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Outside Section 78


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Disposition of State Surplus Real Property

SECTION 78.   (a) For the purposes of this section, the following terms shall have the following meanings, unless the context clearly requires otherwise:

"Commissioner", the commissioner of the division of capital asset management and maintenance.

"Division," the division of capital asset management and maintenance.

"MassDevelopment", the Massachusetts development finance agency.

"Net cash proceeds", all payments paid to the commonwealth as and when paid, less any expenses incurred by the division in connection with the custody, preparation of the surplus property and reasonable costs relating to the sale, for which it is not reimbursed, and less any amounts that may be owing to the federal government as a result of this disposition.

"Real property", as defined in section 39A of chapter 7 of the General Laws.

"State agency", as defined in said section 39A(v) of said chapter 7.

"Surplus land coordination committee", or the "committee" established by subsection (e).

"Surplus real property", real property of the commonwealth: (1) previously determined to be surplus to current and foreseeable state needs pursuant to sections 40F or 40F of said chapter 7, or (2) determined to be surplus to current and foreseeable state needs pursuant to this section or to section 548 of chapter 26 of the acts of 2003. This term shall not include property subject to Article 97 of the Amendments to the Constitution.

(b) Notwithstanding sections 40E to 40F, inclusive, and 40H of said chapter 7, or any other general or special law to the contrary, the commissioner may sell, lease for a term not to exceed 99 years, transfer or otherwise dispose of surplus real property of the commonwealth, as specified in this section.

(c) In order to determine if specified real property is surplus to the current and foreseeable needs of the commonwealth, the commissioner shall provide written notice and inquiry to the executive heads of state agencies and secretaries of the executive offices, who shall have 30 days to submit a written response indicating that the property is necessary for a specific current or foreseeable need of such agency. If no agency or executive office submits such a response within 30 days of the notice, the commissioner, in consultation with the surplus land coordination committee, may declare the property as surplus and dispose of it in accordance with this section. Alternatively, if a written response is timely received specifying a current or foreseeable need for the real property, the commissioner shall, in consultation with the secretary of administration and finance and with those responding affirmatively, determine whether the real property shall: (1) be made available for current use by a state agency, (2) be retained on account of a foreseeable use by a state agency, or (3) be declared surplus real property which may be disposed of pursuant to this section.

(d) When real property is determined to be surplus to current state needs but not to foreseeable state needs, the commissioner shall take such necessary action to ensure that any disposition of the real property is temporary and maintains the commissioner's ability to make such real property available to a state agency as needed.

(e) To facilitate inter-departmental communication within the executive branch concerning surplus property, there shall be a surplus land coordination committee. The committee shall consist of the secretary or designee of the executive office of environmental affairs, the secretary or designee of the executive office for administration and finance, the director or designee of the department of housing and community development, the commissioner or designee of the division, the president or designee of MassDevelopment, the executive director or designee of the Massachusetts municipal association and the executive director (or designee) of the Massachusetts association of regional planning agencies. The committee shall meet at least quarterly and shall advise the commissioner on the potential uses for the surplus property, including its suitability for housing or other development or preservation as open space, its economic development potential and what restrictions, if any, should be considered on its use and development. The committee may request that the MassDevelopment draft an economic development suitability analysis which shall include an analysis which considers the economic potential of the property, anticipated real estate and other applicable tax revenue to the commonwealth and the municipality in which the property is located, the estimated impact on commonwealth employment and other economic growth indicators. The economic development report for a parcel shall be delivered to the committee and the commissioner within 45 days after the request for such report. For preparing each economic development report, MassDevelopment shall be paid an amount equal to 1 per cent of the net cash proceeds from the sale of the property which is the subject of the economic development report.

For parcels greater than 2 acres in size or when the committee considers it otherwise necessary for any particular parcel, the division shall conduct, within 45 days, a smart growth review. Such review shall consider the need for a variety of housing options, jobs and open space; current and prospective zoning of the site; the need for municipal capital facilities and public uses, impact of traffic and transit; impact on the environment and natural resources and on agricultural lands; existence of historically significant structures; availability of infrastructure, including water supply, waste water and storm water run-off; fiscal impact of development on the municipality where the parcel is located; remediation of contamination; other smart growth implications, and the local and regional implications of disposing of the parcel for a variety of prospective uses. The division shall undertake this review and submit a draft report to the committee. The committee must complete its review and comment on the draft smart growth review and the economic development report within 30 days of receipt of the review by the division. Following review and comment by the committee, the division shall complete the smart growth review and file a final report with the committee and with the joint committee on bonding, capital expenditures and state assets and with the officials referenced in subsection (f), which shall include its recommendations as to the proposed disposition of said property.

For any parcel less than 25 acres in size, the commissioner may proceed to dispose of it in accordance with this section. For any parcel equal to or greater than 25 acres in size, the commissioner may dispose if it after one year from the date of the filing of the smart growth review, unless within such time period special legislation has been enacted directing the terms and conditions of the disposition or transfer of such parcel, in which case the commissioner shall proceed in accordance with such legislation.

(f) If the commissioner, in consultation with the committee, determines that the real property is surplus, the commissioner shall: (1) provide written notice for each city or town in which the property is located to the city manager in the case of a city under Plan E form of government, the mayor and city council in the case of all other cities, the chairman of the board of selectmen in the case of a town, the county commissioners, the regional planning agency and the members of the general court representing the city or town in which the property is located as well as surrounding cities or towns; (2) declare it available for disposition and identify any restrictions on its use and development necessary to comply with the policies and principles established by the commonwealth development coordinating council, established in section 8B of chapter 6A of the General Laws, and to take into consideration other established state and local plans and policies; (3) conduct a public hearing in the municipality in which the property is located if the property parcels exceeds 2 acres or if the commissioner determines or the city or town in which the property is located requests that a hearing should be held for a smaller parcel. The commissioner shall provide reasonable public notice in advance of the hearing, which shall be convened to consider potential reuses and appropriate restrictions, as well as to consider smart growth issues; and (4) ensure that any deed, lease or other disposition agreement sets forth all such reuse restrictions, and provides for effective remedies on behalf of the commonwealth, which may include, in the event of a failure to comply with the reuse restrictions by the grantee, lessee or other recipient, that such title or lesser interest as may have been conveyed shall, upon recordation of a notice of exercise, immediately revert to the commonwealth.

(g) The commissioner shall establish the value of surplus real property using customarily accepted appraisal methodologies. The value shall be calculated both: (1) for the highest and best use of the property, and (2) subject to uses, restrictions and encumbrances defined by the commissioner.

(h) Before disposing of the surplus property, the commissioner shall provide to each city or town in which the property is located a written right of first refusal to purchase the surplus property for municipal use on the conditions established in section (f) and at 85 per cent of the value established in subsection (g). The commissioner shall have the authority to accept a flexible payment schedule at his discretion. This right of first refusal must be exercised, if at all, by the town or city, or its permitted assignee as set forth below, within 30 days after this notice by giving written notification of its intention to exercise its right of first refusal to the commissioner, provided, however, that the city or town may condition its exercise upon the holding of a vote for debt exclusion pursuant to section 21C of chapter 59 of the General Laws, commonly known as a Proposition 2-1/2 debt exclusion, to finance the surplus real property purchase, within 150 days after the date of the written notification of the city's or town's intention to exercise its right of first refusal. The city or town, or such assignee, shall have until (1) the date which is 45 days after the date of the vote for debt exclusion, if the city or town conditioned its exercise of its right of first refusal upon such vote, or (2) the date which is 90 days after the date on which the commissioner gave written notice of its right of first refusal to the city of town, if the city or town did not condition its exercise of its right of first refusal upon such vote, to close the purchase of the property. If the city or town, or such assignee, fails to close the purchase of such property within that time, the sole remedy of the commonwealth against the city or town for this failure shall be to proceed with the disposition of the surplus property without further right of purchase by the city or town and the elimination of any requirement to share proceeds of the sale with the city or town as provided in subsection (p).

The municipality shall also be able to assign its right of first refusal as established pursuant to subsection (h) to a nonprofit public benefit corporation that has a primary mission to build housing or protect open space, or to a community development corporation, as determined in regulations promulgated by the commissioner. If the municipality or its assignee acquires any portion of the property for open space purposes, or if any portion of the property is restricted for open space purposes, a conservation restriction pursuant to chapter 184 of the General Laws shall be retained by the commonwealth on such parcels.

(i) If the city or town has not exercised its right of first refusal, or if the city or town, or its permitted assignee, has failed to close in a timely manner if such right was exercised, the commissioner shall dispose of surplus real property utilizing appropriate competitive processes and procedures. Such competitive processes may include, but are not limited to, absolute auction, sealed bids and requests for price and development proposals. At least 30 days before the date of an auction or the date on which bids, proposals or other offers to purchase or lease surplus real property are due, the commissioner shall place a notice in the central register published by the state secretary pursuant to section 20A of chapter 9 stating the availability of such property, the nature of the competitive process and other information deemed relevant, including the time and location of the auction, the submission of bids or proposals and the opening thereof.

(j) The commissioner shall place a notice in the central register identifying the individual or firm selected as party to such real property transaction, along with the amount of such transaction. If the commissioner accepts an amount below the value calculated under subsection (g), he shall include the justification therefor, specifying the difference between the calculated value and the price received.

(k) No agreement for the sale, lease, transfer or other disposition of surplus real property and no deed executed by or on behalf of the commonwealth, shall be valid unless such agreement or deed contains the following certification, signed by the commissioner:

"The undersigned certifies under penalties of perjury that I have fully complied with section ___ of chapter___ of the acts of 2006 in connection with the property described herein."

(l) No agreement for the sale, lease, transfer or other disposition of surplus real property shall be valid unless the purchaser or lessee has executed and filed with the commissioner the statement required by section 40J of chapter 7 of the General Laws.

(m) The grantee or lessee of any surplus real property shall be responsible for all costs including, but not limited to, appraisals, surveys, plans, recordings and any other expenses relating to the transfer, as shall be considered necessary by the commissioner.

(n) This section shall not apply to the disposition of real property that is the subject of a special act having an effective date before the effective date of this act.

(o) The authority granted to the commissioner by this section shall cease as of June 30, 2010, but the commissioner may complete any transaction for which agreements have been signed and delivered on or before that date.

(p) Funds from the net cash proceeds of dispositions of surplus property pursuant to this section shall be allocated as follows: (1) 10 per cent of the net cash proceeds of each transaction shall be paid to the city or town in which the property is located if the city or town did not exercise its right of first refusal, whether or not the transaction thereafter closed; but that city or town may receive up to a total 25 per cent of the net cash proceeds of a transaction if the municipality has taken affirmative actions in furtherance of the commonwealth's objectives for the parcel, consistent with smart growth and subject to regulations promulgated by the division in consultation with the commonwealth development coordinating council; (2) after distribution of net cash proceeds to cities and towns pursuant to clause (1), the first $5 million shall be deposited in the General Fund; (3) 50 per cent of the next $20 million shall be deposited in the Smart Growth Housing Trust Fund established in section 35AA of chapter 10 of the General Laws, and 50 per cent shall be deposited in the General Fund; and (4) the remaining net cash proceeds shall be deposited 20 per cent into the Smart Growth Housing Trust Fund and 80 per cent into a separate fund on the books of the commonwealth to be known as the Capital Projects and Maintenance Fund to be expended, without further appropriation, by the commissioner upon approval by the secretary of administration and finance. Monies deposited into the Capital Projects and Maintenance Fund shall be allocated to the respective agency or agencies whose facility or facilities generated the proceeds deposited into the fund and shall be expended exclusively for one-time capital projects, maintenance and repairs to such agency's facilities. The books and records of said fund shall be subject to a biennial audit by the state auditor. No expenditure from said fund shall be permitted if it shall cause said fund to be in deficiency at the close of a fiscal year.

Nothing in this section shall be construed to grant to any municipality or other third party the right to participate in the negotiation, execution, or enforcement of any agreements between the division and a purchaser or lessee of surplus property.