

[**107]

George's County Code requires the County

Executive to inventory surplus property for approval by

the County Council

before

he disposes of it, in all of the

40 to 50 surplus property dispositions, the County

Executive first secured

[***3]

a bona fide

transferee/purchaser and

thereafter

submitted the matter

to the council for approval. In all cases

except

the

Marton Tract, the council approved the sale of the surplus

property.

The Marton Tract was advertised for sale in January

of 1981 as surplus property of the County. Silverman

contacted Raymond Austin of the County's Bureau of

Property Management in response to the advertisement.

He received a "bid package" from that office. Silverman

submitted a sealed bid, on a form entitled "Bid and

Option to Acquire Real Property", in the amount of

$

50,000 with a cashier's check for

$

5,000 payable to the

County.

The sealed bids were opened on February 27, 1981,

and Silverman qualified to participate in the oral auction.

At the auction, Silverman was declared the successful

bidder at

$

71,605. Silverman certified his bid on that

same day. The only other competing bidders were Eileen

and Wayne Updike, daughter and son-in-law of Clara

Marton, at

$

70,000. On March 11, 1981, the County

cashed Silverman's check for

$

5,000.

During April of 1981, the County Executive

prepared the proposed list of surplus property

dispositions, designated as Resolution CR-63-l98l,

[***4]

and submitted the list to the County Council for

approval. The Marton Tract was "deleted" from the list

with no explanation.

On August 11, 1981, Austin informed Silverman that

his bid for the Marton Tract had been accepted but that

because

[*48]

the period for notification of acceptance

of the option by the County had expired, the option was

null and void. A tender of a check in return of the deposit

accompanied that notification. In response to the letter

from Austin, Silverman met with County officials in an

attempt to ascertain the problem.

On August 28, 1981, the County informed Silverman

that the County Executive intended to resubmit the

Marton Tract for approval as surplus property as

Resolution CR-120-1981. When the council first

considered CR-120-1981 on October 13, 1981, it voted 6

to 5 in favor of approval; then one councilman changed

his vote to defeat the resolution 6 to 5. Following that

action the council approved, by a vote of 6 to 5, a motion

to table consideration of the resolution indefinitely. At

no point during their consideration did the council make

any reference to whether the subject property was needed

for a public purpose. The transcript of the

[***5]

council

proceedings indicated that some council members felt the

prior owners, the Martons, had been unfairly forced to

sell their land.

At the time CR-120-1981 was under consideration

by the County Council, legislation was pending which

would have amended the provision in the Code regarding

the prior owners rights to reacquire surplus property. On

October 13, 1981, when the council considered the sale

of the Marton Tract, the Code provided:

Notwithstanding the foregoing

provisions of this subsection (d), a person

from whom property was acquired by the

County, or the person's successor in

interest, shall have first right over

municipality, any government entity or

agency other than Prince George's County,

or any other person to reacquire the

property (or such portion of it which is

declared surplus) if all the following

conditions are met:

(3) The determination of the County

Executive that the property is surplus

occurs within

ten (10)

years after County

acquisition. (Emphasis added).

[*49)

Prince George's County Code

Section 2-ll1.1(d).

The pending legislation would have changed the period

during which the prior owners had a right

[***6]

to

reacquire the property from 10 to 15, 25, or 40 years.

(Note -- Section 2-111.1 was in fact amended on

[**108]

June 23,1982 to extend the period to 25 years.)

When Silverman filed the instant action to enforce



Page 3

58 Md. App. 41, *49; 472 A.2d 104, **108;

1984 Md. App. LEXIS 301, ***6

his option to purchase the Marton Tract, Clara Marton

intervened. The court found Clara Marton would be

entitled to reacquire the property only if the following

two conditions were met: (1) The Council's action on

CR-120-1981 was legal and proper, and (2) Amended

Section 2-111.1 applied to this case. After a thorough

and well reasoned discussion, the court found:

the County Executive's determination

that the Marton Tract is no longer needed

for a public purpose was correct, there

being no evidence to the contrary; that the

Council's failure to approve -- the "Marton

Tract" as surplus was motivated by legally

unauthorized

considerations,

i.e.,

prolonging a sale of county property until

a Code Amendment could be enacted that

would enure to the benefit of a special

interest; that the purchaser [Silverman}

met all the procedural requirements made

known to him by the County; and that

Petitioner, Marc Silverman, should be

granted the relief he seeks in these

proceedings 1***7] for the reasons herein

set forth.

The court further found that under the law in effect at the

time the matter was before the County Council, Clara

Marton had no right of reacquisition because the 10 year

period had expired.

municipal governing body in passing an ordinance are not

subject [***8] to judicial inquiry.

Our discussion ofthis issue is addressed in two parts:

(A) whether the court had authority to address the matter;

(B) whether the court erred in fmding the council's action

improper.

A.

The standard of review by the circuit court when the

County Councilor another administrative body is acting

in a quasi-judicial or administrative capacity is whether

the action was arbitrary, capricious, or discriminatory.

County Council v. Carl

M.

Freeman Assoc.,

281

Md. 70,

74. 376

A.2d 860

(1977);

See also; Montgomery County

v.

Woodward and Lothrop, 280 Md.

686,

706,

376

A.2d

483 (1977);

Stratakis

v.

Beauchamp,

268

Md.

643, 652,

304 A.2d

244 (1973). The test to determine whether

action is legislative or administrative is whether the

action is one making new law, i.e, an enactment of

general application prescribing a new plan or policy, or is

one which merely looks to or facilitates the

administration, execution or implementation of a law

already in force.

City of BOWie

v.

County Comm'r for

Prince George's County,

258

Md.

454, 463, 267

A.2d 172

(1970).

In

considering CR-120-1981 on October 13, 1981,

the council was not functioning in a purely legislative

[***91 capacity. 1*51] Rather, it operated in a

quasi-judicial or administrative capacity. The council

dealt with the disposition of one isolated. parcel of

property. The effect of its decision was restricted to the

individuals who had an interest in the property and had

no effect on the general safety or welfare. The council

essentially adjudicated Silverman's rights in the property.

Thus the trial court did not invade [**109] the province

of the council because it did not attack the validity of a

legislative enactment; rather it simply determined

whether the council's action on Resolution CR-120-1981,

pursuant to a

prior

legislative enactment (Section 2-111.1

ofP.G.Co. Code), was arbitrary and discriminatory.

.The County's reliance on

District Land Corp., supra,

for the proposition that the court invaded the legislative

province of the council is misplaced.

~e

Court, of

Appeals held in that case that a comprehensIve rezonmg

plan bearing a substantial relationship

~o

the pub,Ii: health

and welfare enjoys a strong presumptIOn of valIdIty, and

that the motives, wisdom, or propriety of a municipal

I.

Whether the Council's action regarding the

Marton Tract was illegal and improper.

The lower court found that the council's sole function

in considering CR-120-1981 was to determine whether

the [*50] Marton Tract was needed for a public purpose.

Since the council indefinitely tabled the resolution to

allow Section 2-111.1 to be amended so that a prior

owner could reacquire the property, the court held the

council acted improperly and arbitrarily.

The County contends that based on the applicable

statutory provisions, which require the council to approve

the Executive's determinations, the trial court invaded the

province of the County Council in determining that it

considered impermissible factors. The County cites

County Council for Montgomery County v. District Land

Corp.,

274

Md.

691, 337

A.2d

712 (1975) in support,

which holds that the motives, wisdom or propriety of a



Page 4

58 Md. App. 41, *51; 472 A.2d 104, **109;

1984 Md. App. LEXIS 301, ***9

body in passing the ordinance effectuating the

comprehensive rezoning are

[***101

not subject to

judicial inquiry. The adoption of a sectional zoning map

in that case, was deemed a "legislative" act because it

concerned legislative facts, e.g. zoning of a large area and

impact on general welfare of the county.

In

the case at

bar, however, the consideration of the Marton Tract

involved the council in a quasi-judicial capacity.

B.

The trial court did not err in holding that the

council's failure to approve CR-120-1981 was improper

and arbitrary.

The initial question we must address, for purposes of

the instant case, is within which branch of the

government does the power to dispose of surplus property

lie.

Division 2, Section 2-111.1 sets forth a framework for the

declaration of county owned property as surplus and the

disposal of the property.

It

provides in pertinent part:

The County Executive shall be

authorized to sell, lease or otherwise

dispose of any County owned real

property, no longer needed for public use

or in furtherance

[***12]

of the public

purpose, in accordance with the following

provisions:

(a) The County Executive shall

establish an inventory of all real property

and improvements titled in the name of

Prince George's County ...

(b) The County Executive, at least

once annually, shall review the inventory

of all real property and improvements held

in fee by Prince George's County and shall

[*53] transmit, for the approval by

resolution of the County Council, a list of

all properties to be leased, offered for sale,

or otherwise disposed of ....

Executive Branch

Article XI-A of the Maryland Constitution

(Home

Rule Amendment) sets forth the steps to be taken at the

local level to establish a charter local government.

Section 1 of [*52) Article XI-A the Home Rule

Amendment authorizes the counties to choose a charter

form of government, which if adopted by the voters of

the county, becomes the law or "constitution" of the

county. Section 2 mandates the adoption by the

Maryland General Assembly of a grant of express powers

for those counties choosing a charter form of

government. Pursuant

[***11]

to the mandate, the

General Assembly enacted the "Express Powers Act",

codified in

Article 25A of the Annotated Code of

Maryland.

Article 25A,

Section 5(B)

of the Maryland

Code permits the disposition by the County of "any real

or leasehold property belonging to the County, provided

the same is no longer needed for public use."

The Prince George's County Charter, Article IV,

Section 402 enumerates the specific powers of the

executive branch of the county government.

It

provides

that all those specific powers vested in Prince George's

County by the Constitution shall be vested in the County

Executive. Among the enumerated powers is the power to

"sign or cause to be signed on the county's behalf all

deeds, contracts, and other instruments . . ." Prince

George's County Charter, Article IV, Section 402(8).

Prince George's County Code, Subtitle Two,

Pursuant to the above, we agree with the trial court

that the County Executive was empowered to dispose of

county

1**110]

owned surplus property in accordance

with the requirements of Section 2-111.1.

Legislative Branch

Subsection (S) of the Express Powers Act,

Article

25A, ofthe Maryland Code

provides:

The foregoing or other enumeration of

powers in this article shall not be held to

limit the power of the county council, in

addition thereto, to pass all ordinances,

resolutions, or by-laws, not inconsistent

with the provisions of this article or the

laws of the State, as may

be

proper in

executing and enforcing any of the powers

[***13]

enumerated in this section ... as

may be deemed expedient in maintaining

the peace, good government, health and

welfare of the county.

This section contains a general grant of power to pass



Page 5

58 Md. App. 41, *53; 472 A.2d 104, **110;

1984 Md. App. LEXIS 301, ***13

laws for the peace, good government, health and welfare

of the County. Pursuant to this grant of power, measures

may be passed which are necessary and beneficial, and

will be adjudged valid by the courts, provided they are

reasonable and consistent with the laws and policy of the

State.

Montgomery Citizens League

v.

Greenhalgh, 253

Md.

151, 161,252

A.2d

242 (1969). Thus where council

legislation bears a reasonable relationship to the

implementation of an enumerated power, the legislation

will be upheld.

Applying the above analysis to the County Code we

agree with the trial court that:

(l) The requirement that the County

Executive annually inventory all County

owned property no longer needed for a

public purpose is necessary for the

Council to be apprised of the County's

surplus land holdings and proper to return

to the tax rolls or other governmental

agencies; and

auctions were held and bona fide deposits were cashed

prior to council approval by resolution.

[***15]

The

reason for ignoring the specifics of Section 2-111.1 was

obviously to enable the council to know the identity of

the grantee and his proposed use of the property. This

procedure contravenes the legislative intent of Section

2-111.1 which is to prevent discrimination and arbitrary

action.

Pursuant to the code, the council's sole duty was to

consider factors directly related to whether the property

was no longer needed for public use.

It

was not

authorized to table the matter until a code amendment

could be enacted that would enable the Marton family to

repurchase the property. In its answers to Interrogatories

propounded by Silverman, the County admitted that the

property was in fact surplus property. Since it is

undisputed that the property was surplus, it is clear that

the council acted arbitrarily in failing to approve

CR-120-1981. The court did not err.

[*55] [**1111 II.

Whether a contract for sale of

the "Marton Tract" existed.

By ratifying the sale of the Marton Tract, the trial

court implicitly found that a contract existed between

Silverman and the County. Prince George's County

contends that there never was a contract between the two

parties because

[***16]

the County never accepted the

Bid and Option Agreement submitted by Silverman. The

County asserts that the option became null and void by

the terms of the agreement itself when the 45 day period

for acceptance set forth in paragraph lIB of the agreement

expired. The County cites

American Medicinal Spirits

Company

v.

Mayor and

City

Council of Baltimore, 165

Md.

128, 166

A. 407

(1933) in support, which states at p.

133,

166A.

407:

Since the offeror was at liberty to make

no offer, it was free to determine and

impose whatever terms it might choose,

and among these it might require that its

offer be accepted within a designated time

and in a specific manner. If no acceptance

is made in the manner and within the

period fixed by the offer, the offer

Williston

v.

necessarily

expires.

Contracts,

Sections 53, 61, 76.

The County further urges that the 45 day provision

[*54]

(2)· The prOViSlOn requiring

Council approval that properties are in fact

surplus is likewise a necessary

[***14J

and proper exercise of legislative checks

and

balances

on

the

executive

determination to dispose of County

property: To hold otherwise could result in

the County Executive's declaration that all

the county-owned property is surplus.

The problem in this case, however, is not whether

Section 2-111.1 is valid, but whether Section 2-111.1 was

properly followed. Section 2-111.1 sets forth the

procedure for disposing of surplus property. It is

designed to insure fairness and to prevent arbitrary and

discriminatory dispositions. It is important to note that

the code requires council approval only of the County

Executive's determination that the property is surplus; not

approval of the prospective grantee.

. Prince George's County has been disposing of its

surplus property in contravention of the code. Despite

the code's requirement of obtaining approval before a

grantee has been selected, the County has condoned the

Executive's procurement of the grantee first. In the 40 to

50 surplus property cases, the property was advertised as

surplusage in newspapers, sealed bids were accepted, oral

@



Page 6

58 Md. App. 41, *55; 472 A.2d 104, **111;

1984 Md. App. LEXIS 301, ***16

amounted to a right to terminate the contract, and in the

absence of fraud, undue influence, or mistake, such a

reservation is valid and enforceable.

Acme Markets, Inc.

v. Dawson Enterprises, Inc .•

253

Md.

76, 251

A.2d 839

(1969); Kahn v. Janowski,

191

Md.

279,

60 A.2d 519

(1948).

At the outset [***17] we note that although the facts

of

American Medicinal Spirits, supra,

appear similar to

those of this case, we find the reliance by the County

thereon misplaced. In

American Medicinal Spirits,

a

company contracted to purchase land from the city

conditioned on the city passing an ordinance within one

year. The city failed to pass the ordinance within the

specified period. The Court held the contract amounted

to a unilateral offer to purchase by the company and that

one term of the offer was not met. Therefore, the

purchaser/company could opt to declare the [*56]

contract null and void. The rationale behind this holding

was obviously to prevent the city from procrastinating

and to assure the company that an effort would be made

to fulfill the terms of the contract in a timely manner.

The Court did not address the issue before us -- whether

the city/seller (or in this case the County) could

purposefully avoid passing the ordinance and then

declare the contract null and void.

Silverman posits that the County did in fact approve

his bid by negotiating his check of

$

5,000; by

acknowledging in an informal memorandum that the bid

for the property was ratified and by Austin's [***18]

letter of August 11, 1981, stating the County accepted his

bid. Additionally, Silverman asserts that he had the sole

right to exercise the option; therefore it was not even

necessary for the County to accept. As to the allegations

concerning the 45 day provision in the agreement,

Silverman contends the provision was an illegal and

unenforceable provision.

Before we address the parties' contentions, we must

determine exactly what the agreement entitled "Bid and

Option to Acquire Real Property" represents.

An option to purchase property is a continuing offer

to sell by the optionor which is irrevocable during the

stated period.

Beall

v.

Beall.

291

Md.

224, 434

A.2d

1015

(1981).

An

option is not a mere offer to sell, but is a

binding agreement if supported by consideration.

Blondel/

v.

Turover,

195

Md.

251, 72

A.2d

697 (1949).

The optionee has what is termed a power of acceptance,

and when he accepts the offer in the prescribed manner,

the option is exercised and a binding bilateral contract of

sale is created.

Straley v. Osborne,

262

Md.

514, 278

A.2d

64 (1971).

Paragraph lIB of the agreement between Silverman

and the County provides:

within 45 days after [***19] Optionee

has been notified that his bid was

accepted, Optioner shall notify Optionee

in writing that his Option was accepted. If

notice is [**112] not given to Optionee

within the allotted time, this Option shall

become null and void.

[*571 This provision implies that the County retains

the power to revoke its "offer" and thereby prevent the

formation of a binding contract. Since by definition, an

option cannot be revoked, this agreement, despite its title,

cannot be deemed an option contract. Accordingly, we

must analyze the parties' positions under general contract

principles.

A contract is formed when an unrevoked offer made

by one person is accepted by another.

An

"offer" is the

"manifestation of willingness to enter into a bargain, so

made as to justify another person in understanding that

his assent to that bargain is invited and will conclude

it."

1 .

Restatement Contracts (2d)

§

24 (1979). A

manifestation of willingness to enter into a bargain is not

an offer if the person to whom it is addressed knows that

the person making it does not intend to conclude a

bargain until he has made a further manifestation of

consent.

Foster

&

Kleiser

v.

Baltimore County, [***20]

Md.,

57

Md.App.

531,

470 A.2d

1322 (1983) citing

1

Restatement Contracts (2d)

§

26 (1979). By the same

token, an invitation to bid is not an offer, but the bid or

tender is an offer which creates no right until accepted.

Rofra, Inc. v. Board of Education,

28

Md.App.

538, 346

A.2d

458 (1978). Acceptance of an offer can be

accomplished by acts as well as words; no formal

acceptance is required.

Porter v. General Boiler Casing

Co.,

284

Md. 402, 409,

396

A.2d 1090

(1979);

Duplex

Envelope Co. v. Baltimore Post Co.,

163

Md.

596,

605,

163 A.

688 (1933).

Judge Adkins, writing for this Court in

Foster

&

Kleiser, supra,

espoused the principle that a provision in

a contract requiring council approval amounts to a

condition of acceptance; and therefore, there can be no



Page 7

58 Md. App. 41, *57; 472 A.2d 104, **112;

1984 Md. App. LEXIS 301, ***20

binding contract until such approval is forthcoming. In

addition, the requisite approval must comply with the

applicable laws. In that case, Foster

&

Kleiser leased a

tract of land in Baltimore County owned by County

Mutual Acceptance Corp. The lease was terminable upon

60 days prior written notice from either

party.

Baltimore

County offered to purchase the property. The agreement

between Baltimore County

[***21)

and County Mutual

stated:

[*58)

In the event that this Agreement

is not approved by the Baltimore County

Council, this Agreement shall become null

and void ...

County Mutual terminated Foster

&

Kleiser's lease, and

the contract of sale was approved by the County CounciL

Foster

&

Kleiser brought suit, alleging among other

things, that the submission of the contract of sale by

Baltimore County to County Mutual was an offer to

purchase the land; that the offer was accepted when

County Mutual executed the contract; and that there was

a binding contract subject to approval of the County

CounciL We held at p. 538 of

57

Md.App., 470

A.2d

l322:

there could be no binding or enforceable

contract until approval by the County

Council had occurred. Therefore, what

Foster

&

Kleiser claims was an offer

submitted to County Mutual by Baltimore

County was not an offer, but merely part

of preliminary negotiations. County

Mutual could not have accepted this

"offer" without further action by the

County, that

action being approval by the

County Council, as required by the County

Charter.

(Emphasis supplied).

The Baltimore County Charter

§

715 stated in

[***22)

pertinent part:

... Any contract ... must be approved

by the County Council before it is

executed if the contract is

(1)

For the purpose of

real or leasehold property

where the purchase price of

the property is in excess of

$

5,000 ... Balto.Co.Code

1978 (1982 Cum.Supp.)

Applying the above principles to the sequence of

events in this case, we hold that a binding contract did

exist between Silverman and the County. The

advertisement for sale of the Marton Tract by the

[**113)

County did not constitute an offer.

Rofra, Inc.,

supra.

Rather, Silverman's bid, initially at

$

50,000 and

finally at

$

71,605, constituted his offer to purchase the

property. There is no Statute of Frauds problem because

Silverman certified his bid in writing on the same day.

The County accepted Silverman's offer when

[*59)

it

declared Silverman the successful bidder.

The

negotiation of Silverman's

$

5,000 check by the County,

on March 11, further confirmed its acceptance.

By 'the terms of the agreement, however, this

acceptance was conditioned on "notice [being] given to

the Optionee within 45 days." This provision enabled the

council to approve or disapprove

[***23]

the sale. Had

this provision stated that the entire agreement required

approval by the council and the applicable statute

reinforced such a requirement, as in

Foster

&

Kleiser,

we

would have to hold that a binding bilateral contract was

not formed for lack of acceptance. In this case, however,

the applicable statute, Section 2-111.1 of the Prince

George's County Code, mandated that the Council only

approve the determination that the property was surplus,

and no more. If the council had in fact determined that

the property was needed for a public purpose, the County

could then declare the agreement void. As we discussed

in Issue I,

supra,

however, the council conceded that the

property was surplus. Therefore, the condition in the

contract requiring council approval was fulfilled and the

County is deemed to have accepted Silverman's offer.

Moreover, the County's subsequent action in this

case constituted a waiver of its right to invoke the 45 day

provision. The right to rescind may be waived by

"continuing to treat the contract as a subsisting

obligation."

Michael v. Towers,

253

Md.

114, 117,

251

A.2d

878 (1969), quoting

Kemp v. Weber, 180 Md. 362,

24 A.2d

779

[***24]

(1942). "If a party ... does any act

which recognizes the continued validity of the contract or

indicates that he still feels bound under it, he will be held

to have waived his right to rescind."

Lazorcak v.

Feuerstein,

273

Md.

69, 76, 327

A.2d

477-481 (1974).

See also, Bagel Enterprises, Inc. v. Baskin and Sears, 56

@



Page 8

58 Md. App. 41, *59; 472 A.2d 104, **113;

1984 Md. App. LEXIS 301, ***24

Md.App.

184, 467

A.2d

533 (1983). The Court of Appeals

in

Coopersmith

v.

Isherwood,

219

Md.

455,

150 A.2d 243

(1963) elaborated on this principle, stating at p.

462,150

A.2d 243:

A right to rescind, abrogate, or cancel a

contract must be exercised promptly on

discovery of the facts from which it

[*60]

arises; it may be waived by continuing to

treat the contract as a subsisting

obligation. The general rule is that the

right to rescind must be exercised within a

reasonable time, although there is

authority to the effect that the mere

question of how much time a party to a

contract has permitted to elapse is not

necessarily determinative of the right to

rescind, the important consideration being

whether the period has been long enough

to result in prejudice to the other party.

that the county is estopped from raising this issue.

To apply estoppel, the party claiming the benefit of

estoppel must have been misled to his detriment and

[***26]

must have changed his position for the worse,

having believed and relied upon the representations of the

party sought to be estopped.

Dorsey

v.

Beads,

288

Md.

161, 171, 416

A.2d

739

(1980); Neuman

v.

Travelers

Indemnity Co.,

271

Md.

636, 654, 319

A.2d

522 (1974);

Lusby

v.

First National Bank,

263

Md.

492,

505,

[*61]

283 A.2d 570

(1971);

Savonis

v.

Burke,

241

Md. 316,

319, 216

A.2d

521 (1966). This Court in

Zimmerman

v.

Summers,

24

Md.App. 100, 330 A.2d

722 (1975)

elaborated on the principle stating at p. 123,

330 A.2d

722:

[T]he rule now to be followed in

Maryland however is that equitable

estoppel may be applied not only when the

conduct of the party to be estopped has

been wrongful or unconscientious, and

relied upon by the other party to his

detriment,

but also when the conduct,

apart from it morality, has the effect of

rendering

it

inequitable

and

unconscionable to allow the rights or

claims to be asserted or enforced.

(Emphasis added).

In this case, the County continued to treat its

agreement with

[***25]

Silverman as a subsisting

obligation by reconsidering the Marton Tract under

Resolution CR-120-l98l in October of 1981, long after

the 45 days expired. Furthermore, the council's act of

"deleting" the Marton Tract from the first resolution, and

its act of indefinitely tabling the second resolution

certainly amounted to prejudice to Silverman.

In

light of

the above, the County is estopped from invoking a

defense based on the 45 day provision.

III.

Whether the County Executive has the capacity to

contract to convey the "Marton Tract" without approval

by the County Council.

The County contends the Executive lacked the

capacity to sell the "Marton Tract" to Silverman.

Silverman asserts that this issue was notpreserved for our

review.

Md.Rule 1085.

Although this issue was not directly raised below, the

court indirectly addressed this issue when it considered

what powers the Legislature and Executive have pursuant

to Section 2-111.1. Therefore, we do

[**114]

not

dismiss by virtue of

Rule 1085.

Silverman also argues

The practice of the County Council prior to its

consideration ofCR-120-l98l and subsequent thereto has

been to have the County Executive enter into a contract.

with the prospective purchaser of surplus

[***27]

property before submitting the matter to the council for

its approval. The County cannot now deny the validity of

the procedures it created for its own benefit. Silverman

relied on representations that the Executive had the

capacity to contract.

It

certainly would be "inequitable

and unconscionable" to allow the County now to assert

this defense.

JUDGMENT AFFIRMED.

COSTS TO BE PAID BY APPELLANT.

:':>:'. ,-:

@



Page 1 of23

wCOMCOR IlB.45.01 Disposition

of Real

Property

~

llB.45.01.01 Purpose

1.0 To provide policies and procedures whereby disposition is made of certain County- owned real

property.

IllB.45.01.02 Applicability

2.0

A.

B.

These policies and procedures apply to the disposition of all Comity-owned real property except:

parcels at the Montgomery County Life Sciences Center;

former school sites containing school buildings no longer in public school use;

C. sites acquired for specific purposes such as roads, housing projects, and public parking facilities

and parking lot districts; sites disposed of for purposes related to roads, housing, matters of significant

or strategic interest to the County's economic development; or public parking facilities in parking lot

districts;

. D. sites, generally, which are leased for under five years, or splinter parcels which are leased for

any length oftime.

00

llB.45.01.03 Defmitions

3.0

COUNTY AGENCY - Any department or Agency of the Montgomery County Government.

3.1 COUNTY-WIDE PUBLIC USE - Use ofreal property available to or benefiting all residents of

Montgomery County.

3.2 DISPOSITION - The placement of a site in reservation, the leasing of

~

site, other than splinter

parcels, for five years or more, the assignment of the site's reuse to a County or Outside Agency, or the

declaration of the site as surplus.

3.3 EXECUTIVE ORDER ON REUSE AND DISPOSITION - Instrument by which the County

Executive places a site in reservation, approves a lease, assigns a reuse, declares a site surplus.

3.4

LEASE - A contract for use of a site, other than a splinter parcel, for five years or more.

3.5 LOCAL MUNICIPAL USE - Use ofreal property by a limited number of County citizens. This

would include use restricted to residents of a local municipality or the application of special fees or.other

restrictions on non-local residents for use of the property.

3.6 OUTSIDEAGENCY - Any agency, outside the Executive and Legislative branches of the

Montgomery County Government. This would include but not be limited to WSSC, :N1NCPPC, Revenue

Authority, Housing Opportunities Commission, MCPS, Montgomery College, and Local Municipalities.

3.7 SALE BY DIRECT NEGOTIATION - The sale ofreal property is confined to negotiations

between the County and a single potential purchaser. The bid process and the public offering are waivedF.:Jl

I.!J/



Page 2 of23

3.8 SALE BY FIXED PRICE -

An

offering of real property for sale at a fixed price. This form of sale

is usually part of a sale where other factors such as proposed uses and design are considered as

important as the price.

3.9 SALE BY MINIMUM PRICE COMPETITION -

An

offering of real property for sale to the

public wherein a minimum acceptable sales price is stated. Bids below the stated minimum price are not

accepted.

3.10

SALE BY PUBLIC AUCTION - A public sale conducted by an auctioneer.

3.11 SALE BY REUSE COMPETITION -

An

offering for sale based on the proposed reuse. The

prospective purchaser is chosen according to the reuse deemed most in the public interest. Price is of

secondary importance.

3.12 SALE BY SEALED PROPOSALS -

An

offering of real property for sale to the public. The

highest offer wins the rights to negotiate a contract for purchase. As implied, all proposals are secret

until the official time of opening. If contract negotiations fail, the offering is withdrawn.

3.13 SITE RESERVATION -

An

action taken by the County Executive, via an Executive Order, to

defer further disposition actions on the site in question:

A.

in order that the site may be used in accordance with an approved Master Plan,

B.

pending determination ofthe site's suitability for a project contained in an adopted Capital

Irnprovementprograrn,or

C.

in anticipation of greater reuse or disposal prospects in the future.

Sites placed in reservation may be leased.

3.14 SPLINTER PARCELS - Parcels of such size, shape, topography or other characteristics as to

have only nominal value.

3.15 SURPLUS SCHOOLS - Real property that is not needed to meet the present and anticipated

future needs of County Agencies and Outside Agencies and that has been designated as surplus by.

Executive Order pursuant to a Reuse Analysis.

.

3.16 SURPLUS SCHOOL SITES - Unimproved school sites that have been declared surplus by the

Board of Education, approved for transfer by the State of Maryland, and transferred to the County.

3.17

TAX SALE PROPERTY - Property acquired by the County as a result of non-payment of taxes.

00

llB.45.01.04 Policy

4.0 The County Executive may, pursuant to this Executive Regulation, dispose of County- owned real

property not currently programmed, .except those properties excluded under Section 2.0, Applicability.

4.1 Property disposition shall be done in a fair and equitable manner that is open to public scrutiny.

Review and comment on disposition of real property shall be invited, as specified in this Executive

Regulation, from County Agencies, Outside Agencies (including but not limited to "MNCPPC, MCPS,

ht+n·l!umr\Xl

~ml~p-~LcomJnxtilzateway.dIVMarylandJcomcor/cha

ter11 bcontractsand rocur...

112312012



Page 3 of23

and Local Municipalities, where applicable), the public at the public hearing (per Section 9.2.B.), and

the County CounciL

4.2 Proposals that respond to certain reuse preferences of the County (as supporting other, non­

financial public policy objectives) may be given priority over proposals offering higher prices.

4.3 Sites designated for particular public uses in an approved Master Plan (including portions of sites

which may be needed for road improvements) and sites which may be suitable for approved CIP projects

shall be placed in reservation.

4.4 All other things being equal, County-wide public uses would be given first priority, municipal

public uses would be given second priority, quasi-public uses third priority, and private uses would be

given fourth priority.

4.5 Sites placed in reservation for Master Plan purposes, or designated by the County Executive for

use by an Outside Agency, shall be transferred to the Outside Agency upon payment of the fair market

value as determined pursuant to this Executive Regulation, or in accordance with other payment policies

established by the County Executive. For sites transferred to the :MNCPPC for parks, the :MNCPPC shall

pay remaining debt service.

4.6 Sites sold to private purchasers must be sold at prices not less than their fair market value as

determined by the Director, DPWT (based on one or more independent appraisals), unless otherwise

specified in the Executive Order on Reuse and Disposition.

4.7 In disposing of property to private users, the County shall install site improvements only in

exceptional cases.

4.8 The County Executive n:;tay dispose of County-owned real property through leases containing

rights of first refusal to purchase, or options to purchase, provided that the material provisions of these

Executive Regulations are complied with at the time of disposition.

Ii

llB.4S.01.0S Responsibilities and Authority

5.0 Contract Review Committee (CRC) shall approve for compliance with law and Executive

Regulations

.

A.

B.

C.

5.1

A.

B.

C.

the method of disposition,

the Request for Proposals, and

the contracts for sale of surplus real property.

County Attorney's Office shall

approve

all

deeds, contracts, leases, and forms as to form and legality;

approve the use of outside counsel, and

assist in contract negotiation as needed.



Page 4 of23

5.2

A.

Department of Public Works and Transportation (DPWT) shall

develop and maintain an inventory of real property,

administer the disposition of real property, and

establish the necessary Departmental procedures and practices.

Department of Finance shall

A.

B.

B.

C.

5.3

administer the disbursement and receipt of fIlllds, and

refer the annual inventory of tax sale properties to DPWT for disposition.

Office of Management and Budget (OMB) shall

5.4

A.

participate in the Preliminary Reuse Review, and

review and comment on Reuse Analyses.

Chief Administrative Officer (CAO)or his designee shall

B.

5.5

A.

approve and sign all options, contracts, and leases; and

B.

approve the Reuse Analysis for referral to the County Council, the Planning Board, and the

general pUblic.

5.6

County Executive

A. shall execute all deeds of conveyance, covenants, and restrictions incidental to the transfer of

property by the County.

B.

shall approve the reservation of properties via Executive Order,

shall approve the reuse assigned to a site, via Executive Order, and

shall approve the declaration of a site as surplus, via Executive Order.

Planning Implementation Section shall

participate in the Preliminary Reuse Review, and

review and comment on Reuse Analyses.

Office of Procurement shall

C.

D.

5.7

A.

B.

5.8

A. be responsible for Bids and Requests for Proposals and review all contracts for sale for

compliance with law and Executive Regulations.

htfn·/I'WVJ\J\l

~ml~!J"aLcornJn.xtlQ:atewav.dlL'M

landlcomcorlcha ter 1 contractsand r

2



Page 5 of23

5.9

The County Council shall

A.

be provided with opportunity to review and comment on the Reuse Analysis (including

recommendations) prepared by DPWT, and,

B. approve all proposals to sell properties acquired through tax sales, pursuant to Section 52-38 of

the Montgomery County Code, 1994, as amended.

~

IlB.45.01.06 Services

6.0 Subject to County law, Administrative Procedures and existing appropriations, DPWT may

arrange or contract for services, work or facilities furnished by an individual or agency, public or

private, in connection with the proposed or actual disposition of property. This shall include but not be

limited to:

A.

Appraisal services

Legal services

Engineering and/or architectural services

Newspaper and other media services

Installation of public facilities

General planning/consulting services

B.

C.

D.

E.

F.

IW

llB.45.01.07 Inventory

of Real

Property

7.0

DPWT shall develop and maintain an inventory of County-owned real property.

~

llB.45.01.08 Initiation of Disposition Process

8.0 If a site is in the DPWT inventory as provided for in 7.0 above and is deemed by DPWT

preliminarily suitable for disposition, DPWT shall, as a first step, refer the site to Planning

Implementation Section and to OMB for Preliminary Review under the procedure below for

Determination of Reuse.

~

llB.45.01.09 Determination

of Reuse

9.0

Step 1 - Preliminary Review

COMB

and Planning Implementation Section)

A. Master Plan - Within fourteen days, Planning Implementation Section shall review the site in

relation to approved Master Plans. Planning Implementation Section should consult informally with the

:MNCPPC if necessary to ascertain a clear understanding of the Master Plan regarding the site in

question. A site specifically designated in an approved Master Plan for particular public uses, or that

portion of such site which may be needed for right-of-way for road improvements in the Master Plan,

shall be recommended for placement in reservation. If, after review, questions remain about the

intention of the Master Plan, the site shall not be placed in reservation for Master Plan purposes.



Page 6 of23

B. Functional Use - Within fourteen days, OMB shall review the site as to its desirability for future

public use as fire stations, police stations or other projects as contained in an adopted Capital

Improvements Program (CIP). Current use of the site should be included in this analysis. A site

identified as potentially suitable for use in an approved CIP project shall be recommended by OMB to

DPWT to be held in reservation until its suitability is determined.

C. For each site recommended for reservation by either Planning Implementation Section or OMB,

DPWT shall forward an Executive Order on Reuse and Disposition to the County Executive for decision

together with its own recommendations, those of OMB, those of Planning Implementation Section, and

other supporting documents as applicable.

D. Subsequent to County Executive approval, DPWT shall forward copies of the approved

Executive Order to all appropriate County and Outside Agencies.

E.

If a site is placed in reservation for use by an Outside Agency (pursuant to an approved Master

Plan), DPWT shall prepare an agreement for transferring the site to that agency. Payment for the site

shall be the appraised fair market value based on the highest and best use, unless otherwise provided for

in the Executive Order on Reuse and Disposition, or in accordance with other

paym~nt

policies

established by the County Executive. For sites transferred to the l\.1NCPPC for parks, the l\.1NCPPC shall

pay remaining debt service.

. F. . If, as a result of the Preliminary Review, no reservation of the site is made by the County

Executive, DPWT shall proceed to administer the Secondary Review as provided below.

9.1

Step 2 - Secondary Review (Agencies}

A.

DP"WT shall prepare and distribute to all appropriate County and Outside Agencies information

pertaining to the site and shall invite them to propose reuses. Further, agencies shall be encouraged to

identify any future needs that might require easements or covenants for attachment to the deed in the

event the site is sold; any community use occurring on the site; and any municipal zoning or Master Plan

provisions that should be considered.

B.

Agencies shall notify DPWT in writing, within 30 days, of their interest in, or comments on, the

site. The notification shall include the proposed reuse, if any, along with the pertinent supporting data

sufficient to justify the Agency's proposed reuse.

9.2

Step 3 - Reuse Analysis

A.

DPWT shall prepare and submit to the County Executive via the Chief Administrative Officer a

Reuse Analysis on each site not reserved under the provisions of9.0 above. This analysis shall include,

but not be limited to, a discussion of the following:

1.

Proposals made under the Secondary Review process.

2. Individual site characteristics including, but not limited to, zoning (including municipal

zoning, where applicable), topography, improvements, utilities, access, and transportation.

3. Marketing conditions including, but not limited to, the cost of development, financing, the

scheduled availability of public facilities for the site, and other conditions of the market.

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Page 7 of23

4. All reuse options identified by DPWT or by others to this point, with the advantages and

disadvantages of each.

5.

Recommendations by DPWT.

6.

If

DPWT recommends that the site be transferred to any Outside Agency, the appraised fair

market value shall be included in the Reuse Analysis.

B.

The County Executive shall conduct a public hearing on the DPWT reuse recommendations

pursuant to AP 1-9, Public Hearings. (Note: In addition to advertisement requirements provided for in

AP 1-9, notice shall be sent to all County Council members, the heads of all Outside Agencies, and the

heads of all civic associations whose areas encompass or abut the subject parcel.) The County Executive

may waive the requirements of sections 9.2.B., 9.2.C., and 9.2.D.

1.

2.

for splinter parcels and

for recommended reuse of the site by a County Agency.

The County Executive shall notify the County Council of his waiver decision and his reasons

therefor.

C.SirnultaJieously with the advertisement of the public hearing, DPWT

1. shall transmit the Reuse Analysis to the MNCPPC and to other appropriate County and

Outside Agencies (including the BOE and applicable municipality) with an invitation to comment at or

before the public hearing provided for above; and

2. shall transmit the Reuse Analysis to the County Council who shall provide comments, if any,

on or before the date of the public hearing provided for above. The CAO or his designee shall offer to

consult with the Council regarding the Reuse Analysis.

D. After the public hearing, DPWT shall coordinate with the Hearing Officer to submit to the

County Executive

1.

2.

3.

4.

5.

6.

E.

1.

the Hearing Officer's Report; ,

the Reuse Analysis;

responses from MNCPPC and other agencies;

the results of consultation with the County Council;

an Executive Order on Reuse and Disposition, ready for signature; and,

other relevant materials.

The County Executive shall, by Executive Order,

specify a reuse of the site by a County or Outside Agency, along with any conditions on that

~

reuse;

cEJ



Page 8 of23

2.

3.

place the site in reservation for detennination of reuse at a later date; or

declare the site surplus and available for sale in accordance with specified conditions, if any.

F. Ifuse by a County Agency is approved by the County Executive, DPWT shall administer the

transfer of control to the receiving agency subject to the following stipulations:

1. The receiving agency shall make substantial progress towards the reuse of the property

within two years from the date of the transfer.

2.

Extension of control exceeding two years shall be granted only by Executive Order.

3. In the event an extension is not granted, DPWT shall reassume control over the property and

reinitiate the reuse process.

4. If the property is being considered fodransfer to a third party, the receiving agency shall

replace DPWT in the administration of Sections 10.0,10.1,11.0,11.1,11.2,12.0, 13.0 through 13.6,

14.0 through 14.2 where these Sections are applicable to the transfer. The price to be paid by the third

party shall be the appraised fair market value of the site unless provided for otherwise in the Executive

Order on Reuse and Disposition or in other payment policies established by the County Executive.

5.

Receiving agencies shall file semi-annual progress reports with DPWT.

G. Ifuse by an Outside Agency is approved by the County Executive, DPWT shall administer the

transfer of ownership to the appropriate agency upon:

1.

Execution of an agreement, and

2. Payment to the County of the appraised fair market value based on the Highest and Best Use,

unless otherwise stipulated in the Executive Order on Reuse and Disposition or in other County

Executive policy decisions. For sites transferred to the J\.1NCPPC for parks, the J\1NCPPC shall pay

remaining debt service.

H.

PBJ

If the site is declared surplus, DPWT shall proceed to sell it as provided for below.,

IlB.4S.01.10 Selection of Sale Method

10.0 If not stipulated in the Executive Order on Reuse and Disposition, DPWT may dispose of the site

by sale in accordance with any method permitted by State and local law, including but not limited to:

A.

B.

C.

Minimum price competition

Sealed bids

Fixed price

Direct Negotiation

Reuse Competition

D.

E.

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Page 90f23

F.

G.

Related variations and combinations of the preceding

Public Auction

The criteria for the selection shall include, but not be limited to, general market conditions, potential

reuse, characteristics peculiar to the individual site, and conditions of the fmancing market.

10.1 DPWT shall submit its recommendations for the method to be used to sell the surplus real

property, together with supporting Justification, to the CRC for approvaL CRC shall approve or

disapprove the selected method on the basis of compliance with Law and Executive Regulations.

DJ

llB.4S.01.11 Requests for Proposals

11.0 If a disposition method involving public offering is selected, DPWT shall develop; and the

.

Office ofProcurement shall issue a Request for Proposals or Bids.

11.1 The Request for Proposals or Bids is the formal public notice of the offering of the land.

It

should be accomplished through publication in one or more newspapers of general circulation in the

County and through mailed notices to all persons and firms that have signified to DPWT a bona fide

interest in acquiring any of the land in the offering. The information contained in the invitation, at a

minimum, should include:

A.

Identification ofland to be offered.

B. A general description of the types of development permitted and conditions ofuse, plus general

notice to bidders of the need to comply with Zoning Ordinance requirements in the event rezoning is

. proposed.

C. Identification of the kind of disposal and the disposal method, including criteria and procedures

for making selection.

D. The cutoff date ofthe receipt of proposals, if established. This is required in the case of

minimum-priced competition, sealed bid, and public auction disposal methods.

E. Instruction on how to obtain further information about the terms and conditions of the disposal

and procedures for submitting proposals. The instructions shall state the amount of any fee charged by

DPWT for the offering documents (Prospectus) if applicable.

11.2 The Prospectus shall contain all the terms and conditions of the offering.

It

must be readily

available to all prospective purchasers promptly after publication or issuance of the first invitation for

proposals. DPWT shall submit copies of the Prospectus to the Office of Procurement prior to

publication. The Prospectus should normally contain:

A. The site Plan and Declaration of Covenants and Restrictions, if any. Also, a clear statement of

any other restrictions imposed on the property. A description of the property for which proposals are

invited, including:

1. Legal and other description sufficient to identify clearly the boundaries and area of the land

involved, together with a map or plat showing the location of the land. Location of existing and

proposed streets and utilities to serve the property, to the extent available.

@



Page 10 of23

2.

Information on general grades and evaluations, if available.

3. Information on: test borings and their analysis to the extent available, location and type of

existing basements, foundation walls, footings, abandoned utilities, and the extent and character of fill.

4. The County shall not be liable for the accuracy of data and the Prospectus shall contain the

appropriate disclosure statement.

B. A statement as to kinds of proposals that may be submitted and a description of the method of

selecting purchasers.

C.

Proposed form of contract of sale.

D. Statement of requirements for the submission of proposals, including place, cutoff date and

time, and documentation required as to the bidder proposal, including the good faith deposit or bid bond

requirements.

E. All forms specifically required from the bidder in submitting proposals, including the Warranty

of Non-Collusion.

F. Statement describing carrying charges, if any, that may be charcred against the selected bidder

prior to transfer of title and payment of the purchase price and the proposed form of deed by which the

County will convey title to the land.

.

B!J

IlB.45.01.12

Selection of Purchaser

12.0 Upon receipt of bids (or proposals, depending on the selection method employed), DPWT, in

consultation with the Office of Procurement, shall select the prospective purchaser.

lU

llB.45.01.13

Contract Negotiation

13.0

Once the purchaser has been selected, DPWT shall negotiate the contract of sale.

13.1 A Declaration of Covenants and Restrictions may be used to provide a recordable document

specifying the land use controls on the site.

It

may cover all or only a portion of the site. The declaration,

if used, shall be recorded by DPWT in the County's land records, give constructive notice of its

provisions, and be legally enforceable.

13.2 The time permitted for the performance of each obligation in the disposal agreement shall be

specified. Such times should be tailored to meet the circumstances, avoiding unnecessary risks and

encouraging timely compliance by the purchaser.

13.3 The obligations of DPWT and the purchaser for the installation of any site improvements which

are to be provided after the agreement is executed shall be specified in the disposal agreement. The

County shall install site improvements only in exceptional cases.

13.4 The land disposal agreement must be adequately secured by a good faith deposit in cash,

certified check or other approved security. The amount of the deposit or other security shall be

determined by the Director, DPWT.

It

is normally between 5% and 15% ofthe purchase price.

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Page 11 of23

13.5 Ifvarious segments of a property are to be conveyed on separate dates, a schedule shall be

annexed to and made part ofthe agreement, setting forth the legal description, date of conveyances and

amount to be paid for each segment. The determination of the dates and payments for the various

conveyances shall be coordinated Vvith DPWTs appraisals and determination of market value. The

amount to be paid for a segment may be its market value (as of the date of conveyance) or the prorata

share of the total purchase price (although, cumulatively, the purchaser pays only the total contract price

for the entire property). The good faith deposit shall be based upon the sales price of the entire property.

A map outlining the segments shall be annexed to the agreement.

.

13.6 Before authorizing a disposal, DPWT shall determine that the purchaser possesses the

qualifications and fmancial means and responsibility to acquire and develop (where applicable) the land

in accordance with-the proposed disposal agreement.

[J

llB.45.01.14 Approval of Contracts; Notice

14.0 DPWT shall submit all contracts along with supporting documents to the CRC for determination

of compliance with the Request for Proposals or Bids and applicable law and Regulations. Once

approved by the CRC, the contracts shall be submitted to the Chief Administrative Officer or his

designee for execution.

14.1 All proposals to sell property acquired through tax sale shall be approved by the County Council,

pursuant to Section 52-38 of the Montgomery County Code, 1994, as amended.

14.2 The proposed disposition shall be advertised by DPWT once a week for three successive weeks

in at least one local newspaper of general circlJ.lation. In addition, DPWT shall send a notice regarding

the disposition to the County Council and to appropriate County and Outside Agencies. The

advertisement and Notice shall include the following:

Terms of Sale

Compensation

Purchaser

Proposed use

Legal Description

Opportunity shall be given for objections thereto. Severability

The provisions of these regulations are severable and if any provision, clause, sentence, section,

word or part thereof is held illegal, invalid or unconstitutional or inapplicable to any person or

circumstances, such illegality, invalidity or unconstitutionality, or inapplicability shall not affect or

impair any of the remaining provisions, clauses, sentences, sections, words or parts of these regulations

or their application to other persons or circumstances.

(Administrative History: Reg. No. 31-97; Dept.: Public Works and Transportation; Supersedes: Reg. No.

67-91

Mf)



Page 1 of 1

Faden, Michael

From:

Sent:

To:

Cc:

Subject:

McMillan, Linda

Friday, March 09, 20124:04 PM

Dise, David E.

Brenneman, Cynthia; Boucher, Kathleen; Faden. Michael; Mihill. Amanda

Information Request· Bill 11·12. Property Disposition

Importance: High

Hello,

As you are aware. Bill 11-12, County Property - Disposition, is scheduled to be introduced at next Tuesday's (March 13th)

Council session. The public hearing is scheduled for March 20th at 1 :30 p.m. The GO Committee will have a

worksession as a part of their March 26th (2:00 p.m.) session.

The bill as drafted would apply to the sale of property with a value of less than $100.000 or a lease for a term of 3 years or

longer or lease with an option to buy where the real property being leased has a value of less than $100,000. In order for

the Council to have a better understanding of how this bill would have impacted sales and leases in the last 3 years, I am

requesting the following information:

(1) A list of all land sales that occured in 2009, 2010, and 2011 and the sales price.

(2) A list of all leases with a term of 3 or more years that were executed in 2009, 2010, and 2011 and the value of

the real property that was leased.

(3) A list of all leases with an option to buy that were executed in 2009, 2010, and 2011 and the value of the real

property that was leased.

The information can be provided by calendar year or fiscal year if one is easier that the other, as long as it is the same for

all three responses.

In addition to those transactions included in the draft bill. Council staff understands that the County alliows private entities

to use County property (land and/or facilities) through a license. Please provide a description of what such a license is.

when it is used, the process for issuing such a license, and where it is authorized in law or regulation. I have not been

able to find such a mechanism in COM COR 11B.45.01

With regard to leases, I also note that the definition of a lease in COM COR is "a contract for use of a site. other than a

splinter parcel, for five years or more." I do not see such a definition in the Code (but might be missing it.) Is it current

practice that any "lease" arrangement is for a period of 5 years or more?

It would be most helpful if you could send a response by the end of the day on Thursday, March 15th so that it can be

included in the packet for the public hearing that will be distributed on March 16th. If March 15th is not workable, we do

need to have the information by the end of the day on Tuesday, March 20th so that it may be included in the GO

Committee packet that will be distributed on March 22nd.

I am hopeful that there is a central source in Finance or Procurement for this information. If you have questions or

problems with meeting this request. please call or a.mail me or Mike Faden.

Thanks,

Linda

Linda McMillan

Senior Legislative Analyst

Montgomery County Council

linda.mcmillan@montgomerycountymd.gov

240-777 -7933

3116/2012