The Department of Enterprise Services (DES), on behalf of agencies and after consultation with the Office of Financial Management (OFM), is required to purchase, lease, lease purchase, rent, or otherwise acquire all improved or unimproved real estate, as required by elected state officials, institutions, departments, commissions, boards, and other state agencies, or federal agencies where joint state and federal activities are undertaken. The DES may also grant easements and transfer, exchange, sell, lease, or sublease all or part of any surplus real estate for those state agencies which do not otherwise have the specific authority to dispose of real estate. Any such transfer, exchange, or sale must comply with state laws related to the disposition of state-owned land, as well as requirements related to the transfer, lease, disposal of public property for affordable housing. The DES may fix the terms and conditions of leases, except that the maximum term is 20 years in duration. Long-term leases that exceed 10 years in duration require special approval from the OFM and must meet various life-cycle cost and facility efficiency standards.
The DES is responsible for managing the real estate transactions of the Department of Social and Health Services (DSHS). The DSHS-owned properties are subject to a maximum lease duration of 20 years. All net proceeds from leases or sales of real property, conservation easements, and sales of timber, from the state properties at the Fircrest and the Lakeland Village Residential Habilitation Centers, as well as the Rainier School and the Yakima Valley School, must be deposited into the Dan Thompson Memorial Developmental Disabilities Community Services Account (Dan Thompson Account).
The DES is authorized to enter leases of up to 99 years at the Fircrest Residential Habilitation Center site if the lease is for recreational, affordable housing, local government, community center, or community services purposes. All leases that extend beyond 55 years must: (1) provide for periodic rental reevaluation and adjustment, except leases with rentals based on a percentage of income; (2) be reported to the OFM and the appropriate committees of the Legislature within 30 days of the date of execution of the lease; and (3) include in this report a financial analysis that justifies the financial benefit for the added term and the schedule for periodic rental adjustments.
As compared to the original bill, the substitute bill:
(In support) None.
(Opposed) There is opposition to this bill because it does not require the highest and best use of the property for the benefit of the Dan Thompson Account, which is specifically for the benefit of persons with developmental disabilities. A shorter term for reevaluation of the lease would be preferable, and the 99-year term provision should be eliminated. There is sufficient authority under current law for the DSHS to lease the property. There may be interest in selling this property in the future, and the longer lease term would interfere with that sale.