                             QBfficeof tfie 2Mornep QSeneral
                                          %5tate of tEeme
DAN MORALES
 ATTORNEY
      GENERAL                                  May 20, 1997


   The Honorable Bill Radii                             Opinion No. DM4t 1
   chair, Fiinance ckmmittee
   Texas State Senate                                   Be: Whether the City of Longview is authorized
   P.O. Box 12068                                       to transfercity-owned property to the University
   Austin, Texas 7871 l-2068                            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 Univemhy of Texas System(WY) for the purpose of establishing a UT campus. We
   understand that in a 1979 bond election, the voters of the city approved a proposition authorizing a
   bad issuance for the pumhase of land for parks. The city purchased the forty-eight acre site at issue
   in 1985 with bond proceeds. In May 1994, the city held a bond election which included a proposition
   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 of a municipality to obtain the approval of the voters before selling land owned, held,
   or claimed as a public 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 if the 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 (citing ElPuw County v. City of ElPaso, 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 d w.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 General Opinion DM-232 and the authorities discus& in that opinion that the city need not
   adhere to the procedures set forth in section 253.001 in order to convey the site to UT ifthe city and
   UT agree that use of the property as a university campus is the paramount public use of the property.
   Whether use of the property as a university campus is the paramount public use is a question of fact
   and is therefore beyond the purview of an attorney general opinion.

           We limit the foregoing conclusion with two caveats. First, we note that our analysis of the
   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 a public use. Case law suggests that the authority to condemn property already devoted
to a public use will not be implied when the condemnation will destroy the use to which the property
has been devoted. See Ausiiin I&p. Sch. Dist. v. Sierra Club, 495 S.W.2d 878,882 (Tex. 1973)
(citing Sabine &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 it cannot be 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 is of paramount public importance and the campus cannot be practically accomplished in
any other way involves questions of fact.

         We also note that unlike the park land at issue in Attorney General Opinion DM-232 and the
authorities cited there, the site at issue here was purchased with bond proceeds. It is a well-
established principle that when the electorate has approved bonds for a particular purpose, the
goveming body that issued the bonds czumot arbitrarily decide to use the bond proceeds for another
purpose. Hudson v. &m Antonio Indep. Sch Dist., 95 S.W.2d 673 (Fax. 1936); see also Bkzck v.
i%ken@, 246 S.W. 79, SO-81 (Tex. 1922) (order calling bond election and establishing purpose for
which bond pmceeds will be used is contract with voters).’ In the context of a dispute regarding the
sale of mineral rights on land purchased by the Cii of Beaumont for an airport with bond proceeds,
the Texas Supreme Court articulated the following principle:

                Smce the city had acqukd the land with the proceeds of municipal bonds
           which had been voted and issued for the purpose of acquiring an airport, the
           land thus purrhad became dedicated to that purposeand the land could not
           beusedforanyotherpurpose~~wouldinterferewithitsuseasanairport
           until such use in whole or in part was lawfully abandoned by the city.

City of Beaumont v. Moore, 202 S.W.2d 448,452 (Tex 1947). A governmental agency that has
called abond 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 1 ofthe article”shall ever be sold
until such sale is authorized by a majority vote of the qualitkd voters of such city or to-” id. 3 2;
see alsoMcCoy v. Williams, 500 S.W.2d 178, 180-81 (Tex. App.-El Paso 1973, writ refd er.e.)




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The Honorable Bill Rathff - Page 3          (DM-441)




(suggesting that election requirement applies to any city park, not just 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
whether this fact imposes a limitation on the authority of UT to condemn the land. This appears to
be a question of tirst impremion. On the 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
purpose is 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 of the cases and 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 issue with bond Smds does not atlbct the authority of UT to condemn the land and that what UT
can do through condemnation pmceedings it should be able to do by agreement with the city.
Because tha questioti whether the bond elecrion-related lint&ions on the authority of the city to use
the land for other, non-park purposes affects the authority of UT to condemn the land appears to be
one of tirst impmssion, however, the city would be well advised to take steps to lawlttlly abandon use
of the 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 of the city in the 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 public property, and section 272.001 of the 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, if real property is conveyed to a governmental entity that has
the power of eminent domain. Id. 3 272.001(b)(5). Subsection (b) of section 272.001 provides that




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The Honorable Bi Ratliff - Page 4              (DM-44      1)




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,
by the price obtained at public auction Id. 5 272.001(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
market value.

        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 and H-108. We agree that such a GnIing would satisfy the dictates of article III, section 52
under the rationale of those opinions.’ We are not 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.

         As noted in Attorney General OpinionDM-232, the provisions of section 272.001 that permit
a political &division to convey teal property to a governmental entity that has the power of eminent
domain without complying with its notice and bidding requirements but at not leas than fair market
value date 6om 1985,5 some years atIer this office issued Attorney General Opinions H-1256 and
H-108. In Attornq General Opiion DM-232, the City of Hereford indiaed that it would tind the
paramount public use of the 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
authorized to transfer the 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.

        The term ‘Sir market value’ is not de&d for purposes of section 272.001 and we detine it
according to its common usage. Gov’t Code Q 311.011 (Code Construction Act). “Fair market
value” is generally defined as the price that a willing buyer, who desires to buy, but is under no
obligation to buy, would pay to a willing seller, who desires to sell, but is under 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 eminent domain pmceeding where an entire tract or parcel of land is condemned is “local market
value.” Prop. Code 5 21.042(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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The Honorable Bill Ratliff - Page 5         (DM-441)




refd, n.r.e.) (“Market value should be based upon reasonable cash value.“); 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 is intended “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 a political subdivision to convey real property to a governmental entity with the
power of eminent domain without notice and bidding but at not less than fhir market 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
municipaJity must comply with 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 or project as a park.” (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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The Honorable Bi RatlilT - Page 6         (DM-441)




                                     SUMMARY

              The Cii of Longview need not comply with Local Government Code
          section 253.001 in order 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 with bond 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 required by section 272.001(b). The
          city need not complywith Parks and Wddlife Code 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

SARAH J. SHIRLEY
Chair, Opinion Committee

Prepared by Mary R Grouter
Ass&ant Attorney General




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