Proposed Purchase of the "GO Restaurant" from the Guadalupe Organization, inc., by the Guadalupe Town Council for $45,000, utilizing Federal Revenue Sharing funds

B-130515-G.94: Mar 7, 1979

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The decision of the Comptroller General was requested in regards to the following questions posed by a constituent of the Honorable John J. Rhodes: (1) Whether the Guadalupe Organization, Inc. (GO) can sell the "restaurant" after using Federal funds to remodel it? (2) If Federal funds were used to remodel the barracks whether the money GO receives for the "restaurant" should be used to benefit the community? (3) Whether Federal Revenue Sharing funds may be used to purchase the building and land without appraisal?

Guadalupe Organization, Inc. (GO), an Office of Economic Opportunity (OEO) grantee, may sell the "GO Restaurant" and retain the proceeds of the sale, unless some provision of local law or the terms of its charter requires it to expend the proceeds of the sale for the benefit of the community. There is no evidence indicating that GO used trainees in an OWO-funded training program to refurbish an Army barracks as a "restaurant". However, where Federal grant funds are provided for training in building skills, rather than for building or remodeling a building, a resulting building may be considered an incidental end product of the training program. The Uniform Relocation Assistance and Real Property Acquisition Act of 1970 (URA), requires an appraisal whenever property is acquired for a Federal of federally assisted project. The State and Local Fiscal Assistance Act of 1972, on the other hand, states that a recipient government shall expend its revenue sharing funds only in accordance with the laws and procedures applicable to the expenditure of its own revenues. In this case, applicable Arizona laws and procedures do not require an appraisal prior to the purchase of real property. Therefore, in the absence of a definitive court decision stating that the URA applies to purchases made with revenue sharing funds, we conclude that GO was not required to appraise the property prior to the purchase of the property by the Guadalupe Town Council utilizing revenue sharing funds.