Sale of Historic Structures by NC Local Governments for Redevelopment

<p>Almost ten years ago, in the town of Bushwood, North Carolina, the “generous” owner of the historic textile mill building just off Main Street donated the property to the town (it was difficult to maintain and the owner didn’t want to pay property taxes on it any more). The town accepted the property, hoping that it would be able to find a new private owner who would redevelop the property and retain the historic character of the building. Some potential buyers have kicked the tires on the building, but no one has made an offer. Due to the value of the land and the excellent location of the parcel, the property appraises for $300,000.</p> <p>The town recognizes that it needs to market the building more actively—and that it may need the help of experts. “Old Mills R Us,” a regional historic preservation nonprofit with a mission to preserve historic mill buildings, has a proposal for the town:</p> The town will sell the mill to the nonprofit for one dollar. Old Mills R Us (OMRU) will market the property and sell the mill to a private developer who will redevelop the property while retaining the historic features. Rather than charging a broker fee, OMRU will simply keep the proceeds from the sale at whatever price OMRU can get. <p>Can the town enter into this transaction with OMRU? Short answer: not on these terms. This post explains why and suggests some alternatives.</p> General Background on Disposal of Local Government Property <p>We start with the general rule that, unless an exception is [...]</p>