02-14-1990 Council Agenda - Laserfiche WebLink

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Chapter 14 minable interest " In this case the city may sell the property, but the buyer's interest will terminate if the buyer uses the property for a purpose other than those mentioned in the deed to the city. 61 In some cases, the courts have said that a statement of purpose is merely an attempt to explain the reason for the conveyance and does not have legal effect. 62 A city's power to convey land which is limited to a particular purpose is a complicated legal con- sideration. 63 The council should not authorize any sale or disposition of the property without seeking the advice of its attorney and, possibly, even a court action clarifying its authority. After a planning commission or other planning agency has approved a comprehensive plan, the city may not acquire or dispose of any real property until after the planning agency has reviewed the proposal and reported its findings to the council . Failure of the agency to report back within 45 days after referral is the same as ap- proval . The council may dispense with this referral requirement when it finds, by a two - thirds vote, that the proposed acquisition or disposal has no relationship to the comprehensive plan. 64 If no bond issue is involved in a real property purchase, the statutes do not require the city coun- cil to submit the question of purchasing real property to the voters. Ordinarily, the decision is wholly one for the council . This is true whether the city has money on hand to pay for the land or purchases the property on a contract for deed, which cannot exceed five years, and where the only remedy of the seller for non - payment is reposses- sion of the property. 65 However, if the contract price exceeds one percent of the assessed valuation of the city, the city must publish, in the official newspaper, a resolution stating the intention to make such a purchase by contract. It must then wait 10 days before entering into the contract. If, in that 10 -day period, 10 percent of the voters voting in the last regular election petition for an election on the purchase, the council must submit the question at a regular or special election. In most cases, a city may buy or sell property without advertising for bids unless there is a specific bid requirement in the statutes or charter. There is no such requirement for statutory cities for real property. The law only requires statutory cities to advertise for bids for all contracts for the purchase of merchandise, materials, equipment, or for any kind of construction work which requires an expenditure of $15,000 or more. 66 The uni- form municipal contracting law excludes real property from its contracting requirements. 67 The Minnesota Supreme Court has held that a city charter requiring advertisements for bids for all contracts involving more than $250 for com- modities or services does not apply to leases of real estate. This is because there is no way of stimulating competition through a bid requirement as would be the case if the city were buying materials or supplies. 68 The same reasoning ap- plies to the purchase of real estate. It would be meaningless for a city to advertise for bids when it only wants a particular piece of property and can only obtain it through negotiating with the owner of the property. Statutory city bid require- ments do not apply to the sale of property and, consequently, councils may sell real property with- out advertising for bids. The procedure for conveying real estate is simple. If bids are not necessary, and a buyer is willing to pay what the council believes is a reasonable price, the council may pass a resolution making the sale of the property and directing the clerk and mayor to execute the necessary con- veyance. The mayor and clerk should execute the deed and seal it with the corporate seal . In the case of home rule cities, councils should follow charter requirements. If the city advertises for bids, the council should adopt a resolution direct- ing the clerk to make the advertisement and, after determining which is the best bid, it should adopt another resolution accepting the bid. It should then make a sale to the successful bidder, and direct the clerk and mayor to execute the necessary con- veyance. The resolution should provide for the dis- position of funds if they are not to go into the general fund. A statutory city may sell property on a contract for deed when the council determines that such a sale is in the best interest of the city. 69 A city may give an option to purchase even though the result may be to prevent acceptance of another offer which comes along later. Similarly, a city's power to purchase real estate by an option contract is im- plicit in its general power to purchase, even though it may lose the option payment if it fails to make the purchase. 70 The city may attach a use or other condition in its deed of conveyance in order to secure what the council reasonably conceives to be in the interest of the city. 71 In order to facilitate Handbook for Minnesota Cities Page 233 Page 94