Substitute For

SENATE BILL NO. 685

A bill to authorize the state administrative board to convey a parcel of state-owned property in Kent County; to prescribe conditions for the conveyance; to provide for powers and duties of state departments in regard to the property; and to provide for disposition of revenue derived from the conveyance.

the people of the state of michigan enact:

Sec. 1. Before 2 years after the effective date of this act, the state administrative board, on behalf of this state, may convey to Kent County, for not less than fair market value as determined under section 3, or for less than fair market value subject to the restrictions under section 5, all or any portion of property now under the jurisdiction of the department of state police and located in the township of Grand Rapids in Kent County, described as:

All that part of the West 1/2 of the Southeast 1/4, Section 20, Town 7 North, Range 11 West, Grand Rapids Township, now City of Grand Rapids, Kent County, Michigan, more particularly described as: Commencing South 1° 30' West 1030.85 feet and South 87° 55' East 40.0 feet from the center of said Section 20, thence North 1° 30' East along the East line of Fuller Avenue 175.0 feet; thence North 54° 05' East 305.0 feet; thence South 87° 09' East 240.0 feet; thence South 1° 7' West 360.0 feet; thence North 87° 55' West 485.0 feet to the Point of Beginning, containing 3.49 acres of land, more or less.

Sec. 2. The description of the property in section 1 is approximate and for purposes of the conveyance is subject to adjustments as the state administrative board or the attorney general considers necessary by survey or other legal description.

Sec. 3. The fair market value of the property described in this act must be determined by an appraisal based on the property's highest and best use, as prepared by an independent fee appraiser.

Sec. 4. If Kent County fails to purchase the property described in section 1 within 2 years after the effective date of this act, the department of technology, management, and budget may take the necessary steps to convey the property to another purchaser using any of the following methods:

(a) Competitive bidding designed to realize the best value to this state, as determined by the department of technology, management, and budget.

(b) A public auction designed to realize the best value to this state, as determined by the department of technology, management, and budget.

(c) Use of real estate brokerage services designed to realize the best value to this state, as determined by the department of technology, management, and budget.

(d) A value for value conveyance negotiated by the department of technology, management, and budget designed to realize the best value to this state. In determining whether value for value consideration for the property represents the best value, the department may consider the fair market value, or the total value based on any positive economic impact to this state likely to be generated by the proposed use of the property, especially economic impact resulting in the creation of jobs or increased capital investment in this state.

(e) Offering the property for sale for fair market value to a local unit or units of government.

(f) Offering the property for sale for less than fair market value to a local unit or units of government subject to the terms set forth in section 5.

(g) Transferring jurisdiction of the property to the state land bank authority created under section 15 of the land bank fast track act, 2003 PA 258, MCL 124.765, and renamed under Executive Reorganization Order No. 2019-3, MCL 125.1998. If the property is transferred under this subdivision, the state land bank authority is responsible after the transfer for the proper care, maintenance, and security of the property.

Sec. 5. Any conveyance of the property described in this act for less than fair market value must provide for all of the following:

(a) The property must be used exclusively for public purposes and if any fee, term, or condition for the use of the property is imposed on members of the public, or if any of those fees, terms, or conditions are waived for use of the property, all members of the public must be subject to the same fees, terms, conditions, and waivers. On termination of the property's exclusive use for public purposes, this state may reenter and repossess the property, terminating the grantee's estate in the property.

(b) If the grantee or successor disputes this state's exercise of its right of reentry and fails to promptly deliver possession of the property to this state, the attorney general, on behalf of this state, may bring an action to quiet title to, and regain possession of, the property.

(c) If this state reenters and repossesses the property, the state is not liable to reimburse any party for any improvements made on the property.

(d) The local unit of government shall reimburse this state for requested costs necessary to prepare the property for conveyance.

(e) If the local unit of government intends to convey the property within 30 years after the conveyance from this state, the local unit shall provide notice to the department of technology, management, and budget of its intent to offer the property for sale. The department of technology, management, and budget shall retain a right to first purchase of the property at the original sale price within 180 days after the notice. If this state waives its first refusal right, the local unit of government shall pay to this state 100% of the difference between the sale price of the conveyance from this state and the sale price of the local unit's subsequent sale to a third party.

Sec. 6. A conveyance or jurisdictional transfer of the property described in this act must include all surplus, salvage, and scrap property or equipment remaining on the property on the date of the conveyance or jurisdictional transfer.

Sec. 7. Any conveyance authorized by this act must be by quitclaim deed, or in the case of transfer to the state land bank authority, by affidavit of jurisdictional transfer as approved by the department of attorney general.

Sec. 8. This state shall not reserve oil, gas, or mineral rights to the property conveyed under this act. However, a conveyance authorized under this act must provide that, if the purchaser or any grantee develops any oil, gas, or minerals found on, within, or under the conveyed property, the purchaser or any grantee shall pay this state 1/2 of the gross revenue generated from the development of the oil, gas, or minerals. This payment must be deposited in the general fund of this state.

Sec. 9. This state reserves all aboriginal antiquities including mounds, earthworks, forts, burial and village sites, mines, or other relics lying on, within, or under the property with power to this state and all others acting under its authority to enter the property for any purpose related to exploring, excavating, and taking away the aboriginal antiquities.

Sec. 10. The net revenue received from the sale of property under this act must be deposited in the state treasury and credited to the general fund. As used in this section, "net revenue" means the proceeds from the sale of the property less reimbursement for any costs associated with the sale of the property, including, but not limited to, administrative costs, including employee wages, salaries, and benefits; costs of reports and studies and other materials necessary to the preparation of sale; environmental remediation; legal fees; and any litigation related to the conveyance of the property.