How to legally separate structures from land (vents, housing, insurance)

[maurich]

I want to donate the structures of my property to a municipality- and keep the land it sits on. The idea is to then do a ground lease-back of the land. Is this possible and how would I legally do this?

[chet everett]

Wow, interesting idea. I see a great many hurdles to this.

Have the municipal authorities agreed to this? They have some use for the structure and are willing to cover the liability from any actions that happen.

Is it your desire to have the LAND generate income, but NOT the structure? I don't see how liability insurance would be written for both of you and not require MASSIVE overlap in coverage...

I doubt you can do that. No chance the municipality has agreed to move the structure to another parcel of land. If that is the case, you are going to have to do A LOT of leg work to be sure that the "house" will withstand moving and that the municipality can afford to have it moved.

What is "special" about the land and separate from the structure? Seems to me most municipalities would want BOTH or maybe just the land. Why do think the 'leaseback' is something that they would find attractive?

[eric#1]

I think at some point most of the liability for the home is on the house mover being contracted. I live in a historic town, and have seen many homes moved, since they rarely grant demo permits for historic structures, so if they are in a commercially zoned area there is a greater value in the land without the structure. Original owner often keeps the land and donates or sells the house.

[chet everett]

Originally Posted by eric#1

I think at some point most of the liability for the home is on the house mover being contracted. I live in a historic town, and have seen many homes moved, since they rarely grant demo permits for historic structures, so if they are in a commercially zoned area there is a greater value in the land without the structure. Original owner often keeps the land and donates or sells the house.

See in commercial uses a "leaseback" is a mechanism for the user of the structure (say a fast food company) to totally control the structure (from the golden arches on the roof to the sanitary tile lining the cooking area) and PAY the land owner for the right to have the property for a very long time (decades).

Municipalities are not like this. They generally do not have revenue generating activities in any normal sense of the word. Now I can imagine some whacky idea to run tours through some historic structure, or maybe use a historic home as some kind of "banquet hall", but from what I know about liability insurance tour groups and drunken wedding receptions I don't think any town would be eager to foot that kind of expense and I know the revenues are also NOT going to be something that a land owner could expect would be enough to even break even after taxes and such...

[Austin-Willy]

If you could be more specific about exactly what you plan to do, there may be some options. Are you intending to lease part of the property (the part without the structure) to someone else? Is it important to you that you get the land where the structure is located back at some point?

[eric#1]

In my town (Deadwood) the city has it's fingers in grocery stores, land trusts, bike rental shops, information centers, museums, parking structures/lots, gunfight shows. Some they own and lease-back ie (the local bike shop, and a Segway tour) some they lease from others because lack of space for services. Some they just sit on and others they even operate (gun shows) While leasing spce to do it. One building is being saved to archive historic mining artifacts. I don't know the legalities/ liabilities, of these leases and lease-backs. None of these things pencil for the city, but they preserve, and add to the experience from vsitors while helping keep it somewhat affordable for teachers police etc.. So not only is our town involved in these things it is often eager.

[chet everett]

Man I thought SD had a "frontier spirit" -- sound more like a Italian style "socialist democracy" where they have no problem propping up darned near any poorly conceived business. Do local tax revenues subsidize all those boondoggles? Does any one feel like maybe this is a bad idea??

I can see a museum or other true preservation but a GROCERY store and BIKE SHOP?!?

YIKES!!!!

[maurich]

Cant get into much details but the idea comes as a creative way to solve a land grab issue. this particular city wants the property (the land) for its own multimillion dollar development but is trying to steal it from me by not allowing me to restore the apartments & is adamant to tear down the structures and put a hefty lien on it - and get it thru a tax sale- instead of buying it at fair mkt value (eminent domain). so i wanted to DONATE the structures (that are salvageable and can be restored) to the city- to use for affordable housing in community. this puts the onus on this city to either restore it or tear it down (at their own expense). the land still is in my control that i can do a 99 yr ground lease to the city to do whatever they wish to do on it. I know this technique is used in many other countries and is also used in the U.S. So any experts on how to impliment this issue?

[chet everett]

If this a TIF or similar issue the horrible precedent of the Kelo case leaves little room for any sort of maneuver that subvert the town's attempt to use eminent domain.
Kelo v. City of New London - Wikipedia, the free encyclopedia
There are few land rights groups that are trying to find another test case but the odds are slim and costs are high.
WeHoNews.com:
There Goes the Neighborhood: A Fight Over Defining 'Blight' - WSJ.com
Senate passes private property amendment | AP Texas News | Chron.com - Houston Chronicle

You might have more luck working with your State legislature that sometimes are more level headed than the local yokels.

If you try to defend this on your own be prepared for HUGE legal bills, lawyers know that when the opponent has the bottomless pit of the taxpayer to draw on things crazy expensive...

[Austin-Willy]

Originally Posted by maurich

Cant get into much details but the idea comes as a creative way to solve a land grab issue. this particular city wants the property (the land) for its own multimillion dollar development but is trying to steal it from me by not allowing me to restore the apartments & is adamant to tear down the structures and put a hefty lien on it - and get it thru a tax sale- instead of buying it at fair mkt value (eminent domain). so i wanted to DONATE the structures (that are salvageable and can be restored) to the city- to use for affordable housing in community. this puts the onus on this city to either restore it or tear it down (at their own expense). the land still is in my control that i can do a 99 yr ground lease to the city to do whatever they wish to do on it. I know this technique is used in many other countries and is also used in the U.S. So any experts on how to impliment this issue?

It sounds like you already have your answer. This kind of transaction is way too complicated to expect to get any kind of solid guidance as to implementation from a website like this. But if the city is really trying to steal your property, why would they ever agree to enter into a ground lease that prevents them from doing just that?