1. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 Surplus Property Disposition: How to Win the Game for Your Agency... And Stay Out of Jail John C. Murphy, Esq. Emily L. Madueno, Esq. Murphy & Evertz LLP June 13, 2011

2. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 EMINENT DOMAIN IN THE MOVIES ● Eminent Domain (December, 1991) ● The Hitchhiker’s Guide To The Galaxy (April, 2005)

3. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 The Bells of St. Mary’s (1945)

4. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 Blazing Saddles (1974)

5. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 American Outlaws (2001)

6. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700

7. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 UP (May, 2009)

8. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700

9. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 GOALS 1. What is Surplus Property? 2. What Policies Govern Surplus Property Disposition? 3. What are the Costs and Benefits of Such Disposition?

10. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 “Surplus Property” Defined “The term ‘excess property’ means property under the control of a federal agency that the head of the agency determines is not required to meet the agency’s needs or responsibilities.” (40 U.S.C. § 102(3).)

11. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 “Surplus Property” Defined “Excess land is real property, title to which is vested in the State of California, Department of Transportation, and which is determined and certified to be not required for rights of way or other operational purposes of the Department.” (California Department of Transportation Right-of-Way Manual, § 16.01.03.01.)

12. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 “Surplus Property” Defined “The Board will adopt a resolution with respect to each parcel of surplus property declaring: (a) That the property is no longer needed by the district.” **“Open and inclusive public input process” (Portland Public Schools, Board Policy, 8.70.040-P)

13. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 “Surplus Property” Defined “A City owned property may become available for sale if: – The property is not currently used by a City department or does not support a municipal function. – The property is vacant and has no foreseeable use by City. – The property is a non-performing or under- performing asset and greater value can be generated by its sale. – Significant economic development opportunities can be generated by selling the property.” ** Presented to City Council for approval (City of San Diego, California, Council Policy)

14. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 Surplus Property 2 Common Elements: ● Property no longer necessary for agency’s purposes or use ● Requires determination by agency’s governing body to designate as surplus

15. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 How Property Becomes Surplus Uneconomic Remnant Downsized Projects Vacated Buildings and Land Tax Delinquencies Donation Abandoned Right-of-Way

16. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 Methods of Disposal Internal transfer within the agency Sale to other agency Public sale (auction; sealed bid; etc.) Direct sale to private entity/individual Lease Exchange

17. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 Risks of Holding Onto Surplus Property Public Discontent

18. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 “Along the way, Caltrans used eminent domain to buy thousands of homes and businesses it didn’t need, holding onto them for decades.”

19. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 Risks of Holding Onto Surplus Property Public Discontent Management Headaches Quick Disposal Required

20. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 Risks of Disposing Of Surplus Property Public Discontent

21. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 “Three men were arrested this morning in San Bernardino County in a $102 million bribery scheme. A fourth, former Supervisor Paul Biane, remains a fugitive from justice.”

22. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 Risks of Disposing Of Surplus Property Public Discontent Changed Circumstances Required Procedures

23. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 Benefits of Disposing Of Surplus Property Funds to use on other projects Facilitate a deal with the owner of property to be acquired - - exchange Urban renewal; Facilitate Development Reduce headache of property management Reduce cost of maintaining properties Return property to the tax rolls

24. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 Adopting Surplus Property Regulations Where None Exist ● Streamlined Process For Disposition ● Uniformity & Efficiency in Agency Disposition ● Creating a Safe Harbor Against Charges of Corruption?

25. www.murphyevertz.com 650 Town Center Drive, Ste. 550, Costa Mesa, CA 92626 (714) 277-1700 CONCLUSION