Opinion 89-29


This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.


REAL PROPERTY -- Sale (authority of village to exchange property with a federal agency)

GENERAL MUNICIPAL LAW, §72-h; VILLAGE LAW, §1-102(1): A village may acquire a parcel of property to exchange for property owned by a federal agency and needed for village road building where the federal agency desires an exchange of property rather than an outright sale of its land.

This is in reply to your letter in which you ask whether, in furtherance of an agreement between a village and the U.S. Parks Service of the Department of the Interior, a village may acquire a parcel of property for the purpose of exchanging it for Parks Service property needed for construction of a village street. You state that the value of the two parcels is approximately equal and that the federal agency desires an exchange of property rather than an outright sale of its land.

The authority for a village to exchange property with the government of the United States or any agency or department thereof is provided by section 72-h(a) the General Municipal Law which, in pertinent part, provides:

(a) Notwithstanding any provision of any general, special or local law or of any charter, ... the board of trustees of a village... may sell, transfer or lease to or exchange with... the government of the United States and any agency or department thereof, either without consideration or for such consideration and upon such terms and conditions as shall be approved by such body, any real property owned by such... village...; and any municipal corporation... may acquire or lease such real property as provided in this section. * * * [Emphasis added]

It must be noted, however, that section 72-h(a) authorizes a village to exchange property owned by the village. Here, the village does not presently own the parcel that it intends to exchange with the federal government. It is our opinion, however, that notwithstanding this fact the village may acquire the parcel for the purpose of the proposed exchange.

Section 1-102(1) of the Village Law provides that a village shall have power:

1. To take, purchase, hold, lease, sell and convey such real and personal property as the purposes of the corporation may require.

This section has been interpreted by this Office as authorizing property acquisition only where it is necessary for a municipal purpose (1982 Opns St Comp No. 82-256, p 320). For this reason, it would ordinarily be improper for a village to acquire property for the sole purpose of reconveying it (1981 Opns St Comp No. 81-203, p 216). In this instance, however, although the parcel to be acquired would be exchanged rather than retained, it is our opinion that such acquisition may be properly viewed as serving the municipal purpose of facilitating street improvements (Village Law, §6-612). In light of this, and based upon the particular facts presented, we conclude that the authorization of section 1-102(1) would apply to the acquisition of the subject parcel. If however, the property required for street construction could be directly acquired by purchase or condemnation, then the acquisition of a separate parcel for purposes of exchange might not be viewed as necessary to fulfill a municipal purpose and could thus be considered as being unauthorized by section 1-102(1).

Assuming authorization for the proposed transaction, you have asked us to describe the procedure to be followed in acquiring and exchanging the property. In this regard, our research has not disclosed any particular prescribed procedure that would apply to these specific circumstances. We note generally, however, that the acquisition of a parcel and the exchange of property by a village must be made pursuant to resolutions adopted by the board of trustees at regular or special meetings of the board. We further note, that neither section 72-h of the General Municipal Law nor section 1-102 of the Village Law require special public hearings or referenda for the acquisition or exchange of real property by a village, and the transaction, accordingly, would not appear to be subject to such requirements. Also, although purchases and sales of real property by a village are not subject to statutory competitive bidding requirements (Davies v Mayor, 83 NY 207; Albion Indus. v Town of Albion, 62 AD2d 478, 405 NYS2d 521; 1982 Opns St Comp No. 82-341, p 432), village officials have a fiduciary duty in executing such transactions to obtain the most beneficial terms in the public interest (1986 Opn St Comp No. 86-78, p 124 and citations therein). In this regard, we note that the village should verify, by appraisal or otherwise, that the price to be paid for the parcel purchased is reasonable and that the value of the parcel transferred by the federal government is at minimum approximately equivalent to the value of the parcel given by the village in exchange.

Please note that the above opinion relates solely to the authority of the village to enter into the proposed transaction and that we are expressing no opinion as to the authority of the Parks Service in this regard.

July 25, 1989
William A. Thomas, Esq., Village Attorney
Village of Victory