DAN MORALES

ATTORNEY GENERAL 

## QBffice

of tfie2Mornep QSeneral %5tate of tEeme May 20, 1997

The Honorable Bill Radii chair, Fiinanceckmmittee Texas State Senate P.O. Box 12068 Austin, Texas 7871l-2068 Opinion No. DM4t 1

Be: Whether the City ofLongview is authorized to transfercity-owned property to the University of Texas for the purpose of establishing a university campus (RQ-922)

Dear Senator Ratliff:

You ask whether the City of Longview (the “city’) is authorized to transfer city-owned property to the UnivemhyofTexasSystem(WY) for the purpose of establishing a UT campus. We understand that in a 1979bond election, the voters ofthe city approved a proposition authorizing a bad issuanceforthe pumhaseoflandfor parks. The city purchased the forty-eight acre site at issue in 1985withbond proceeds. InMay 1994,the city held abond election which included aproposition fbrabondismance to improve the site as a park The voters defeated the proposition. At this time, the property is undeveloped and has never been designated or used as a park by the city. The city does not have the funds to improve the site as a park.
First, you ask about section 253.001 of the Local Government Code, which requires the governing body ofamunicipalityto obtain the approval ofthe voters before selling land owned, held,
or claimed as apublic park This office addressed section 253.001 at length in Attorney General Opinion DM-232. In that opinion, we concluded, based on case law and prior attorney general opinions, that a city need not comply with section 253.001 in order to transfer property to another governmental agency having the power of eminent domain ifthe city and the governmental agency are in accord regarding the paramount public use of the property. See Attorney General Opinion DM-232 (1993) at 2 (citingElPuw Countyv. City ofElPaso, 357 S.W.2d 783 (Tex. Civ. App.-El Paso 1962,no writ);K@svi~le Inakp.Sch.Did v. Crenshaw, 164 S.W.2d 49 (Tex. Civ. App.-San Antonio 1942,writ ref dw.o.m.); Attorney General Opinions H-1256 (1978), H-108 (1973)). The UT board of regents has the power of eminent domain to acquire land that may be necessary and proper for UT purposes. See Educ. Code $65.31(a). Therefore, we conclude on the basis of Attorney GeneralOpinionDM-232 and the authorities discus& inthat opinion that the city need not adhereto the procedures set forth in section 253.001 in order to convey the site to UT ifthe city and UT agreethat useofthe property as auniversity campus isthe paramount public use ofthe property. Whetheruse ofthe property as auniversity campus is the paramount public use is a question of fact and istherefore beyond the purview of an attorney general opinion.

We limit the foregoing conclusion with two caveats. First, we note that our analysisofthe application of section 253.001 assumes that UT has the authority to condemn the property.The Honorable Bill Radii - Page 2 (DM-441)

Education Code section 65.31(a) does not expressly authorize UT to condemn property already devoted to apublicuse. Case law suggests that the authority to condemn property already devoted to apublicusewillnot be impliedwhenthe condemnation will destroy the use to which the property has been devoted. SeeAusiiinI&p. Sch.Dist. v. Sierra Club, 495 S.W.2d 878,882 (Tex. 1973) (citingSabine &E i?Ry. Co. v. Gulf& I. Ry. Co., 46 S.W. 784 (Tex. 1898)). “The power will be implied, however, where the necessity is so great as to make the new enterprise of paramount importance to the public and itcannotbe practically accomplishd in any other way.” Id We believe UT would be well advised to make such tindings,prior to entering into an agreement with the city regarding the paramount use of the property, in order to establish its authority to condemn the property. Ofcourse, the ultimate determmation whether the necessity to establish a UT campus in Longview isofparamount public importance and the campus cannot be practically accomplished in any other way involves questions offact.

We also note that unlikethe park land at issue inAttorney General Opinion DM-232 and the authorities cited there, the site at issue here was purchased with bond proceeds. It is a wellestablished principle that when the electorate has approved bonds for a particular purpose, the goveming body that issuedthe bonds czumotarbitrarily decide to use the bond proceeds for another purpose. Hudson v. &mAntonioIndep. Sch Dist., 95 S.W.2d 673 (Fax. 1936); see also Bkzckv. i%ken@, 246 S.W. 79, SO-81(Tex. 1922) (order calling bond election and establishing purpose for whichbond pmceeds willbeused iscontract with voters).’ In the context of a dispute regarding the saleofmineralrights on landpurchased by the Cii of Beaumont for an airport with bond proceeds, the Texas Supreme Court articulated the following principle:

Smcethe cityhad acqukd the land with the proceeds of municipal bonds whichhadbeen voted and issued for the purpose of acquiring an airport, the landthus purrhad becamededicated to that purposeand the land could not beusedforanyotherpurpose~~wouldinterferewithitsuseasanairport until such use in whole or in part was lawfully abandoned by the city. City ofBeaumont v.Moore, 202 S.W.2d 448,452 (Tex 1947). A governmental agency that has calledabond election and thereat&r obtained bond proceeds dedicated to a partiatlar purpose may abandon a project only if conditions have so materially changed that proceeding with the project would be unwise and mm-. Hudwrr, 95 S.W.2d at 675. In addition, article 1015c, which authorizes a city to purchase, mortgage, and encumber various kinds of projects including parks, V.T.C.S. art. 1015c, 5 1,provides that no project under section 1ofthe article”shall ever be sold until such saleis authorized by a majority vote of the qualitkd voters of such city or to-” id. 32;
see alsoMcCoy v. Williams, 500 S.W.2d 178, 180-81 (Tex. App.-El Paso 1973, writ refd er.e.)

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(suggesting that election requirement applies to any city park, notjust one created under section 1 of article 1015c).s Although the tkct that the city obtained the site at issue with bond proceeds limits the authority of the city to use the land for other, non-park purposes, the relevant question here is whetherthis fact imposes a limitation on the authority ofUT to condemn the land. This appears to be aquestion oftirstimpremion. Onthe one hand, a court might conclude that because the land was par&ad with park bond proceeds, the city may not enter into an agreement with UT that another purposeis the paramount public use, thus excepting the conv~ce Tom Local Government Code section 253.001, until it has discharged its commitment to the voters. On the other hand, a court might conclude that the reasoning ofthe casesand attomey general opinions addressing the strictures of section 253.001 and its statutory predecessor is equally applicable to bond election-related strictures: “[G]oveming bodies with the power of eminent domain need not secure the consent of
an electorate to obtain property they need for public purposes.

_. . What [a county] might do by resort to condemnation proceedings, it can do by agreement with.

. . [a city].” Attorney General Opiion H-1256 (1978) at 2 (citations omitted). Uader~latter~~~aoourt~~concludethatthefadthatthecitypurchasedtheland at issuewithbond Smds does not atlbct the authority ofUT to condemn the land and that what UT
can do through condemnation pmceedings it should be able to do by agreement with the city. Becausetha questioti whether thebond elecrion-related lint&ions on the authority of the city to use the landfor other, non-park purposes affects the authority of UT to condemn the land appears to be
one oftirstimpmssion,however, the citywould bewelladvisedto take steps to lawlttlly abandon use ofthe land as a park prior to entering into an agreement with UT that use of the property as a UT campus is the paramount public use.’ The fhctual determhmtion that conditions have so materially changed since the 1979 bond election that use of the property as a park would be unwise and unnecessary must be made by the governing body ofthe city inthe tirst instance and is beyond the purview of an attorney general opinion.

You also ask about article III, section 52 of the Texas Constitution, which prohibits the city from granting “public money or thing of value” and requires that the city obtain adequate consideration when conveying publicproperty, and section 272.001 ofthe Local Government code, which generally requires certain political subdivisions, including cities, to sell land by a sealed bid procedure at&r public notice. Local Gov’t Code 8 272.001(a). These notice and bidding requirements do not apply, however, ifreal property is conveyed to a governmental entity that has the power ofeminent domain. Id. 3272.001(b)(5). Subsection (b) of section 272.001 provides that

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realpropertymaybewnveyedtoagovemmgdal entity that has the power of eminent domain under this exception at not less than fair market value as “determined by an appraisal obtained by the political &division that owns the land,” or, in the case of land owned by a hom*mle municipality, bythe priceobtained at public auction Id. 5272.001(b). Here, the city is authorized to convey the property to UT, a governmental entity that has the power of eminent domain, at not less than fair marketvalue. A~~submittedbythecitystatesthatthecitycsnmalreafindingthatawmmitmentbyUT

“to establish and wnstruct a localiwd campus on the property would wnstitute sutlicient consideration equivalent to the fair market value of the property.” The city contends that if such a ~canbemade,wcashwnsiderationforthelaadisrequired,citingAttornqrGeaeralOpinions H-1256 andH-108. We agree that such a GnIing would satisfy the dictates of article III, section 52 undertherationale ofthose opinions.’ We arenot wnviwed, however, that subsection (b) of section 272.001 authorizes a city to transfer real property to a governmental entity that has the power of eminent domain for the hind of consideration contemplated here.

Asnoted inAttorney General OpinionDM-232, theprovisions of section 272.001 that permit
apolitical &division to convey teal property to agovernmental entity that has the power of eminent domainwithout complying with its notice and bidding requirements but at not leas than fair market value date 6om 1985,5some years atIer this office issued Attorney General Opinions H-1256 and H-108. In Attornq General Opiion DM-232, the City ofHereford indiaed that it would tind the paramount public use ofthe property to be the expansion of the hospital district and would wnvey the property to the hospital district for no cash consideration. We concluded that the city was not authorizedto transferthe land to the hospital district for less than fair market value, suggesting that the indeterminate, nomnonetary consideration in the proposed transaction was impermissible. We wntinue to believe that suggestion is correct.
Theterm ‘Sir market value’ isnot de&d for purposes of section 272.001 and we detine it according to its common usage. Gov’t Code Q311.011 (Code Construction Act). “Fair market value” is generally defined as theprice that a willing buyer, who desires to buy, but is under no obligationto buy,would pay to awillingseller, who desires to sell,but isunder no obligation to sell. CityofParkmdv. Akmmk, 483~ S.W.2d 244,247 (Tex. 1972);Atterbwy v.Brimn, 871 S.W.2d 824,828 (Tex. App.-Texarkaw 1994, writ denied). We also note that the measure of damages in
an eminentdomainpmceeding where an entire tract or parcel of land is condemned is “local market value.” Prop. Code 521.042(b). Cases wnshuing this provision indicate that “market value” mews a &ad, asc&ai&le sum. MeItm v. We, 395 S.W.2d 426,429 (Tex. Civ. App.-Tyler, 1965, writ

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refd, n.r.e.) (“Marketvalue shouldbebasedupon reasonablecashvalue.“);Houston V.Chmpoit, 292 S.W.2d 677, 680-81 (Tex. Civ. App.-Galveston 1956, writ refd n.r.e.) (market value may be determined on basis of credit tmmaction, rather than on cash price of land).

In wnclusion, thir market value is generally understood to mean a 8x4, ascertainable sum. &cause section 272.001 isintended “to ensure that public lands will be disposed of in a manner that will iidly protect the citizemy,” exceptions to its notice and bidding requirements, such as the exception pwnhdng apolitical subdivisionto convey real property to a governmental entity with the power ofeminent domain without notice and bidding but at not less than fhirmarket value, must be narmwlyread. Ci~ojBalbv. McKiman, 726 S.W.2d 173, 176-77 (Tex App.-Dallas 1987, writ ref d n.r.e.). We do not believe that a wmmitment by UT “to establish and wnstruct a locahzed campus on the property” wnstitutes the kind of specific, ascertainable consideration required by section 272.001(b). As noted above, however, we believe that the proposed tinding regarding consideration would satisfy the dictates of article JII, section 52. For this reason, there does not appear to be any wnstitutional obstacle to amending legislation that would permit a city to convey real property to UT for such consideration. Finally, you ask about Parks and Wd& Code section 26.001(a), which provides that a municipaJitymustcomplywith certain requhements before “approv@tg] any program or project that requires the use or taking of any public land designated wrd used prior to the arrangement of the program orproject as apark.” (Emphasis added.) You inform us that the site at issue has not been used as a park. Therefore, we conclude that section 26.001 of the Parks and Wildlife Code is inapplicable.

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SUMMARY
The Cii of Longview need not comply with Local Government Code section 253.001 inorder to convey city-owned park land to the University of Texas System (“UT”), a governmental entity with the power of eminent domain,amumingthepartiestot.he tmmaction take certain actions. The city andUTmust~thatuseofthepropertyasauniversitycampusisthe paramount public use of the property. In addition, in order to establish its author@ to wndemn land already dedicated to a public t&UT should make
a finding that the necessity to establish a UT campus in Longview is of paramount public importance and the campus cannot be practically awomplished in any other way. Furthermore, because the park land was pur&sed withbond proceeds, the city should also consider limitations on its authority resulting from the underlying bond election and, at the very minimum, take steps to abandon the bond project.

Local Government Code section 272.001(b) authorizes the city to wnvey the property to UT without complying with notice and bidding requirements, butatnotlessthanthirmadc@vaIue. AwmmitmentbyUT“toestablishand wnstmct a locaked campus on the property” would satis@the dictates of article IJI, section 52 of the Texas Constitution, but does not wnstitute the kiod of&d, amermh&le wnsideration requiredby section 272.001(b). The cityneednotcomply

withParksandWddlifeCode section 26.001 in order to wnvey an undeveloped tract purchased for but never used as a city park.

DAN MORALES Attorney General of Texas

JORGE VEGA Fii Assiit Attorney General

SARAHJ. SHIRLEY Chair, Opinion Committee Prepared by Mary R Grouter Ass&ant Attorney General

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