Indiana law requires the state to sell surplus real estate to the highest bidder, without considering a buyer’s plans for the property.
That could change under legislation proposed by state Sen. Ed Charbonneau (R-Valparaiso).
The bill would allow the Indiana Department of Administration to sell real estate using a request for proposals, in addition to existing options for competitive bids or an auction.
The rationale: The state could evaluate potential buyers and steer deals to projects more likely to stimulate investment and create jobs.
A buyer offering $500,000 to revitalize a vacant building can be a better option than a $1 million offer from someone who intends to tear down the structure to build a parking lot, said Leila Sublett, a real estate project manager for the Indiana Department of Administration. Same goes for a lower-bid buyer of an environmentally tainted property that agrees to clean it up rather than just letting it sit idle.
The RFP process would not make sense for every property, including small parcels left over from Indiana Department of Transportation projects, but for potential redevelopment parcels it makes more sense, she said. The city of Indianapolis uses RFPs and is expected to issue several new ones offering surplus properties in the coming months.
“Right now, we don’t really have a say in what the person does with the property, and we would obviously want something that will create a better atmosphere for that community,” Sublett said.
If the legislation is approved, the state would manage the RFP process in partnership with locally based Venture Real Estate. Venture for years has contracted to handle the disposition of the state’s surplus real estate.
The state’s contact at Venture, general counsel Bill Spencer, could not be reached.
Under the RFP process, state officials would be required to maintain a log of each meeting with an RFP bidder, description of the nature of all communications and a copy of all written communication. The information would be subject to public inspection, with the exception of proprietary information.
That sounds encouraging to Clarke Kahlo, a retired city planner and former staffer with the Hoosier Environmental Council. He’d like a requirement that the state notify neighbors when a property near their turf is proposed for sale or redevelopment.
“The public should have a reasonable opportunity to influence a proposed sale,” Kahlo said. “Communities may have other ideas about properties in their areas, which might have some utility for neighborhood groups.”
Other changes included in the bill would allow the state to exchange property involved in a dispute for other state-owned property of “like value,” regardless of the value of property to be transferred, or trade properties to “improve the state’s ability to manage state property or to improve access to state property.”
It also would require the Division of Historic Preservation and Archeology (part of the Department of Natural Resources) to review properties proposed for sale within 30 days.
The legislation should not require additional expense to implement, according to an analysis by the state’s Office of Fiscal and Management Analysis. The bill, which ultimately failed last year after winning approval in the Senate, would take effect July 1.
Charbonneau, the bill’s sponsor and ranking member on the senate’s appropriations committee, did not return a phone call placed to his office.•