REG 07.50.01 - Acquisitions and Dispositions

Authority: Vice Chancellor for Finance and Business

History: First Issued: October 30, 2000. Last Revised: April 30, 2013. 

Additional References: 
Real Estate Website 
Exhibit 1 NCSU Lease Request For Space 
Exhibit 2 Note to Proposer 
Exhibit 3 State Property Transactions 
Exhibit 4 Centennial Campus Disposition by Lease Space in Buildings 
Exhibit 5 Real Estate Check List for Development Officers

Contact Info: Real Estate Director (919-515-3235)


1. PURPOSE

The purpose of these operating procedures is to protect the Real Estate interests of North Carolina State University and its Foundations/Endowments during the acquisition or disposition of real property.

2. GENERAL GUIDELINES/APPLICABLE RULES

Before action is taken regarding real estate, the University Real Estate Office must review proposed acquisitions and dispositions.

3. PROCEDURES

3.1 Acquisition by Lease - All lease requests must be submitted to the Real Estate Office on RE-1 and PO-27 forms. (See Exhibit 1 NCSU Lease Request For Space and Exhibit 2 Note to Proposer for examples of these forms.) The Real Estate Office will process the requests according to the following regulations. (See Exhibit 3 State Property Transactions.)

3.1.1 Leases with an annual rent of $25,000.00 or less and a term not exceeding 3 years
The Real Estate Office will conduct a search for space by seeking quotes or competitive bids. After the space has been selected, a lease document will be created and approved by the University on leases of $15,000 or less and by the State Property Office for leases between $15,001.00 and $25,000.00.

3.1.2 Leases with an annual rent exceeding $25,000.00 or a term exceeding 3 years (including renewal terms):

The Real Estate Office will forward a properly authorized request to the State Property Office requesting leased space. The State Property Office will advertise for bids. After the bids are received, the State Property Office and the University will make a selection. The State Property Office will create the lease.

3.2 Dispositions by Lease - The University occasionally leases property to corporations, individuals, and other government departments.

3.2.1 Leases to organizations, corporations, individuals, or other non-state governmental agencies:

These leases are created using the same rent value, term, and approval guidelines used for acquisitions by lease. The only exception to these regulations is the disposition of leases on Centennial Campus. (See Exhibit 4 Centennial Campus Disposition by Lease Space in Buildings - Centennial Campus Financing Act 1987, G.S. 116-198.31.40 as amended by NC General Assembly under Session Law 1998-159.)

3.2.2 The disposition of space to University Departments or State agencies is usually accomplished by "use agreements." "Use agreements" are executed by a responsible official from each agency. The State Property Office should review large inter-agency agreements before they are executed.

3.3 Acquisition by Purchase/Gift -

3.3.1 Departments, Foundations or Endowments forward detailed information concerning the proposed gift to the Real Estate Office. (Endowment and Foundations development officers should attach the following information to an RE-2 Form - Real Estate Check List for Development Officers - See Exhibit 5 Real Estate Check List for Development Officers):

3.3.1.1 Ownership

3.3.1.2 Description of property and improvements

3.3.1.3 Copy of the Deed

3.3.1.4 Map of property

3.3.1.5 Encumbrances; i.e., easements, leases, taxes

3.3.1.6 Zoning

3.3.1.7 If gift, outstanding liens or debt service

3.3.1.8 Describe any use of hazardous or toxic chemicals on the property

3.3.1.9 Value

3.3.1.10 Commercial properties - supply copy of prior year income tax return, plus other pertinent financial information

3.3.1.11 Details of any known problems, i.e., pending litigations, disputes, planned neighboring developments, etc.

3.3.1.12 Other available information

3.3.2 NCSU Real Estate will review the proposed acquisition and forward its recommendation to the Vice Chancellor for Finance and Business or the Treasurer of the Foundation/Endowment. Expenses incurred as a result of this review will be paid by the appropriate agency initiating the proposed acquisition. This will include:

3.3.2.1 Summary of the on-site inspection of the property.

3.3.2.2 A Phase I Environmental Site Assessment.

3.3.2.3 Legal access to the property (easements, right of ways, etc.)

3.3.2.4 Identification of any encumbrances which may impact the use or marketability of the property.

3.3.2.5 Evaluation of cash flows, if applicable.

3.3.2.6 An appraisal of value will be required for the purchase of any property. Two appraisals will be required for any property valued in excess of $500,000.00.

3.3.2.7 The Chancellor will approve purchases not exceeding $50,000.00 and pass them to the Board of Trustees’ Buildings and Property Committee. Purchases exceeding $50,000.00 will be approved by the Board of Trustees. The Treasurer of Foundations/Endowments will present the purchase request to the Board for approval.

3.3.2.8 Approved acquisitions will be sent to the State Property Office for review and presentation to the Governor’s Council of State for approval. The Foundations/Endowments Board will present approved acquisitions to the Treasurer for execution.

3.4 Disposition by Sale -

The sale of property by the Stated or Endowments and Foundations will follow the same regulations and approval processes used for acquisitions.

3.5 Easements -

Easements are non-possessory rights to use the land of another. The State, Foundation, or Endowment may acquire or grant easements.

3.5.1 Acquisition of an easement is accomplished using the same approval process as acquisition by purchase.

3.5.2 Granting an easement is usually done to accommodate public utilities or local governments. The process of approval follows the same guidelines as an acquisition by purchase. One exception is that the Chancellor has the authority to approve routine utility easements.

3.6 Severance -

Severance includes such actions as removal of timber or demolition of buildings.

3.6.1 Severance of timber from lands managed by North Carolina State University are permitted under a Resolution adopted by the Council of State on February 8, 1968, and amended on September 6, 1977.

3.6.2 Severance of buildings require the approval of the Chancellor, Board of Trustees’ Buildings and Property Committee, and the Council of State. All buildings scheduled for severance must be certified as being asbestos free before they will be approved by the Council of State.

3.6.3 Severance from Endowment/Foundation properties require approval by the respective Boards and execution by the Treasurer.