Agenda Item 18
March 20, 2012
Public Hearing
County Council
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
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
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.
With certain minor exceptions; see ©2, lines 21-22.
See new subsection (b) on ©2, lines 20-27.
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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
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
(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
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
Investors Funding Corporation,
270 Md. 403.
IOSee 58 Md. App. at 53-54.
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surplus property .. .is designed to insure fairness and to prevent arbitrary and discriminatory
The Court in
went on to say:
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;
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
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
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
CSA opinion
Current County property disposition regulation
Information request to Executive staff
F:\LAW\BILLS\1211 County Property\PH Memo.Doc
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Expedited Bill No.
..!..!....-!..=._ _ _ __
Draft NO.4
March 13. 2012
September 13, 2013
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date:
_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
By: Councilmembers Leventhal and Eirich, Council President Berliner,
and Councilmembers Andrews, Riemer, and Navarro
modify the procedures to dispose of County property;
require the County Council to approve certain dispositions of certain County
properties; and
generally amend the County law regarding disposition of County property.
By amending
Montgomery County Code
Chapter 11B, Contracts and Procurement
Section 11 B-45
[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:
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is amended as follows:
Disposition of real property.
The County Executive must adopt regulations to establish a process for
the disposition of any real property owned or controlled
the County,
other than surplus school facilities and [other] property of nominal value
identified in the regulation. As used in this Section, "disposition" means
lease or license for
term of
years or longer, or
lease or
other document which includes an option to buy. The regulations must
provide for:
coordination among public agencies, including any [municipal
corporation] municipality in which the real property is located;
opportunity to reserve property for alternative public use;
comparative analysis of reuse proposals before any disposition
actions; and
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
Before the disposition of any real property owned or
County (other than
property which has either nominal value or an
appraised value lower than $100,000) becomes final, the County
resolution adopted after the Council holds
with at least 15 days advance notice, must approve:
public hearing
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
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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:
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
Roger Berliner, President, County Council
Isiah Leggett, County Executive
This is a correct copy o/Council action.
Linda M. Lauer, Clerk of the Council
f:\Iaw\bills\1211 county property\1211 bill4.doc
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Expedited Bill 11-12
County Property
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.
f:\law\bills\1211 county property\legislative request report.doc
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Page 1 of2
Faden, Michael
Hansen, Marc P.
Thursday, March 08, 201210:48 AM
Faden, Michael
FW: Bill 11-12, County property disposition
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.
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
by enacting an
Inlet Associates
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."
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
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
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Page I
No. 682, September Term, 1983
Court of Special Appeals of Maryland
58 Md. App.
41; 472
A.2d 104;
Md. App. LEXIS 301
March 8,1984
Executive of Prince George's County to execute a deed of
conveyance to Silverman.
On appeal the County raises three issues for our
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
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
Russell W. Shipley, with whom were Steven
and Shipley, Curry
Taub, P.A., Landover on the brief,
for appellee.
JUDGES: Moylan, Liss and Bell, JJ.
[*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
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
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.
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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
George's County Code requires the County
Executive to inventory surplus property for approval by
the County Council
he disposes of it, in all of the
40 to 50 surplus property dispositions, the County
Executive first secured
a bona fide
transferee/purchaser and
submitted the matter
to the council for approval. In all cases
Marton Tract, the council approved the sale of the surplus
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
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
During April of 1981, the County Executive
prepared the proposed list of surplus property
dispositions, designated as Resolution CR-63-l98l,
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
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
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).
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
reacquire the property from 10 to 15, 25, or 40 years.
(Note -- Section 2-111.1 was in fact amended on
June 23,1982 to extend the period to 25 years.)
When Silverman filed the instant action to enforce
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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
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
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
Freeman Assoc.,
Md. 70,
74. 376
A.2d 860
See also; Montgomery County
Woodward and Lothrop, 280 Md.
483 (1977);
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
County Comm'r for
Prince George's County,
454, 463, 267
A.2d 172
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
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.
Court, of
Appeals held in that case that a comprehensIve rezonmg
plan bearing a substantial relationship
the pub,Ii: health
and welfare enjoys a strong presumptIOn of valIdIty, and
that the motives, wisdom, or propriety of a municipal
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
691, 337
712 (1975) in support,
which holds that the motives, wisdom or propriety of a
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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
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.
the case at
bar, however, the consideration of the Marton Tract
involved the council in a quasi-judicial capacity.
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
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.
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
of the public
purpose, in accordance with the following
(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
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
to the mandate, the
General Assembly enacted the "Express Powers Act",
codified in
Article 25A of the Annotated Code of
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.
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
owned surplus property in accordance
with the requirements of Section 2-111.1.
Legislative Branch
Subsection (S) of the Express Powers Act,
25A, ofthe Maryland Code
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
proper in
executing and enforcing any of the powers
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
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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
Montgomery Citizens League
Greenhalgh, 253
151, 161,252
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.
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
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.
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
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
Mayor and
Council of Baltimore, 165
128, 166
A. 407
(1933) in support, which states at p.
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
Sections 53, 61, 76.
The County further urges that the 45 day provision
(2)· The prOViSlOn requiring
Council approval that properties are in fact
surplus is likewise a necessary
and proper exercise of legislative checks
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
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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 .•
76, 251
A.2d 839
(1969); Kahn v. Janowski,
60 A.2d 519
At the outset [***17] we note that although the facts
American Medicinal Spirits, supra,
appear similar to
those of this case, we find the reliance by the County
thereon misplaced. In
American Medicinal Spirits,
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.
224, 434
option is not a mere offer to sell, but is a
binding agreement if supported by consideration.
251, 72
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,
514, 278
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
A contract is formed when an unrevoked offer made
by one person is accepted by another.
"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
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
Baltimore County, [***20]
470 A.2d
1322 (1983) citing
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,
538, 346
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
Md. 402, 409,
A.2d 1090
Envelope Co. v. Baltimore Post Co.,
163 A.
688 (1933).
Judge Adkins, writing for this Court in
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
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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
County offered to purchase the property. The agreement
between Baltimore County
and County Mutual
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
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
Md.App., 470
there could be no binding or enforceable
contract until approval by the County
Council had occurred. Therefore, what
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
(Emphasis supplied).
The Baltimore County Charter
715 stated in
pertinent part:
... Any contract ... must be approved
by the County Council before it is
executed if the contract is
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
County did not constitute an offer.
Rofra, Inc.,
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
declared Silverman the successful bidder.
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
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
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,
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
Michael v. Towers,
114, 117,
878 (1969), quoting
Kemp v. Weber, 180 Md. 362,
24 A.2d
(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.
69, 76, 327
477-481 (1974).
See also, Bagel Enterprises, Inc. v. Baskin and Sears, 56
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Page 8
58 Md. App. 41, *59; 472 A.2d 104, **113;
1984 Md. App. LEXIS 301, ***24
184, 467
533 (1983). The Court of Appeals
150 A.2d 243
(1963) elaborated on this principle, stating at p.
A.2d 243:
A right to rescind, abrogate, or cancel a
contract must be exercised promptly on
discovery of the facts from which it
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
must have changed his position for the worse,
having believed and relied upon the representations of the
party sought to be estopped.
161, 171, 416
(1980); Neuman
Indemnity Co.,
636, 654, 319
522 (1974);
First National Bank,
283 A.2d 570
Md. 316,
319, 216
521 (1966). This Court in
Md.App. 100, 330 A.2d
722 (1975)
elaborated on the principle stating at p. 123,
330 A.2d
[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
but also when the conduct,
apart from it morality, has the effect of
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
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.
light of
the above, the County is estopped from invoking a
defense based on the 45 day provision.
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
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
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
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.
certainly would be "inequitable
and unconscionable" to allow the County now to assert
this defense.
:':>:'. ,-:
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wCOMCOR IlB.45.01 Disposition
of Real
llB.45.01.01 Purpose
1.0 To provide policies and procedures whereby disposition is made of certain County- owned real
IllB.45.01.02 Applicability
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
. D. sites, generally, which are leased for under five years, or splinter parcels which are leased for
any length oftime.
llB.45.01.03 Defmitions
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.
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
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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.
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
SALE BY PUBLIC AUCTION - A public sale conducted by an auctioneer.
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.
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.
action taken by the County Executive, via an Executive Order, to
defer further disposition actions on the site in question:
in order that the site may be used in accordance with an approved Master Plan,
pending determination ofthe site's suitability for a project contained in an adopted Capital
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.
TAX SALE PROPERTY - Property acquired by the County as a result of non-payment of taxes.
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,
ter11 bcontractsand rocur...
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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.
llB.4S.01.0S Responsibilities and Authority
5.0 Contract Review Committee (CRC) shall approve for compliance with law and Executive
the method of disposition,
the Request for Proposals, and
the contracts for sale of surplus real property.
County Attorney's Office shall
deeds, contracts, leases, and forms as to form and legality;
approve the use of outside counsel, and
assist in contract negotiation as needed.
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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
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
participate in the Preliminary Reuse Review, and
review and comment on Reuse Analyses.
Chief Administrative Officer (CAO)or his designee shall
approve and sign all options, contracts, and leases; and
approve the Reuse Analysis for referral to the County Council, the Planning Board, and the
general pUblic.
County Executive
A. shall execute all deeds of conveyance, covenants, and restrictions incidental to the transfer of
property by the County.
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
A. be responsible for Bids and Requests for Proposals and review all contracts for sale for
compliance with law and Executive Regulations.
landlcomcorlcha ter 1 contractsand r
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The County Council shall
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:
Appraisal services
Legal services
Engineering and/or architectural services
Newspaper and other media services
Installation of public facilities
General planning/consulting services
llB.45.01.07 Inventory
of Real
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
Step 1 - Preliminary Review
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.
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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.
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
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.
Step 2 - Secondary Review (Agencies}
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.
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.
Step 3 - Reuse Analysis
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:
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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4. All reuse options identified by DPWT or by others to this point, with the advantages and
disadvantages of each.
Recommendations by DPWT.
DPWT recommends that the site be transferred to any Outside Agency, the appraised fair
market value shall be included in the Reuse Analysis.
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.
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
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
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
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Page 8 of23
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.
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.
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:
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.
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:
Minimum price competition
Sealed bids
Fixed price
Direct Negotiation
Reuse Competition
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Page 90f23
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.
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.
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:
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.
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.
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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.
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
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.
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.
Contract Negotiation
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.
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.
is normally between 5% and 15% ofthe purchase price.
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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.
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
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.
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Faden, Michael
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
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.
Linda McMillan
Senior Legislative Analyst
Montgomery County Council
240-777 -7933