Committee seeks oversight, preservation covenants and state first-refusal on stormwater-linked property sale

A Senate–House conference committee on Institutions and Corrections on May 20 reviewed proposed conditions for a planned state property sale that is linked in the House language to a stormwater utility. A committee member proposed four requirements: that the property be sold at a minimum of fair market value; that interior and exterior protection covenants be included as directed by the historic preservation officer; that the chairs of the House and Senate institutions committees be shown the sales contract prior to closing for oversight; and that the state retain a right of first refusal should the property be resold.

Wanda, Commissioner of Buildings and General Services, told the committee that procurement practice typically makes proposals public only after a letter of intent or an executed contract, and that while RFP language and template sales agreements could be shared in advance, fully executed contracts (including buyer names) are generally public only after signing. "Once we receive bids, they are ... not public documents until we sign a letter of intent," she said, adding that BGS could provide the RFP and typical contract templates that contain the covenants the committee wants to see.

Members pressed for clarity on the mechanics. Committee participants noted that covenants are usually included in the RFP or sales scope and asked whether fair market value would be determined and disclosed before advertising; BGS staff said fair market value is typically determined before outreach and is one tool used to evaluate bids. The group discussed that contamination or site assessments can alter a buyer's offer and therefore affect final price and responsibilities for remediation.

The committee also discussed statutory language. Members observed that removing a "notwithstanding" clause would make the usual property-sale statutes fully applicable, potentially obligating the state to offer a property to the highest bidder and otherwise follow statutory sale procedures. The transcript references Title 22 and a section noted as "743" in committee remarks; members asked staff to check the precise statutory citations.

Committee members raised questions about the scope and duration of a state right of first refusal, including whether such a right could be written into a deed or covenant and how long it would persist. BGS staff said the state would be required to pay fair market value if it exercised that right and recommended legal review to determine whether a perpetual right or deed-based covenant would be enforceable.

The committee did not take a formal vote. Members agreed to seek legal counsel to draft and review appropriate contract or deed language and to return with counsel for further discussion; they discussed reconvening at 9:00 a.m. the following morning and arranging for attorneys (including a request to reach John Ray) to be available.

The committee’s next procedural step is to obtain legal guidance on first-refusal enforceability, final statutory language and the form of any covenants, and to circulate RFP language and contract templates for committee review before any advertising or final execution of a sale.