[ Previous Page]  [ Home Page ]

The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)



Opinion No. 5860

March 10, 1981


Consideration for sale of land to county


Const 1963, art 7, Sec. 26--consideration for sale of land to county

A city may convey its land to a county for consideration of $1.00 on condition that the county use the land for public recreation purposes and such conveyance does not violate Const 1963, art 7, Sec. 26.

Dr. Howard A. Tanner


Department of Natural Resources

Stevens T. Mason Building

Lansing, Michigan

You have requested my opinion as to whether there is any constitutional, statutory, or charter impediment to a sale of real property by the City of Kalamazoo to the County of Kalamazoo for and in consideration of the sum of $1.00 upon the condition that the lands be used solely for public recreation purposes.

As part of the factual background to your question, you have indicated:

The County has taken an option to purchase the subject lands for $190,000 in contemplation of receiving reimbursement from the Federal Government in the amount of $65,500 under provisions of the Land and Water Conservation Fund Act, PL 88-578. The Act authorizes the United States Department of the Interior, through the Heritage Conservation and Recreation Service (HCRS) to provide grants to states or local units to assist in the acquisition or development of lands for public outdoor recreation.

The Heritage Conservation and Recreation Service Manual, Part 670, Chapter I, 670.1.8K provides, in part:

'K. Cost of Real Property Purchased from Other Public Agencies. The actual cost to the participant of land purchased from another public agency may be eligible for matching, subject to the following conditions:

(1) The land was not originally acquired by the other agency for recreation, nor has it been so managed while in public ownership.

(2) No Federal assistance was involved in the original acquisition by the other agency.

(3) The selling agency is required by law to receive payment for land transferred to another public agency. Examples would be public school land that can be used for non-school purposes only through payment to the school agency, or excess State prison lands that can be transferred to local government use only on a purchase basis. The support ceiling will be based on the price paid by the participant for the property or the fair market value, whichever is less. In some instances the selling agency may be permitted a choice between various State laws which would set the selling price at different levels depending upon which law is chosen by the agency. For example, various laws may be in force which would allow the agency to transfer the real property to another public agency for fair market value, for reimbursement of unpaid taxes, as a donation or for other consideration. Fund assistance will be limited to the minimum amount for which the property could be transferred legally.'

The United States Department of the Interior Heritage Conservation and Recreation Service is not persuaded that the City in this instance may not donate the lands in question. The Service, recognizing that the question involves interpretation of State law, has recommended that you seek my opinion.

Const 1963, art 7, Sec. 26, provides:

'Except as otherwise provided in this constitution, no city or village shall have the power to loan its credit for any private purpose or, except as provided by law, for any public purpose.'

In Sinas v City of Lansing, 382 Mich 407, 412; 170 NW2d 23 (1969), the plaintiff challenged the transfer of property by the city to a community college for a sum alleged to be less than its fair market value, the plaintiff asserting that such transfer violated Const 1963, art 7, Sec. 26. The action was disposed of on motion for summary judgment, without a testimonial hearing on the subject of fair market value.

Affirming the lower court, the Supreme Court held:

'But even treating the case as one in which no value was paid, the courts below were correct.

'Constitutionally (Const 1963, art 7, Sec. 26), a city is prohibited from loaning its credit for any public purpose 'except as provided by law.'

'This means that in the absence of statutory authority, the city cannot give away urban renewal land, even for a public purpose.'

The Supreme Court concluded that there was ample statutory authority for the transfer, authority therefor not being dependent upon the payment of fair market value.

With regard to the question here involved is there then statutory authority for a conveyance by a city to a county for and in consideration of the sum of $1.00 upon the condition that the lands be used solely for public recreation purposes?

The City of Kalamazoo is a home rule city, its charter having been adopted February 4, 1918.

The Home Rule Cities Act, 1909 PA 279, Sec. 4e; MCLA 117.4e, MSA 5.2078, provided in part:

'Each city may in its charter provide:

' (3) For the maintenance, development, operation, of its property and upon the discontinuance thereof to lease, sell or dispose of the same subject to any restrictions placed thereupon by law: Provided, That on the sale of any capital asset of a municipally owned utility the money received shall be used in procuring a similar capital asset, or placed in the sinking fund to retire bonds issued for said utility.'

Kalamazoo Charter, Sec. 97 provides:

'The City shall have, and it is hereby given the power to purchase or condemn private property, within or without the City, for any public use within the scope of its power. To that end the City Commission, subject to the general laws of the State, whenever it deems the same essential for the welfare of the inhabitants of the City, may acquire by gift, purchase, condemnation or otherwise, the necessary property for the purpose in view. The City Commission, subject to the general laws of the State, shall have the power to hold and improve such property, and to convey or dispose of the same.'

The quoted provisions of the Home Rule Cities Act, supra, and Kalamazoo Charter, supra, are sufficient authority for the sale of the subject lands by the City. See Kalamazoo Municipal Utilities Association v City of Kalamazoo, 345 Mich 318; 76 NW2d 1 (1956).

For what consideration, then, may the 'sale' be concluded? As stated in OAG 1979-80, p 240, No 5522 (July 10, 1979):

'Our Supreme Court has ruled that a sale is parting with one's interest in something for valuable consideration. Steadman v Clemens, 321 Mich 54, 59; 32 NW2d 45, 48 (1948). . . .

'Valuable consideration for the sale of land need not be the payment of money. Valuable consideration may include acts to be done after the conveyance involving the use of the property by the grantee in a manner that will benefit the grantor. Smith v Maxey, 186 Mich 151, 165-166; 152 NW 1011, 1016 (1915); Stanley v Schwalby, 162 US 255, 276 (1896).'

1917 PA 156; MCLA 123.51 et seq; MSA 5.2421 et seq, provides in part:

'Sec. 1. Any city, village, county or township may operate a system of public recreation and playgrounds; acquire, equip and maintain land, buildings or other recreational facilities; employ a superintendent of recreation and assistants; vote and expend funds for the operation of such system.

'Sec. 3. Any city, village, county, township or school district may operate such a system independently or they may co-operate in its conduct in any manner in which they may mutually agree; or they may delegate the operation of the system to a recreation board created by any or all of them, and appropriate money, voted for this purpose, to such board.'

Clearly, the city may operate a public recreation program by itself or in co-operation with the county. Thus, it may be concluded that the use of the subject lands by the county for a program of public recreation constitutes a valuable consideration to the City of Kalamazoo and its residents.

In conclusion, it is my opinion, therefore, that while it is not precluded from selling the lands for $190,000.00, the City of Kalamazoo may, if it chooses, sell the subject lands to the County of Kalamazoo for and in consideration of the sum of $1.00 upon the condition that the lands be used solely for public recreation purposes. A conveyance for $1.00 upon condition that the lands be used for public recreation purposes would be made for a valuable consideration, is within the authority granted the city by statute and charter, and does not contravene Const 1963, art 7, Sec. 26.

Frank J. Kelley

Attorney General

[ Previous Page]  [ Home Page ]