HomeMy WebLinkAbout2026-047 City Surplus Real Property SaleAugust 07, 2026 Report No. 2026-047
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
UPDATE - City Surplus Real Property Sale (Planned for Q4 2026)
EXECUTIVE SUMMARY:
This report provides an update following the March 3, 2026 Work Session presentation on
preparations for the planned sale of City-owned surplus real property. The sealed bid sale is
tentatively scheduled for the fourth quarter of 2026. Staff continue to finalize public-facing
materials, modernize sealed bid procedures, and coordinate interdepartmentally to ensure a
transparent and efficient sale process.
BACKGROUND:
The opportunity to identify City surplus real property for potential sale was discussed as part of
the 2025 Budget Task Force. Additionally, implementing a regular review and assessment of the
City’s real property inventory was one of the recommendations made by Matrix Consulting
Group’s operational assessment of the City’s Real Estate Division operations. Going forward, this
recurring review will be performed annually in concert with the Budget process and is essential to
(i) optimize public programming and long-range planning efforts, (ii) ensure properties are
developed in alignment with City priorities, and (iii) prevent overlooked assets from remaining
underutilized or unprogrammed.
Real Estate conducted a preliminary review of properties in the City’s real property inventory,
considering properties unsold from a prior Surplus Sale, inquiries received from the general public,
physical property conditions, and current City use or future public need.
Next, staff initiated a collaborative, cross-department review with department stakeholders for
which the properties were purchased. This review provided operating departments with an
opportunity to evaluate and identify their current and future programming needs, master plan
requirements, and City initiatives.
Finally, the Finance Department evaluated the preliminary list of surplus properties (shown
below), provided data relating to initial funding sources used to procure the properties, and
identified any revenue restrictions that may apply to the proceeds of the sale.
ADDRESS LEGAL ACERAGE DCAD #
S. Mayhill & E.
McKinney St. A0417A M. FORREST, TR 152-154 4.02 37239, 37242,
37244
602 Rose St. COLLEGE BEAUTY ADDN BLK 2
LOT 1R 0.27 636456
Riney Rd. & N. Elm St. A0810A N.H. MEISENHEIMER, TR 8 0.32 77740
100 Block - Maple St. A0759A WM LOVING, TR 196 0.0494 76394
702 S. Locust St. BLOUNT BLK D LOT 1 0.3766 33416
August 07, 2026 Report No. 2026-047
709 S. Locust St. BLOUNT BLK B LOT 5 0.46 26978
Paisley St. & Audra Ln. A0055A J. BROCK, TR 11 0.601 29531
During a March 3, 2026, Work Session presentation (ID: 25-2294), City Council provided staff
with direction to move forward with conducting a sealed bid sale of the identified properties
meeting staff-recommended criteria, shown below.
DISCUSSION:
Public Interest and Marketing
To date, Real Estate staff have developed and implemented tools to track public interest in the
surplus property sale in advance of official advertising, through the official marketing and award
periods, and closing.
• Digital signup sheet- To date, 18 discrete entries have been received through the staff-
monitored Surplus Property Signup link requesting to be notified of the upcoming sale.
• The surplus property list will be posted on the City’s Development Services-Real Estate
website.
• For Sale signs have been designed and will be placed on each property.
• Newspaper ads will run for the mandatory two weeks prior to bid closing.
• When the sale goes live, public inquiries will be directed to Procurement to ensure all
potential bidders have access to the same information.
• BIDDERS ARE REQUIRED TO PERFORM THEIR OWN DUE DILIGENCE ON
THE PROPERTIES PRIOR TO BIDDING. Staff recommend potential bidders
schedule and attend a Pre-Application Conference (PAC) with the Development
Assistance Team (DAT) to identify or confirm zoning, land use regulations, easements,
and verify property can be used as desired.
Bid Process Preparation
Real Estate and Procurement staff have updated the sealed bid process by:
• Refreshing bid packets and submission instructions
• Documenting evaluation criteria to ensure transparency
• Finalizing internal controls for timestamping, bid openings and awards of winning bids
Interdepartmental Coordination
August 07, 2026 Report No. 2026-047
Real Estate staff are working closely with Legal, Procurement/Purchasing, Communications, and
Finance to ensure alignment across all components of the sale process.
Timeline
Preparations remain on track for a Q4 2026 surplus property sale, consistent with prior
expectations.
Upcoming milestones include:
✓ Finalizing bid packets,
o Publishing the Notice of Sealed Bid Sale,
o Opening and closing the sealed bid window,
o Returning to Council for action on bid results.
CONCLUSION:
Real Estate and Procurement staff continue to make steady progress toward advertising the
upcoming Surplus Property Sealed Bid Sale in Q4, 2026. Early public interest is strong, internal
procedures have been implemented, and marketing materials are now being finalized. The
properties will be advertised for a minimum of two weeks in August and bid results will be
presented to Council for consideration in September.
ATTACHMENTS:
Work Session Presentation (March 3, 2026 WS ID: 25-2294)
STAFF CONTACT:
DeAnna Cody
Deputy Director
Development Services-Real Estate
Mark Mastroleo
Real Estate Specialist
Mark.Mastroleo@cityofdenton.com
(940) 349-8076
REQUESTOR: Staff Initiated
STAFF TIME TO COMPLETE REPORT: 1 hour
PARTICIPATING DEPARTMENTS:
Development Services, Procurement, Finance
City Real Property Inventory Management and
Potential Surplus Property Sale Program
Real Estate Division
File ID #25-2294 March 3, 2026 1
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The purposes of this Work Session are to:
1. Present the Council with background information on
A. City owned real property inventory
B. Criteria used to identify potential surplus properties
C. Methods of sale of surplus property
2. Receive direction on the sale of properties identified by staff as surplus.
3. There is a Closed Meeting placeholder if desired for further property discussions.
Purpose
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Approximately 650 parcels & 4,700 acres of real property in City inventory- Public Facilities & Infrastructure- City
Hall, Dev Service Center, Parks & Rec., Airports, Libraries, Fire Stations, Streets, Utilities, and Drainage
City Real Property Asset Inventory
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SUPPORT FOR REVIEW OF THE PROPERTY INVENTORY:
•Recommendation from the Matrix Consulting Group’s assessment of the Real Estate operations, practices and
procedures
•2025 Budget Task Force
A collaborative, cross-departmental review timed with the budget cycle is essential to manage the City’s 650-
parcel real property inventory.
ANTICIPATED IMPLEMENTATION OUTCOMES:
Recurring reviews support the Real Estate Division’s efforts to collaborate with Planning, Parks, Legal, Finance, Capital Projects
and the utility departments to:
•prevent overlooked assets from remaining inactive/unprogrammed;
•support long-range planning efforts;
•ensure alignment with City development priorities; and
•leverage GIS and property data systems to evaluate surplus opportunities, confirm property status, and determine potential
reuse or sale.
Background
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Staff took the following actions to develop a preliminary list of surplus properties based on the criteria below and recommends
the following process going forward with the City’s budget cycle:
1. Identified potential surplus properties based on the following criteria
A. Unsold from prior 2017 Surplus Sale list
B. Inquiries from general public
C. Cross-Department Reviews
D. Physical Conditions – current condition: size, shape, developability, environmental, adjacent property
E. Legal & Regulatory Review – clear title, deed restrictions, past retention or reclamation period
F. Potential Highest and Best Use: sell vs lease, exchange, hold for future public use
2. Conducted cross-departmental reviews to determine current and/or future use plans for the properties and to identify any proceed
restrictions.
A. Operating Departments
a. Initial Public Purpose-Overage from prior project that has been completed?
b. Operational Assessment – Actively used? Planned programming? Project funding available or anticipated?,
c. Overage from prior project that has been completed,
d. On a master plan or identified City initiative?,
e. Held in inventory over 10 plus years, vacant land, environmental considerations,
B. Finance Department-Revenue restrictions from sale proceeds based on funds used to procure
3. Next Steps:
A. March 3, 2026-Work Session seeking Council direction on the disposition of properties identified as surplus, meeting the above criteria
B. Ongoing- Periodic Updates presented to the Council through Informal Staff Reports and/or Legal Status Reports
Surplus Property Process and Selection Criteria and Next Steps
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State law and the City charter currently identify available methods of sale of City property via
Sealed Bid Sale Process - Auction
This option is available for developable tracts of land or at City’s discretion.
Process- Advertising a list of surplus properties in the local newspaper for 2 consecutive weeks
All bidders will be required to submit a completed City Surplus Property Sealed Bid Packet through
Purchasing/IONWAVE in order to participate in the sealed bid sale.
Bids will be compiled and presented to Council for decision to accept or reject bid offers.
Direct Sale Process - to a foundation, government agency, or an abutting owner*
This option is available for property interests obtained for streets, rights-of-way or easements; land the
City wants to have developed, land in a reinvestment zone
Process-
Determine if an RFP is appropriate to accomplish the City’s initiative or mission
Negotiate an agreement or contract terms for approval by the Council;
Market values will be determined by an independent appraisal or at auction
Restrictions for each method of sale largely depend on the property condition and
sale price (market value).
Statutes Governing Disposition of City-Owned Property
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Identified Surplus Properties-
7 Properties – ~6 Acres
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Staff Recommendation:
Outcome:
•Based on staff's estimation, if all properties sold, the sealed bid could result in approx. $1M to $2M in sales.
•The funds from the sale would be returned to the original source used for purchase.
•Move forward using noted criteria to identify and sell potential surplus real property
•Dispose of currently identified surplus properties by sealed bid auction
•Set a minimum bid or reserve price
•Provide the Council with periodic updates via Informal Staff Reports and/or Legal staff reports
•Bring the result of the bids forward for City Council consideration in approximately 4-6 months
File ID #25-2294 March 3, 2026
Request for Direction
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1. Direction to accept staff recommendations and
proceed with procedures and criteria used to
identify surplus property; and
2. Direction to sell the properties identified as
surplus by sealed bid
File ID #25-2294 March 3, 2026