Exhibit A
PORTLAND PARKS AND RECREATION
LOCAL SHARE ACQUISITION PROCEDURES
METRO NATURAL AREA BOND MEASURE
March 2008
Broad Policy: Portland Parks and Recreation (PPR) acquisition efforts under the Local Share component of the 2006 Metro Natural Areas Bond Measure will be completed in accordance with the intergovernmental agreement between the City of Portland and Metro, dated May 8, 2007, and with applicable City policies and procedures. Given the dynamic nature of the area’s real estate market, it is imperative that PPR acquisition procedures are responsive to market realities and opportunities. To achieve this outcome City Council delegated certain negotiation and closing authorities to Commissioner in charge of PPR, with the understanding that the delegated authorities would be used for routine real estate transactions using Local Share funds. Specific procedures under this delegated authority are as follows:
Acquisition Policies and Procedures:
In accordance with City Council Ordinance No. ___________ the Bureau Commissioner and his/her designees are authorized to negotiate and close real estate transactions related to the 2006 Natural Areas Bond Measure provided all of the following criteria/conditions are met:
1. The landowner is a willing seller.
2. The property to be acquired (the Property) is identified as important to achieving the goals of the PPR and the acquisition will be consistent with the intent of the Metro Natural Areas Bond Measure, including Attachment A to the Agreement which identified projects where Local Share funds could be expended.
3. A due diligence review of the Property’s circumstances has been completed by PPR staff and its contractors in accordance with PPR’s Due Diligence Guidelines attached as Appendix A to these procedures. The primary purpose of the review will be to (i) identify matters to be resolved by the owner prior to closing and (ii) identify actions that need to be taken by PPR after closing to comply with PPR policy and the intent of the Natural Areas Bond Measure (e.g., install fencing, demolish buildings, etc.).
4. The negotiated purchase price for the property is either:
A. Equal to or less than the fair market value as established by the appraisal described below (note that the City will actively solicit donations and bargain sales); or
B. Not more than 10% or $100,000, whichever is less, above such fair market value and the Bureau Commissioner has authorized acquisition of the property at such price after finding that acquisition of the property at the negotiated purchase price is in the public interest. In order to conclude that a purchase is in the public interest the Bureau Commissioner must conclude that the failure to acquire the property will significantly compromise the City’s ability to achieve the natural area acquisition program objectives; and the amount of funds available to purchase the property are available. In addition, the Bureau Commissioner shall consider the following factors before concluding that such a purchase is in the public interest:
1. Whether there are immediate and known competing offers or other market pressures that put the city at risk of permanently losing the opportunity to purchase and preserve the property unless the city agrees to pay the negotiated purchase price; and
2. Whether any other parties are making financial contributions toward the purchase price.
5. An independent certified appraiser has completed an appraisal of the Property that states a conclusion of the fair market value of the Property or, if appropriate, a range of value. The appraisal may be in summary report format. The appraiser shall state in the appraisal any assumptions that he/she relied upon to determine the Property’s fair market value, including those related to Due Diligence review outcomes. Unless the PPR Director determines that it would be unreasonable not to do so, the appraiser will not use “extraordinary assumptions” as that term is defined in the Uniform Standards of Professional Appraisal Practice (USPAP).
A. A City appraisal may be deemed unnecessary if:
1. An appraisal has been provided by the owner or another party and deemed satisfactory by PPR; or
2. The agreed purchase price is $250,000.00 or less and is supported by the current assessed value of the Property or recent sale of comparable property in the area; or
3. The Property is substantially similar to other properties appraised by the City within the last twelve months; and
4. The Bureau Commissioner approves a PPR decision to waive the need for a City appraisal.
B. A certified appraiser will review all appraisals when the appraised value is greater than $500,000 or when the Bureau Commissioner determines that such a review is appropriate due to the circumstances associated with the proposed purchase. Reviews will be completed in strict accordance with USPAP.
C. If appraisal deficiencies cannot be corrected to the full satisfaction of the PPR a new appraisal will be completed.
6. City Council will be promptly notified after each closing and will be provided an annual report as to all acquisitions under the Local Share acquisition program.
7. In the event that PPR cannot fully comply with the Local Share Acquisition Procedures, the acquisition will be referred to City Council for approval.
8. Documents related to all acquisitions under the Local Share acquisition program shall be managed in accordance with applicable City procedures.
APPENDIX A
DUE DILIGENCE GUIDELINES
1. Definition: "Due Diligence" is the systematic inspection of the legal title and physical condition of real property before that property is purchased to assure protection of public investment in natural areas, local access parks, and trail properties. Due Diligence will be conducted in advance of closing so that resolvable problems can be adequately addressed prior to closing.
2. Due Diligence Team: At a minimum, the PPR Due Diligence Team will be comprised of the Real Estate Negotiator, the Natural Areas Program Manager, the PPR Property Manager and appropriate attorneys in the City Attorney’s Office.
3. Due Diligence Approval: Final due diligence reports are to be approved by the PPR Director and City Attorney.
4. Contents: Specific items to be addressed in a Due Diligence review are provided for on the PPR Due Diligence check list, which may be amended from time to time for the purpose of remaining current.
5. Key Due Diligence Items: At a minimum, the due diligence review must address and/or include the following items:
A. Valuation: Confirm that the purchase price was arrived at in accordance with the Local Share Acquisition Procedures.
B. Title: Verify that title matters are acceptable to the City Attorney’s Office. Of particular concern to the City will be valid existing rights of others that affect the Property.
C. Survey: Verify that either a survey is unnecessary or, if necessary, the survey accurately identifies boundary and encroachment issues.
D. Access: Confirm that legal and physical access is sufficient for the purposes for which the Property is being acquired.
E. Site Inspection: Document the physical inspection conducted by PPR and its contractors, identify significant matters to be resolved by owner prior to closing or PPR after closing (e.g. stabilization and security).
F. Environmental Review: Clearly describe the level of environmental review completed on the Property. In the event that environmental risk is identified, the Report will include a statement that the City Attorney’s Office has reviewed the environmental circumstances and finds them acceptable.
G. Unusual Circumstances: Identify unusual circumstances, if any, which the Bureau Commissioner will consider for the purpose of determining whether or not the proposed purchase should be referred to City Council for approval.
6. Due Diligence Report. A short due diligence report will be prepared, summarizing key findings of the due diligence review and recommending PPR follow-up actions (e.g. purchase as is, purchase subject to satisfactory environmental remediation by owner, etc.).