The Office of Real Estate works in conjunction with other DGS master planning components to maximize the effective use of assets owned and leased by the state.
The Department of General Services acquires all types of property to fulfill the various programmatic needs of state agencies. Acquisitions range from commercial office buildings and prison sites, to homes for the developmentally disabled and Maryland Army National Guard sites.
The state may acquire either full or partial interest in property based on its intended use and available financial resources. Most acquisitions require two appraisals of the property to establish its fair market value for negotiating purposes.
When a state agency initiates a request to DGS to acquire property, DGS contacts the property owner. If the owner is willing to consider selling the property, appraisals are completed by independent appraisers selected by an open bidding process. Studies are also made regarding the nature of the property and other issues that may affect value, including environmental assessment findings, timber values, etc. Once the real estate appraisals have been reviewed and approved, negotiations begin.
Once the property owner and DGS agree on acceptable terms of purchase, a contract is prepared and presented to the Board of Public Works for approval. The board, composed of the governor, comptroller and treasurer, must approve all real estate acquisitions negotiated by the Department of General Services. Upon Board of Public Works approval, DGS handles the settlement of the property to complete the sale.
If the seller of the property and DGS cannot agree on the terms of sale, the state may acquire the property by exercising its power of eminent domain or condemnation (the purchase of land for public use). The state must first negotiate in good faith to acquire the property from the owner and offer no less than fair market value as determined by independent appraisals. Prior to filing in court, DGS must also secure approval both from the agency seeking the property and from the Board of Public Works.
The Attorney General's office handles the process of eminent domain, according to procedures established by law. In court, the state must prove the public necessity for acquiring the property and justify its financial offer to purchase. The property owner is entitled to a jury trial. A negotiated settlement can be agreed to at any point during the proceedings subject to Board of Public Works approval.
The State of Maryland owns extensive acreage throughout the state, which is sometimes required for roads, utility lines, buffer areas, or other uses to assist nearby community development. In other cases, property is no longer needed by the state in the short or long term.
To dispose of state property, the using agency notifies the State Clearinghouse that it no longer needs the property. If there are no other governmental agencies interested in utilizing the property, and if it is determined that the state's interest is better served to dispose of it, the Board of Public Works declares the property to be surplus and approves it for disposal.
The Department of General Services is responsible for determining the method of sale and establishing the value to be received by the state. DGS negotiates the terms of the sale with the purchaser and brings the completed transaction to the Board of Public Works for final approval.
Lease Management and Procurement
DGS oversees the state's leasing activities between state agencies and commercial and government landlords. Leasehold agreements are in place for offices, warehouse space, boat slips, storage areas and other rental needs.
Leases are procured in accordance with the State Finance and Procurement Law, DGS issues a Request for Proposal (RFP), which describes the desired space, including size, purpose and general location. RFPs are advertised on the eMaryland Marketplace web site and in local newspapers.
RFP responses are scored as Competitive Sealed Proposals, a procurement method that combines price and technical evaluation to insure the best possible dollar value. After the initial evaluation, landlords may be asked to clarify their proposal and submit a "Best and Final Offer." To insure fairness, proposals are kept strictly confidential during the evaluation process. All leases must receive final approval from the Board of Public Works before they can be executed.
DGS conducts, when necessary, inspections of leased properties to ensure that landlords and agencies are complying with lease terms. The department will step in to enforce the lease should resolution at the facility level prove difficult.
Portfolio Management tracks and matches vacant space in State-owned and capital lease properties with State agency requirements. The staff reviews the rent components paid to the leaseholders on capital leases, debt service, and operating costs. The unit identifies rent paid to DGS by agencies and determines if all federally and specially funded programs are properly assessed.