Chapter 4.20

PROCEDURE FOR SELLING CITY-OWNED PROPERTY*

Sections:

• 4.20.010 Definitions.

• 4.20.020 Sale of real property - Requirements for notice of sale and price.

• 4.20.030 Direct negotiations for sale of property.

• 4.20.040 Competitive process required; payment of brokers.

• 4.20.050 Conveyance by exchange.

• A. Notwithstanding the other provisions of this chapter, the chief of police is authorized to determine the disposition of surplus firearms by any of the following methods that best serves the interests of the city, including: (1) sale to a law enforcement agency; (2) sale to an authorized firearms retailer; (3) sale to an active sworn member of the police department; or (4) destruction if no safe alternative is available. The disposition of the surplus firearms shall be in compliance with applicable state or federal requirements.

• B. Notwithstanding the other provisions of this chapter, the chief of police is authorized to determine the disposition of police service dogs including: (1) sale of the police service dog to the assigned police officer when the officer leaves the canine unit; (2) donation of the police service dog to the assigned police officer if the police service dog can no longer perform its required duties; or (3) any other method that best serves the interests of the city.

• (Ord. 29181.)

• 4.20.060 Surplus real property acquired by gift.

• 4.20.070 Sale of surplus real property and buildings to adjacent property owner.

• 4.20.080 Conveyance of property to government bodies, public utilities, and certain nonprofit corporations.

• 4.20.090 Sale of pueblo lands - Procedures - Form of application to purchase.

The definitions set forth in this Section shall govern the application and interpretation of this Chapter.

• A. Appraisal. "Appraisal" means an appraisal of fair market value conducted by a qualified real estate appraiser, who may be a professional appraiser or a qualified employee of the City.

*Editor’s note— Ord. 30848, § 2, approved Dec. 13, 2022, amended Ch. 4.20 in its entirety, in effect repealing and reenacting said Ch. 4.20 to read as set out herein. The former Ch. 4.20, §§ 4.20.010 - 4.20.110, pertained to similar subject matter and derived from Ords. 28803, 29245.

State law reference— For statutory provisions on the sale of surplus unimproved land, see Gov. Code § 54220.

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§ 4.20.010

• B. Auction. "Auction" means a publicly held sale conducted after public notice as specified in Section 4.20.020 below, at which sale surplus property is sold to the highest bidder, on terms and conditions as Council or the Director may direct and set forth at the time of such public notice.

• C. City Manager. "City Manager" means the City Manager or his or her designee.

• D. Competitive sales process. "Competitive sales process" means a procedure for the sale of surplus real property by the City that provides public notice of the availability of surplus property for sale, and is any one of the following methods for sale:

  1. An auction; or

  2. A request for competitive proposals, pursuant to procedures approved in writing by the Director; or

  3. A bid and negotiation, pursuant to procedures approved in writing by the Director; or

  4. Offering the property through the use of a duly licensed real estate broker selected in accordance with City's policies for hiring of consultants and applicable state and local laws pertaining to conflicts of interest, and the broker offers the property for sale pursuant to a marketing plan approved in writing by the Director.

• E. Director. "Director" shall mean the director of the City department designated by the City Manager to dispose of surplus real property.

• F. Direct negotiations. "Direct negotiations" shall mean a sale procured through negotiation, without requirement of notice of public sale or competitive process.

• G. Fair market value. "Fair market value" means the most probable price expressed in terms of money that a property would bring if offered for sale in the open mar-

ket at an arm's length transaction between a willing seller and a willing buyer, both of whom are knowledgeable concerning all the uses to which the property is adapted and for which it is capable of being used. For the sale of properties at a price greater than five hundred thousand dollars ($500,000) (as adjusted pursuant to Section 4.04.085), the estimated fair market value shall be determined by appraisal; for the sale of properties at a price less than or equal to five hundred thousand dollars ($500,000) (as adjusted pursuant to Section 4.04.085), the estimated fair market value shall be determined by either appraisal or good faith estimate.

er than five hundred thousand dollars ($500,000) (as adjusted pursuant to Section 4.04.085), the estimated fair market value shall be determined by appraisal; for the sale of properties at a price less than or equal to five hundred thousand dollars ($500,000) (as adjusted pursuant to Section 4.04.085), the estimated fair market value shall be determined by either appraisal or good faith estimate.

• H. Good faith estimate. "Good faith estimate" shall mean an estimate of fair market value prepared a qualified real estate professional or qualified employee of the City, pursuant to an administrative process approved by the City Manager and promulgated by the Director.

• I. Independently developable. "Independently developable" shall mean that the real property is reasonably capable of being developed without consolidation with adjacent property, as determined by the City Council or by City staff, which determination by staff shall be pursuant to an administrative process approved by the City Manager and promulgated by the Director.

• J. Notice of public sale. "Notice of public sale" means a written notice of availability sent to the preferred entities specified in the SLA.

• K. Surplus Land Act or SLA. The "Surplus Land Act" or "SLA," is found at Cal. Gov. Code § 54220 et seq., as may be amended from time to time, which provides the procedures and requirements that allow for local agencies to dispose of surplus real property.

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§ 4.20.010

• L. Surplus real property. "Surplus real property" means municipally-owned real property that the City Council has designated as surplus based upon its finding and determination that any such real property is not needed for, nor adaptable to, municipal purposes, or that the public interest would be served by the conveyance thereof. Such "surplus real property" shall mean "surplus land" or "exempt surplus land" as defined in the Surplus Land Act, at Cal. Gov. Code §§ 54221(b) and (f). The procedure through which real property is determined to be surplus shall be governed by an administrative process to be approved by the City Manager and promulgated by the Director.

(Ord. 30848.)

• A. Except as otherwise provided by the Charter, this Chapter or Section 4.04.020B.7. of Chapter 4.04 of this Code, and except as to the sale of Pueblo Lands for which a special procedure is provided for in Section 4.20.090, all sales of municipally- owned real property shall be accomplished: (i) by a competitive process; (ii) at fair market value; (iii) after notice to the public as may be required under the SLA; (iv) upon Council finding and determination that any such real property is surplus real property; and/or (v) otherwise upon such terms and conditions as the Council may direct and as otherwise allowed under the SLA. A sale at fair market value shall mean the sale at the estimated fair market value, unless the City Council determines that a public purpose will be served by the sale of the property at less than its estimated fair market value, or that the terms, conditions or other circumstances of the sale are reflective of the fair market value notwithstanding the estimated fair market value.

• B. The City may reject any offers it receives to purchase surplus real property, whether by auction or otherwise, for any reason allowed under the SLA.

• (Ord. 30848.)

A sale of surplus real property may be made by direct negotiations under those circumstances set forth in the Surplus Land Act and under the San José Municipal Code Sections 4.20.040B., 4.20.050, 4.20.060, 4.20.070, 4.20.080 and 4.20.090 of this Chapter 4.20.

• (Ord. 30848.)

• A. All sales of surplus real property, except otherwise permitted in this Chapter, shall be by competitive process.

• B. The Council may approve the sale of property it has found to be surplus real property by direct negotiation upon a determination that sale of such surplus real property by direct negotiation will provide the greatest public benefit or that a competitive process is impractical or impossible, and when allowed by the SLA. Such a determination may be made at the time that the Council declares property surplus real property and authorizes its disposition.

• C. In connection with the disposition of surplus real property by City, no commission, fee or other compensation shall be payable to real estate brokers except upon such terms and conditions as are approved by Council, by adopted policy, or otherwise.

• (Ord. 30848.)

In any case where the City Council determines to convey City-owned real property for a consideration which consists wholly or partially of other real property, said conveyance may be made through

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§ 4.20.080

direct negotiation, subject however, to such terms and conditions, if any, as the Council may in its discretion provide and as allowed under the SLA. (Ord. 30848.)

Whenever title to any real property was acquired at no cost or expense to the City, the Council may order that title to any portion thereof that is surplus real property be conveyed without consideration to the person or persons, or their heirs, grantees, assigns or legal successors in interest, from whom title thereto was acquired by the City; provided, however, that title to the real property adjoining or abutting said surplus real property of the City is currently vested in such person or persons, or their heirs, grantees, assigns or legal successors in interest, at the time of such order and as allowed under the SLA. (Ord. 30848.)

• A. Surplus real property for which the City has paid or given consideration of any kind may be sold to the owner or owners of property adjacent to such surplus real property through direct negotiation of such real property and when allowed under the SLA.

• B. Notwithstanding Section 4.20.070A. to the contrary and when allowed under the SLA, surplus real property for which the City has paid or given consideration of any kind may be transferred through direct negotiation with the adjacent property owner for nominal consideration where the Council determines that:

  1. The surplus real property is not usable for a municipal purpose;

  2. The surplus real property is not independently developable and would not significantly enhance the development potential of the adjacent property pursuant to Title 20 of this Code as it may be amended from time to time; and

  3. The conveyance demonstrably reduces the expense to the City of ongoing maintenance for the surplus real property.

• C. The sale or transfer of surplus real property through direct negotiation with the adjacent property owner or owners shall otherwise be subject to the terms and conditions as the Council may in its discretion provide and shall conform to the procedures set forth under the SLA.

• D. Whenever any surplus building has been acquired from a person being or having been displaced by a public project, the City Manager shall have authority to sell such surplus building to the person being displaced through direct negotiation, subject to the following:

  1. The sale price of the surplus building shall be at fair market value;

  2. The building shall be removed within the time and under the conditions which the City Manager determines are necessary to complete the public project; and

  3. The sale and procedures comply with the SLA.

• (Ord. 30848.)

• A. For purposes of this Section, the term "nonprofit corporation" means any entity which would qualify as such under the federal internal revenue code.

• B. The City Council may convey, through direct negotiation and as allowed under the Surplus Land Act, any City-owned surplus real property to any of the entities listed in this Section upon such terms and conditions, if any, as the City Council may in its discretion provide:

  1. To the United States Government or any of its departments or agencies;

  2. To any other governmental or public agency;

  3. To any public utility;

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§ 4.20.080

4. To any nonprofit corporation whose purpose is to provide housing for low and moderate income families;

5. To any nonprofit corporation whose members or directors are subject to the approval of the City Council and whose sole purpose is to assist the City in financing improvements to be leased or sold to the City;

6. To any other nonprofit corporation engaged in programs or projects which provide a direct benefit to the residents of the City; and

7. To any other agency or entity required to receive notice of the proposed sale of surplus real property under the SLA.

• (Ord. 30848.)

• A. All applications for the purchase of Pueblo Lands of the City shall be made in writing, giving an accurate description of the land applied for, and in the following form:

  • "Notice of application for the purchase of City Lands. Notice is hereby given that the undersigned will apply to the City Council of the City of San José, at its meeting to be held on the ________ day of , 20, for the purchase of the following described parcel of land, the same being part of the Pueblo Lands of said City, and described as follows: (Description of land.) Containing about ________ acres of land, when any and all persons interested may appear and contest said application. (Signed and dated.)"

• B. Said application shall be filed in the office of the City Clerk, provided that whenever an application is made for the purchase of any of the lands of the City lying without the corporate limits thereof, the party applying, at the time of filing his application for the purchase of such lands, shall file with the City Clerk an accurate survey and plot of the land applied

for, showing the course and distance of each line, the number of acres contained in the tract applied for, and the names of the owners or occupants of the adjoining lands; and provided, further, that all surveys shall conform to the general lines in such manner as not to leave gores or fractions between surveys, and shall be made and certified to by some competent surveyor, to be designated by the City Council, or by the county surveyor of Santa Clara County.

• C. Upon the filing of an application for the purchase of land, as heretofore provided, it is the duty of the City Clerk to furnish to the party presenting the same a copy of said application, to which he shall attach a certificate in the following form:

"I hereby certify that the above is a correct copy of an application duly filed in the office of the City Clerk of the City of San José, this day of________ day of , 20, City Clerk,"

• which said certified copy of such application shall be published in some newspaper printed and published in the City for at least three (3) weeks before the same shall be acted upon by the City Council, and written or printed copies thereof shall be posted in two (2) or more of the most conspicuous places upon the land applied for, for at least fifteen (15) days previous to the time fixed for the hearing of such application before the City Council. Proof of such publication and posting shall be made by the affidavit of the applicant.

• D. All applications for the purchase of City lands shall be referred to the City Attorney, and the applicant shall furnish him an abstract of title. If the report of the City Attorney be favorable, and no good cause be shown to the contrary, an ordinance shall be passed fixing the price of the lands to be conveyed, where any charge thereof is intended to be made, and authorizing the City Manager, on behalf of the City, to sign and acknowledge a quitclaim deed of the

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§ 4.24.015

premises mentioned in the application, to which shall be attached a certified copy of the ordinance authorizing the sale. Said deed shall be delivered to the applicant upon the payment to the clerk of the price fixed in the ordinance to be paid for the land, and the further sum of twenty dollars ($20.00) to cover the expenses of procuring the deed, including the notarial and clerk's fee, cost of examination of abstract and of publication of the ordinance authorizing the sale. The clerk, out of the money received by him, shall pay to the City Attorney the sum of ten dollars ($10.00) for examining the abstract, one dollar ($1.00) to the notary for taking the acknowledgment of the deed, retain his own fee of three dollars ($3.00) for drawing the deed, and then deposit the balance of the money in the City treasury. (Ord. 30848.)