1. Purpose

The purpose of this procedure is to outline the review and approval process for a proposed use of real property that is under the jurisdiction of the New York State Canal Corporation (Corporation). The purpose of the review and approval process is to determine that the proposed use of the parcel(s) is consistent with the New York State Canal Recreationway Plan (CRP) and Corporation goals, to determine the most appropriate transaction for the use or disposal of the property (that is, permit, lease or sale), and if a competitive process is required for the transaction.

2. Applicable Law and/or Guidance

New York State Canal Law New York State Finance Law §139-j, §139-k New York State Public Authorities Law §382 New York State Public Authorities Accountability Act of 2005 21 NYCRR Subchapter D Canal System New York State Canal Recreationway Plan Canal Real Property Management Policy (25-6-01C) Executive Instruction entitled Code of Ethics Executive Instruction entitled Inappropriate Lobbying Influence In Authority/Corporation

Procurements

3. Introduction

The Corporation is responsible for the maintenance, operation, construction, reconstruction, improvement, development, financing and promotion of the Canal System and for implementation of the CRP. In accordance with the provisions of the Canal Law, the Corporation has the authority to acquire, hold and dispose of real property to advance the purposes of the Corporation and thus, the interest of the State.

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Prior to carrying out a transaction, an analysis shall be conducted to determine whether the property is needed for Canal purposes and if the proposed use of the parcel(s) is consistent with the CRP and Corporation goals, and also to determine the best type of transaction to allow use or dispose of the property, and if a competitive process is required. The TRANSACTION ANALYSIS/RECOMMENDATION (TAR) form (TA-N99116)¹ will be used to document this analysis and approval process and will be included in the Project Record. If appraisals are required, the process will also determine if they are to be conducted by authorized Corporation real estate personnel or external appraisers.

Note: Work permits may continue to be issued by Divisions and do not require completion of the TAR. However, a detailed analysis should be conducted to insure that a work permit is the appropriate Transaction for the requested activity. For processing of work permits see SOP 900-1-02.8.

Work permits shall not be issued in advance of a contemplated occupancy permit or disposal, unless approved by the Executive Director, except in situations described in WORK PERMIT EXCEPTIONS². In all other instances, when a work permit is requested in advance of a contemplated occupancy permit or disposal, the Division Canal Engineer (DCE) should consult with the Office of Land Management (OLM).

4. Procedure

5. Complying with §139-j and §139-k of the State Finance Law (Lobbying Law)

Any contact (inquiry, etc.) made regarding real property subsequent to the first notice of a competitive process for disposal of such real property (solicitation, RFP, etc.) is subject to the Lobbying Law and must be recorded. See the Executive Instruction entitled INAPPROPRIATE LOBBYING INFLUENCE IN AUTHORITY/CORPORATION PROCUREMENTS.

6. Conflicts of Interest

Corporation employees may not have any interest or engage in any activity that would create or appear to create a conflict with the proper discharge of their public duties. If an employee feels they have an actual or potential conflict of interest relating to a real property transaction, the employee is required to contact the Legal Department or Ethics Commission as soon as he/she is aware of the potential or actual conflict. See the Executive Instruction entitled CODE OF ETHICS.

7. Responsibilities

The Contracting Officer is responsible for reviewing and approving or rejecting the DCE’s use and transaction determination for disposals. The Contracting Officer also determines if a disposal should be progressed via a competitive or a negotiated process. If competitive, the Contracting Officer determines the process to be used (e.g., RFP, auction, etc.) and if negotiated, the Contracting Officer indicates if an Explanatory Statement is required.

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The DCE is responsible for: responding to initial inquiries regarding the issuance of permits or the disposal of real property under the jurisdiction of the Corporation and sending the appropriate application package; providing copies of the CANAL INQUIRY form and information to the Director of Canals and OLM; reviewing, approving/disapproving and progressing work permit transactions; and reviewing and recommending the use and transaction for other proposed real property transactions.

Employees receiving inquiries regarding the issuance of permits or the disposal of real property under the jurisdiction of the Corporation are responsible for forwarding the inquiries to the DCE.

The Office of Maintenance and Operations assists the DCE in determining the use and transaction options for real property under the jurisdiction of the Corporation. For disposals, the Office of Maintenance and Operations concurs that the real property is not needed for Canal purposes and recommends its disposal.

OLM is responsible for reviewing and approving the DCE’s use and transaction recommendation and obtaining the review of the determination by the Contracting Officer. OLM is also responsible for responding to applicants regarding the approval or rejection of proposed transactions. OLM is responsible for preparing all required Explanatory Statements.

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8. Process Flowchart

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EXHIBIT 1
TRANSACTION ANALYSIS/RECOMMENDATION
Page 1 of 3

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TRANSACTION ANALYSIS/RECOMMENDATION Page 2 of 3

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TRANSACTION ANALYSIS/RECOMMENDATION Page 3 of 3

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EXHIBIT 2

CANAL INQUIRY FORM The CANAL INQUIRY form was designed to record contacts related to Canal real property and to gather sufficient information so that the DCE can send the appropriate application to the inquirer.

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EXHIBIT 3
SAMPLE REJECTION LETTER

OLM sends letter when application is rejected because either the land is needed for Corporation purposes and there are no alternative options for use; or because the proposed use is not consistent with CRP or Canal Corporation goals; or because the land is not owned by the Canal Corporation.

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EXHIBIT 4
DETERMINING CONSISTENCY WITH CRP AND CORPORATION GOALS

Page 1 of 2 The CRP establishes goals for development of the Canal System which are the driving considerations when determining whether a proposed use is consistent with the CRP and Corporation goals. The three fundamental goals of the CRP are:

 Preserve the best of the past;
 Enhance recreational opportunities; and
 Foster appropriate and sustainable economic development.

The following planning principles are the basis for the CRP’s land-use and conservation guidelines which should be considered when reviewing a proposed use:

 The historic pattern of cluster development connected by stretches of undeveloped open space should be maintained. New development should be encouraged to locate within existing communities;

 Conservation of open space and natural vegetation should be encouraged. Where possible, open space should be connected by means of a greenway to establish a continuous linkage of open spaces between existing developed areas;

 Public access to the canal should be enhanced;
 Agricultural land should be conserved;
 Existing wetlands and aquatic/terrestrial ecosystems should be protected and

restored where possible; Fish and wildlife habitats should be protected and enhanced. Land use types should fall into one of the following categories based on the consideration of the factors outlined above: Greenway: a recreational or aesthetic greenway along the canal bank connecting existing parkland and public open space; Canalway Trail: a trail maintained within the Corporation's jurisdiction;

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DETERMINING CONSISTENCY WITH CRP AND CORPORATION GOALS
Page 2 of 2

 Access and Services for Canal Users: service and access including the addition of facilities at strategic locations;

 Existing Settled Areas: commercial and residential development within the existing roadway and infrastructure network or in extensions that retain the traditional local design character or public access to the Canalway Trail accommodated in all new development;

 Areas Not Currently Settled: new development located as close to existing settlements as possible and to be clustered to preserve existing patterns of landscape and vegetation. Open space, existing landscaping features, farmland and other unique environmental factors in the specific proposed project area must also be reviewed and considered.

The CRP has identified the potential land use types for each thematic canal region. These should also be referred to and considered.

Property under the jurisdiction of the Corporation within the Adirondack Park has additional requirements and restrictions. For projects proposed in this area, OLM will handle these proposed projects on a case-by-case basis.

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EXHIBIT 5
TAR SECTION III - CONSIDERATION FACTORS
Page 1 of 2

When making a use or disposal recommendation, the DCE, or their designee, must consider a number of factors regarding the proposed transaction and provide information to assist in making the final transaction determination. The following items correspond to consideration factors 1 – 9 listed in Section III of the TAR. They provide a brief narrative explanation of what information should be provided when describing each factor.

 Proposed length of use: Indicate how long the applicant proposes to use the Canal property. Indicate specifically if proposed use is greater than 3 years.

 Size of property: Describe the size of the Canal property involved in the proposed transaction.

 Value of property: Indicate if the estimated value of the Canal property involved in the proposed transaction is more than $10,000.

 Access: Describe what access is available to the property (e.g., public access to a road, property landlocked, through upland owner, water access, legal access, etc.).

 Proposed use: Describe the primary use proposed (e.g., residential, commercial, industrial, municipal) and other factors related to property’s use (e.g., assemblage with adjacent property, including property under the jurisdiction of the Corporation, generation of revenue, etc.).

 Proposed improvements: Describe any proposed improvements to be made to or placed on the property (e.g., storage tanks, structures, pavements, ground disturbances, including but not limited to, footings, foundations, slabs, etc.).

 Current use of property: Describe the current use of the property (e.g., vacant, active permit/lease, easement(s), existing improvements, encroachment, etc.). If property is currently permitted/leased, provide any available details pertaining to existing agreement (term, annual fee/rent, etc.).

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TAR SECTION III - CONSIDERATION FACTORS
Page 2 of 2

 Use of adjacent property: Describe how adjacent property is used (e.g., residential, commercial, industrial, municipal) and other factors related to adjacent property’s use that may impact recommendation (e.g., assemblage with proposed property and other property under the jurisdiction of the Corporation, generation of revenue, etc.).

 Other factors: Describe and provide details of other factors pertinent to the proposed use (e.g., known legal issues or disputes, title claims, etc.).

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EXHIBIT 6
CRITERIA FOR RECOMMENDING THE BEST TRANSACTION TYPE FOR THE
PROPOSED USE OR DISPOSAL OF REAL PROPERTY
Page 1 of 4

Once it has been determined that a proposed transaction can be progressed, and all factors that may affect the real property have been considered and described in Sections II and III of the TAR, the DCE must make a recommendation for the proposed use or disposal of the real property in Section IV of the TAR.

The first threshold question is whether the land is needed for Corporation purposes such as navigation, maintenance, repair, dredging, operation, etc. If not, the land may be surplus property which is defined as:

 Surplus Canal lands or structures include lands or structures which, in the opinion of the Canal Corporation, have or may become no longer necessary or useful as a part of the Canal system, as an aid to navigation thereon, or for Canal terminal purposes. In general, lands and structures may not be deemed surplus and abandoned if they include the Canal prism, locks, dams, lift bridges, terminal walls, retaining walls, spillways, waste weirs, gates, feeders, reservoirs, culverts, buildings, embankments, a portion of the Canalway Trail, land needed to access Canal structures or lands, or other amenities or features critical to the mission of the Canal Corporation. It may also be determined that a distance of land beyond the outboard toe of slope, top of slope, banks along the river or in cut sections of the Canal system, is necessary for Canal purposes and may not be deemed surplus. The maps produced and published in the December 2005 "Report on the Future of New York State Canals" may be used as a guide in determining whether lands or structures may be deemed surplus and abandoned.

The following information provides guidance regarding the appropriate transaction type to be recommended for proposed use/disposal:

PERMITS

Occupancy Permits

Occupancy Permits should be the transaction type recommended for allowing use of any/all real property needed by the Corporation (i.e., not surplus to the needs of the Corporation).

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CRITERIA FOR RECOMMENDING THE BEST TRANSACTION TYPE FOR THE
PROPOSED USE OR DISPOSAL OF REAL PROPERTY
Page 2 of 4

Occupancy Permits, which are revocable upon 30 days notice, provide the Corporation with the greatest flexibility for managing property under its jurisdiction. Therefore, in most cases, Occupancy Permits should be recommended whenever real property is needed for Corporation purposes, or may be needed for Corporation purposes in the future. Specifically, Occupancy Permits should be the recommended transaction for use of Corporation real property when all or a portion of the real property applied for:

 has not been declared surplus to the Corporation’s needs, but can be used on a revocable basis;

 may need to be available for future Corporation or public purposes;

 needs to be available upon demand for Corporation purposes;

-or-

 has been declared surplus to the needs of the Corporation, but proposed use is for less than 3 years and will not generate revenue;

-or-

 is within an existing subdivision, and such real property is currently under an occupancy permit. As an interim measure, such real property may continue to be permitted under an occupancy permit and may continue to be transferred. However, such subdivision permits must be for the same use (e.g., no additional improvements, no change in existing structure footprints, etc.). If the real property is not currently under an occupancy permit, no new permit shall be issued.

The existence of an encroachment or the ownership of a structure on real property needed for Corporation purposes, while salient information and a consideration factor to be described, does not warrant a disposal or the granting of a real property interest via an alternate transaction (e.g., sale or lease).

Unless otherwise authorized by the Executive Director, where a disposal of real property surplus to the needs of the Corporation is contemplated, an Occupancy Permit will not be issued in advance of completion of the Disposal.

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CRITERIA FOR RECOMMENDING THE BEST TRANSACTION TYPE FOR THE PROPOSED USE OR DISPOSAL OF REAL PROPERTY Page 3 of 4

DISPOSALS

The Corporation may decide that certain categories of land are surplus to the Corporation’s needs (i.e., not needed for present or future Corporation purposes) and may be disposed of. These are properties that are no longer necessary or useful as part of the Canal System and the disposition is in the best interest of the Corporation. Disposals may be by sales, leases, easements, or other transfers of interest in the real property based on the nature of the proposed use.

When it is determined that real property under the jurisdiction of the Corporation is not needed for Corporation purposes, the preferred transaction to be used for disposal is a sale.

Disposals may be performed by the Commissioner of General Services on behalf of the Corporation when the Corporation has entered into an agreement with the Commissioner of General Services pursuant to the Public Authorities Accountability Act of 2005 and Public Authorities Law.

Sales

A sale is the preferred transaction type to be recommended when the real property in not needed for present or future Corporation purposes. Sales are also to be recommended when real property is requested for railroad bridges by the railroad corporation.

Leases

A lease may be recommended under the following circumstances:

 the real property is needed for Corporation purposes, but will be used for revenue generation;

 the real property is not needed for Corporation purposes; and

the proposed use is for a longer term (e.g., over 3 years), but the applicant does not want to acquire the real property; December 2006 900-1-02.1

CRITERIA FOR RECOMMENDING THE BEST TRANSACTION TYPE FOR THE PROPOSED USE OR DISPOSAL OF REAL PROPERTY Page 4 of 4

-or-

the property will be used by the applicant for revenue generation, but applicant does not want to acquire the real property.

Leases may not be used for lands within the Adirondack Park.

Easements

Easements are not a preferred transaction method:

 when land is needed for Canal Corporation purposes, a permit is typically the recommended transaction;

 if the applicant requests an easement, the DCE should refer the request to OLM for consultation with the Legal Department.

Transfers of Jurisdiction

Transfers of jurisdiction may be recommended when another State agency, authority or other State governmental interest requests real property under the jurisdiction of the Corporation under the following circumstances:

 the real property is not needed for Corporation purposes; and

 the request is for public health, safety or welfare reasons.

If the request for real property by another State agency, authority or State governmental interest is not for public health, safety or welfare reasons, the preferred transaction type is a sale.

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EXHIBIT 7
CRITERIA FOR DETERMINING IF AN INTERNAL OR EXTERNAL SURVEY/APPRAISAL
IS REQUIRED
Page 1 of 2

INTERNAL SURVEYS/PLOT PLANS, ETC.

Authorized Corporation personnel may complete surveys, plot plans, property sketches and/or similar, or such materials may be provided, for the following types of transactions:

 Leases of real property where the value of the underlying real property is estimated to be $10,000 or less and the DCE or OLM has determined an external survey is not required; and

 Permits as needed.

EXTERNAL SURVEYS

The Corporation will utilize private sector surveyors to conduct external surveys for the following types of transactions:

 All disposals of real property, except for leases of real property where the underlying value of the real property to be leased is estimated to be $10,000 or less and the DCE or OLM has determined an external survey is not required; and

 All acquisitions of real property, except for real property associated with office space leases.

INTERNAL APPRAISALS

Authorized Corporation real estate personnel may conduct internal appraisals for the following types of transactions:

 Acquisitions of real property where the value of the underlying real property is estimated to be $10,000 or less;

 Disposals of real property where the value of the underlying real property is estimated to be $10,000 or less;

 Permits for which a fee rate schedule has not been established.

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CRITERIA FOR DETERMINING IF AN INTERNAL OR EXTERNAL SURVEY/APPRAISAL
IS REQUIRED
Page 2 of 2

EXTERNAL APPRAISALS

The Corporation will utilize private sector appraisers to conduct external appraisals for the following types of transactions:

 Acquisitions of real property where the value of the underlying real property is estimated to be more than $10,000;

 Disposals of real property where the value of the underlying real property is estimated to be more than $10,000;

 When the value of the real property is estimated to be over $300,000, two external appraisals are required;

 Disposals of real property, regardless of underlying value, that because of its unique nature is not subject to fair market pricing.

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EXHIBIT 8
DETERMINING WHEN A COMPETITIVE PROCESS MUST BE USED
Page 1 of 2

Based on the TAR information, the Contracting Officer will determine whether a competitive process or non-competitive process is appropriate for the particular real property transaction.

The competitive processes for real property transactions involve publicly advertising for bids through the request for proposal (RFP) or auction process. Non-competitive processes include negotiations or an auction where there is no public advertising for bids.

Non-Competitive Process Determination

The Corporation shall use a competitive process open to the public for all real property transactions, except in limited circumstances. Disposals and contracts for disposal may be negotiated or made by public auction without publicly advertising for bids only when one of the following conditions is met:

 The fair market value of the real property does not exceed $15,000;

 Bid prices after advertising are not reasonable, either as to all or some part of the property, or have not been independently arrived at in open competition;

 The disposal will be to a state or any political subdivision and the estimated fair market value of the property and other satisfactory terms of disposal are obtained by negotiation;

 The disposal is for an amount less than the estimated fair market value of the property, the terms of such disposal are obtained by public auction or negotiation, the disposal of the property is intended to further the public health, safety or welfare or an economic development interest of the State or a political subdivision (to include but not be limited to, the prevention or remediation of a substantial threat to public health or safety, the creation or retention of a substantial number of job opportunities, or the creation or retention of a substantial source of revenues, or where the Corporation’s enabling legislation permits), the purpose and the terms of such disposal are documented in writing and approved by resolution of the Board; or

 Such action is otherwise authorized by law.

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DETERMINING WHEN A COMPETITIVE PROCESS MUST BE USED
Page 2 of 2

Competitive Process Determination

When deciding whether a competitive process is appropriate, the Contracting Officer will consider the following factors:

 What is the estimated fair market value of the property? Fair market value may be determined through internal or external appraisals, requests for proposals, the bid or auction process, or other means.

What is the nature of the proposed project and what is the interest to be conveyed? Has the project already been bid? Were the bids reasonable? Who is the disposal to (e.g., State, political subdivision, private party, etc.)? Can fair market value be obtained through negotiations? Is the proposed use for public or private purposes? Does the disposal have a public health or safety factor? Would the project promote economic development (e.g., jobs, revenues, etc.)? Would the project provide public recreation or access opportunities?

 What are the site specific factors (e.g., character or condition of the property such as critical environmental area, presence of contamination restricting use, land locked, neighboring use, etc.)?

 Are other factors pertinent to the situation allowable by law?

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EXHIBIT 9 DETERMINING COMPETITIVE OPTIONS

Once the Contracting Officer has determined that a competitive process is required, the method to use must be decided and documented on the TAR by the Contracting Officer.

Practical factors for consideration when determining the most appropriate solicitation method include:

What are the applicable legal requirements?Is an appraisal required before a solicitation method can be determined?What is the proposed timetable? Is it realistic and, if not, can it be modified?

How time sensitive is it? Is there likely to be competition (i.e., multiple parties that are likely to

respond)? Which method is the most cost effective? What are the benefits and disadvantages of the options for that transaction? Does the solicitation method help the Corporation to achieve its mission?

Request for Proposals (RFP)

An RFP solicits competitive proposals from prospective contractors for particular work or services, such as development of a particular parcel of property under the jurisdiction of the Corporation.

Request for Interest (RFI)

An RFI is an issued document that solicits expression of interest or ideas for a parcel(s) of property under the jurisdiction of the Corporation. RFIs are used when it is not clear whether there is interest in the parcel or when input or ideas are desirable. RFIs do not result in the selection of a proposal.

Auctions

An auction is a public sale in which property is sold to the highest bidder.

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EXHIBIT 10 CRITERIA FOR DETERMINING IF AN EXPLANATORY STATEMENT IS REQUIRED

When it is determined that there will be no public advertising for bids and the disposal will be through negotiation, the following transactions require the submittal of an explanatory statement:

 Any real property that has an estimated fair market value in excess of $100,000 except leases or exchanges described below;

 Any real property disposed of by lease for a term of five year or less, if the estimated fair annual rent is in excess of $100,000 for any such years;

 Any real property disposed of by lease for a term of more than five years, if the total estimated rent over the term of the lease is in excess of $100,000; or

 Any real property or real and related personal property disposed of by exchange, regardless of value, or any property any part of the consideration for which is real property.

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List of situations where a work permit may be issued in advance of a contemplated occupancy permit or disposal.