B-139486, JULY 2, 1959, 39 COMP. GEN. 3

B-139486: Jul 2, 1959

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

PROPERTY - FAILURE OF FORMER OWNERS TO REMOVE - SALE BY GOVERNMENT BUILDINGS AND IMPROVEMENTS ON LAND ACQUIRED BY THE GOVERNMENT WHICH WERE NOT REMOVED BY THE FORMER OWNERS. AT THE TIME THE GOVERNMENT IS ORDERED TO SELL THE PROPERTY ARE A PART OF THE INTEREST THE GOVERNMENT HAS TO SELL. IT IS SUGGESTED THAT THE PRICE BE BASED ON THE FAIR MARKET VALUE OF THE PROPERTY AS A UNIT (LAND WITH STANDING BUILDINGS AND IMPROVEMENTS ATTACHED). RASMUSSEN WERE THE OWNERS OF REAL PROPERTY AT BURKE. THE AMOUNT OF JUST COMPENSATION WAS DETERMINED BY A JURY IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA AND THE AWARD. WAS APPROVED AND CONFIRMED BY THE COURT IN AN ORDER AND JUDGMENT ENTERED JULY 30.

B-139486, JULY 2, 1959, 39 COMP. GEN. 3

PROPERTY - FAILURE OF FORMER OWNERS TO REMOVE - SALE BY GOVERNMENT BUILDINGS AND IMPROVEMENTS ON LAND ACQUIRED BY THE GOVERNMENT WHICH WERE NOT REMOVED BY THE FORMER OWNERS, IN ACCORDANCE WITH A RIGHT ACQUIRED UNDER STIPULATION AND COURT ORDER FOR WHICH THEY PAID THE SALVAGE VALUE, AT THE TIME THE GOVERNMENT IS ORDERED TO SELL THE PROPERTY ARE A PART OF THE INTEREST THE GOVERNMENT HAS TO SELL, CONTINGENT UPON THE RIGHT OF REMOVAL, AND IF THE FORMER OWNERS DESIRE TO EXERCISE THEIR REPURCHASE RIGHT SUCH BUILDINGS AND IMPROVEMENTS MUST BE PURCHASED; AND IN DETERMINATION OF THE VALUE OF THE PROPERTY, IT IS SUGGESTED THAT THE PRICE BE BASED ON THE FAIR MARKET VALUE OF THE PROPERTY AS A UNIT (LAND WITH STANDING BUILDINGS AND IMPROVEMENTS ATTACHED), LESS THE CURRENT FAIR MARKET VALUE OF THE RIGHT OF REMOVAL.

TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, JULY 2, 1959:

WE REFER TO YOUR LETTER OF MAY 19, 1959, CONCERNING THE REPURCHASE BY MR. AND MRS. GERNOT P. RASMUSSEN, UNDER PUBLIC LAW 85-825, APPROVED AUGUST 28, 1958, 72 STAT. 984, OF THE REAL PROPERTY FORMERLY OWNED BY THEM WHICH HAD BEEN ACQUIRED BY THE GOVERNMENT FOR THE CONSTRUCTION OF THE NOW ABANDONED AIRPORT PROJECT AT BURKE, VIRGINIA. YOU REQUEST OUR DECISION ON THE PROPRIETY OF THE USE BY THE GENERAL SERVICES ADMINISTRATION OF A PROPOSED FORMULA, SUBSEQUENTLY STATED, FOR DETERMINING THE REPURCHASE PRICE TO BE PAID BY THE FORMER OWNERS.

MR. AND MRS. RASMUSSEN WERE THE OWNERS OF REAL PROPERTY AT BURKE, VIRGINIA, CONSISTING OF 151.50 ACRES OF LAND AND IMPROVEMENTS THEREON (HOUSE NO. 1--- 5 ROOMS, HOUSE NO. 2--- 4 ROOMS, CHICKEN HOUSE AND BARN). BY A DECLARATION OF TAKING FILED OCTOBER 9, 1951, THE FEE SIMPLE TITLE TO THE PROPERTY, DESIGNATED AS TRACT NO. 95-48, BECAME VESTED IN THE UNITED STATES. THE AMOUNT OF JUST COMPENSATION WAS DETERMINED BY A JURY IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA AND THE AWARD, IN THE AMOUNT OF $34,659, WAS APPROVED AND CONFIRMED BY THE COURT IN AN ORDER AND JUDGMENT ENTERED JULY 30, 1953.

PRIOR TO THE ENTRY OF THAT ORDER THE UNITED STATES AND MR. AND MRS. RASMUSSEN ENTERED INTO A STIPULATION IN WHICH IT WAS AGREED THAT THE AMOUNT OF $20,600 REPRESENTED FAIR AND JUST COMPENSATION FOR THE BUILDINGS AND IMPROVEMENTS LOCATED ON TRACT NO. 95-48 AND THAT THE SALVAGE VALUE OF THE IMPROVEMENTS WAS $300. IT WAS FURTHER AGREED THAT MR. AND MRS. RASMUSSEN "SHALL BE PERMITTED TO REMOVE FROM THE SAID PROPERTY ALL OR ANY PART OF THE SAID IMPROVEMENTS, BUT SUCH REMOVAL SHALL NOT BE CARRIED OUT UNTIL AFTER FINAL JUDGMENT NOT SUBJECT TO FURTHER APPEAL.'

THE COURT BY AN ORDER OF JUNE 19, 1953, CONFIRMED THE AGREEMENT---

AND IT BEING REPRESENTED TO THE COURT THAT THE SAID GERNOT P. RASMUSSEN AND E. DORIS RASMUSSEN HAVE TENDERED TO THE CLERK OF THIS COURT THE SUM OF $300.00, THE SAID SUM REPRESENTING THE SALVAGE VALUE OF THE AFORESAID BUILDINGS AND IMPROVEMENTS, IT IS ACCORDINGLY * * *

AND IT IS FURTHER ORDERED THAT THE SAID GERNOT P. RASMUSSEN AND E. DORIS RASMUSSEN SHALL HAVE THE RIGHT TO REMOVE ANY OR ALL OF THE BUILDINGS AND IMPROVEMENTS LOCATED UPON THIS PARCEL, BUT SUCH REMOVAL SHALL NOT BE CARRIED OUT UNTIL AFTER FINAL JUDGMENT NOT SUBJECT TO FURTHER APPEAL.

AFTER THE VESTING OF THE FEE SIMPLE TITLE IN THE UNITED STATES MR. AND MRS. RASMUSSEN CONTINUED TO LIVE ON THE PREMISES, AS LESSEES OR TENANTS. WITH EVENTS LEADING TO THE EVENTUAL ABANDONMENT OF THE BURKE AIRPORT PROJECT AND THE INTRODUCTION OF H.R. 10045 WHICH, AS AMENDED, BECAME PUBLIC LAW 85-825, THE OCCUPANCY OF THE PREMISES BY THE RASMUSSENS HAS CONTINUED TO THE PRESENT TIME. IT FURTHER APPEARS THAT THE IMPROVEMENTS ON THE LAND HAVE NOT BEEN REMOVED AND THE RIGHT OF REMOVAL GRANTED THE RASMUSSENS STILL EXISTS.

PUBLIC LAW 85-825, APPROVED AUGUST 28, 1958, UNDER WHICH THE RASMUSSENS SEEK TO REPURCHASE THEIR FORMER PROPERTY, STATES:

THAT (A) NO TRACT OF REAL PROPERTY ACQUIRED BY THE SECRETARY OF COMMERCE UNDER THE ACT OF SEPTEMBER 7, 1950 (64 STAT. 770), FOR THE CONSTRUCTION OF THE BURKE AIRPORT, FAIRFAX COUNTY, VIRGINIA, SHALL, DURING THE NINETY-DAY PERIOD WHICH BEGINS ON THE DATE OF ENACTMENT OF THIS ACT, BE DISPOSED OF EXCEPT PURSUANT TO SECTION 13 (H) OF THE SURPLUS PROPERTY ACT OF 1944 (50 APP. U.S.C. 1622 (H) ( OR SECTION 203 (K) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949 (40 U.S.C. 484 (K) ).

(B) WHERE ARRANGEMENTS SATISFACTORY TO THE ADMINISTRATOR OF GENERAL SERVICES HAVE NOT BEEN MADE WITHIN THE NINETY-DAY PERIOD PROVIDED IN SUBSECTION (A) FOR THE DISPOSAL OF ANY TRACT OF REAL PROPERTY, OR PART THEREOF, PURSUANT TO SUCH SECTION 13 (H) OR 203 (K), THEN WITHIN THE NEXT NINETY DAYS THE FORMER OWNER OF SUCH TRACT (OR IF HE IS DEAD, HIS SPOUSE, OR IF THERE IS NO SURVIVING SPOUSE, HIS CHILDREN) SHALL HAVE THE RIGHT TO REPURCHASE SUCH TRACT, OR PART THEREOF, FROM THE UNITED STATES AT A PRICE DETERMINED BY THE ADMINISTRATOR OF GENERAL SERVICES ADMINISTRATION TO BE EQUAL TO THE CURRENT FAIR MARKET VALUE.

WHILE PUBLIC LAW 85-825 GRANTS FORMER OWNERS OF PROPERTY ACQUIRED BY THE UNITED STATES FOR THE CONSTRUCTION OF THE BURKER AIRPORT THE RIGHT TO REPURCHASE WITHIN A NINETY-DAY PERIOD WHICH EXPIRED SEVERAL MONTHS AGO, IT APPEARS THE DELAY IN EFFECTING THE SALE UNDER THE ACT IS DUE TO ADMINISTRATIVE DIFFICULTY IN DETERMINING THE VALUE OF THE GOVERNMENT'S INTEREST TO BE SOLD; THUS THE RIGHT TO REPURCHASE MAY BE CONSIDERED AS BEING HELD IN ABEYANCE.

THE PROBLEM INVOLVED IS STATED IN YOUR LETTER AS FOLLOWS:

SINCE THE RASMUSSENS' RIGHT OF REMOVAL IS STILL IN EFFECT, THE INTEREST WHICH THE GOVERNMENT HAS TO SELL IN THIS CASE IS THE LAND AND BUILDINGS AND IMPROVEMENTS THEREON, SUBJECT TO THE RIGHT OF REMOVAL OF THE BUILDINGS AND IMPROVEMENTS. SHOULD THE RASMUSSENS REMOVE THE BUILDINGS AND IMPROVEMENTS PRIOR TO THE TERMINATION OF SUCH RIGHT OR PRIOR TO THE TIME THEY CAN BE DEEMED TO HAVE ABANONED THE BUILDINGS AND IMPROVEMENTS, THEN ALL THE GOVERNMENT WOULD HAVE TO SELL WOULD BE THE LAND BUT, UNTIL SUCH TERMINATION OR ABANDONMENT AND IN THE ABSENCE OF REMOVAL, THE BUILDINGS AND IMPROVEMENTS ARE CHARGED WITH RASMUSSENS' RIGHT TO REMOVE THEM AND THE GOVERNMENT CAN SELL THEM ONLY SUBJECT TO THE RIGHT OF REMOVAL.

IN THIS AND SIMILAR CASES IT IS PROPOSED "THAT THE FORMER OWNERS WHO RESERVED SALVAGE RIGHTS BE REQUIRED TO PAY THE CURRENT FAIR MARKET VALUE FOR THE LAND, PLUS THE ESTIMATED COST OF REMOVING THE IMPROVEMENTS, RETURNING THEM TO THE PRESENT SITE AND RESTORING THEM TO THE CONDITION THEY ARE NOW IN.'

THE RIGHT WHICH THE RASMUSSENS ACQUIRED UNDER THE STIPULATION AND COURT ORDER OF JUNE 19, 1953, FOR WHICH THEY PAID THE SALVAGE VALUE OF $300, WAS "THE RIGHT TO REMOVE ANY OR ALL OF THE BUILDINGS AND IMPROVEMENTS LOCATED UPON THIS PARCEL.' THEIR PROPERTY INTEREST IN THE BUILDINGS AND IMPROVEMENTS IS AT MOST A CONTINGENT ONE, DEPENDENT UPON THE CONDITION PRECEDENT OF PHYSICAL DETACHMENT AND REMOVAL OF THE BUILDINGS AND IMPROVEMENTS FROM THE PREMISES. UNTIL PHYSICAL DETACHMENT AND REMOVAL OCCURS THE BUILDINGS AND IMPROVEMENTS ARE A PART OF THE PROPERTY OF THE UNITED STATES. CF. WESTERN MARYLAND DAIRY V. MARYLAND W. AND E. CO., 126 A. 135; ESBJORNSSON V. BUFFALO INSURANCE CO., 89 N.W.2D 893.

AS STATED IN YOUR LETTER THE INTEREST WHICH THE GOVERNMENT HAS TO SELL IN THIS CASE IS THE LAND AND BUILDINGS AND IMPROVEMENTS THEREON, SUBJECT TO THE RIGHT OF REMOVAL OF THE BUILDINGS AND IMPROVEMENTS. THAT WAS THE INTEREST OF THE UNITED STATES DURING THE NINETY-DAY PERIOD WITHIN WHICH PUBLIC LAW 85-825 GRANTED THE RASMUSSENS A RIGHT TO REPURCHASE. THAT IS THE CURRENT INTEREST OF THE UNITED STATES; AND WE ARE OF THE VIEW THAT IS THE PROPERTY INTEREST THE RASMUSSENS MUST PURCHASE IN THE EXERCISE OF THEIR RIGHT TO REPURCHASE UNDER PUBLIC LAW 85-825.

THE SALE PRICE OF THE PROPERTY, EQUAL TO THE CURRENT FAIR MARKET VALUE, IS BY PUBLIC LAW 85-825 FOR DETERMINATION BY THE ADMINISTRATOR OF GENERAL SERVICES ADMINISTRATION. WITHOUT INTENDING TO INDICATE THE FORMULA PREVIOUSLY STATED SHOULD BE REJECTED SINCE AS STATED BY YOU THE DETERMINATION OF CURRENT FAIR MARKET VALUE IS LEFT TO YOUR DISCRETION, WE SUGGEST, FOR YOUR CONSIDERATION, IN CASES SUCH AS THE RASMUSSENS-, WHERE UNDER PUBLIC LAW 85-825 THE PROPERTY WILL BE PURCHASED AS A UNIT (LAND WITH STANDING BUILDINGS AND IMPROVEMENTS ATTACHED), THAT THE PRICE BE DETERMINED ON THE BASIS OF THE FAIR MARKET VALUE OF THE PROPERTY AS A UNIT, LESS THE CURRENT FAIR MARKET VALUE OF THE RIGHT OF REMOVAL.

THE LATTER FORMULA IS VIEWED AS IN CONSONANCE WITH THE SPIRIT OF PUBLIC LAW 85-825 AND AS PROPERLY EQUATING THE INTERESTS OF THE UNITED STATES AND THE RASMUSSENS.