STATE OWNED LEASING AND DEVELOPMENT UNIT LEASES ON STATE PROPERTY - 1313.3

(Renumbered: 11/2020)

(Revised and renumbered from 1323.1)

The Asset Management Branch is the initial point of entry for real estate services. To request real estate services, agencies submit a request via CRUISE. See Section 1300 and 1310.

Leasing State-Owned Real Property to Others

The Director of DGS, with the consent of the state agency concerned, may lease state- owned real property to others for a period not to exceed five years. Leases of state-owned property are required to reflect fair market rental, with certain exceptions. Leases of state- owned real property for radio and television purposes (telecommunications leases) and other specified uses may exceed the five-year limit. When space permits, agencies may request that space in state facilities be leased to financial institutions in order to provide for Automated Teller Machines.

General Competitive Bidding Requirement for Leases of State-Owned Property

Competitive bids shall be solicited for new leases or renewal of existing leases of state-owned real property, except for the following:

1. Leases where prior approval has been received from DGS to lease without solicitation and at a rental rate consistent with fair market value.
2. Renewal of a lease for up to three five-year extensions where prior approval has been received from DGS and at a rental rate consistent with fair market value.
3. Leases to nonprofit organizations.
4. Leases to governmental agencies.
5. Telecommunications leases.

Commercial Advertising Signs

There are restrictions regarding commercial advertising signs on state property. To obtain guidelines before entering into a lease for signage, clients may contact DGS.

Veteran’s Home Property Use Policy

APPROVAL CRITERIA

A. In accordance with MVC §1023(b), all leases, licenses, and other property uses of Veterans Home Property must be in the best interests of the home and its members. To be in the best interests of the home and its members, all property use must meet at least one of the following criteria:

Member Benefit

1. The property use would principally and directly benefit the members of the home and their medical, welfare, recreation, or similar needs;

Operational Benefit

2. The property use would principally and directly benefit the operations of the home, solely as it relates to the home’s delivery of long-term and residential care to current members;

Health & Safety Benefit

3. The property use would directly, routinely, substantially, and demonstrably benefit the health and safety of home members; and/or

Use of Existing Facilities

4. The property to be used is an existing home facility that cannot be reasonably operated or repurposed in a manner that meets the preceding criteria, and the terms of the property use agreement would maximize the direct benefit to the home and its members while complying with all other requirements for the use of state property, to include fair market value rent and lease duration.

Approval Determination

B. Only the Secretary or designee shall determine whether the proposed Property use meets these Approval Criteria.

C. These approval criteria shall be applied to all future considerations of new or renewed property use agreements.

D. An activity that principally and directly benefits the home and its members must be provided exclusively or primarily to members, or it must be designed for the particular needs of the home and its members, as opposed to the general public.

General Public

1. Any benefit of property use to the general public, to include non-member veterans, must be ancillary to the intended benefit to the home and its members and must not be a determinative factor in the development of the lease.

Revenue

2. Generation of revenue for any state fund, including the Morale, Welfare, and Recreation Fund, is not an appropriate substitute for this requirement, regardless of how the revenue may be used, unless the event itself is a fundraiser for the benefit of the home and its members.

Incompatible Use

E. Any other third-party uses of home property are incompatible with the letter or intent of MVC §1023(b) and shall not be approved.

IV. EXAMPLES OF APPROPRIATE PROPERTY USE

A. Examples of third-party activities that principally and directly benefit the home and its members include:

Beneficial Third Party Activities

1. Meetings of veterans or support groups, provided that attendance significantly consists of home members;

2. Onsite barbershops and salons that primarily serve home members;

3. Fundraisers and meetings by support foundations for the purposes of soliciting and distributing donations for the home and its members;

4. State-owned housing leases for home employees;

5. Events such as picnics, holiday parties, and Veterans Day celebrations, which may be operated or sponsored by third parties but primarily serve home members and their families; and

6. Medical care, financial assistance, or similar services to be provided for home members.

B. Examples of third-party activities that do not principally and directly benefit the home and its members include:

Third-Party Activities Without Direct Benefit

1. Private events, such as corporate events and company picnics, in which home members are not the primary participants or beneficiaries;

2. Leases and events that primarily benefit the community at large, even if they provide a secondary benefit to home members, such as free admission;

3. Walking, running, or cycling events not primarily composed of home members, unless the event is held for the explicit purpose of raising donations and providing support for the home and its members;

4. Activities that benefit veterans in the community and do not provide a significant benefit to home members; and

5. Activities that create undue disruption or risk for the home or its members or are otherwise incompatible with the mission of the home, regardless of the type, purpose, or beneficiary of the activity.

Third-Party Activities Benefiting Health & Safety

C. Examples of third-party leases that are in the best interests of the home, regardless of the principal beneficiary, due to the direct, routine, substantial, and demonstrable benefit to the health and safety of home members include:

1. An active firefighting or law enforcement facility that regularly dispatches firefighters or police officers to respond to emergencies on the campus of the home; and

2. A clinic or other medical facility that regularly provides healthcare services to members of the home.