Public authorities include the New York City Transit / Metropolitan Transit Authority, New York City Housing Authority (NYCHA), the Port Authority of New York and New Jersey and a few others. These are all provate entities created by State governments.Public authorities' ability to dispose of property is described in Sec. 1266 of the New York Public Authorities Law. In general, authorities may sell, lease, license and grant easements or any other interest in any property they own.
Sales for Fair Market Value
Generally, the property of authorities may only be sold or leased at or above fair market value, through a public request for proposal (RFP) process. The determination of fair market value requires an independent appraisal. Bids made in response to RFPs must be publicly disclosed and reviewed by the authority's board. A winning bid must be selected based on price and the best interest of the Authority and the State.
Sales for Below Market Value
Public authorities can sell property for below fair market value, but must follow a specific process when they do. The authority proposing the transaction must provide certain specified information to the authority’s board, including a description of the asset; an appraisal of (or other information establishing) its fair market value; a description of the purpose of the transfer, and “a reasonable statement of the kind and amount of the benefit to the public resulting from the transfer, including but not limited to the kind, number, location, wages or salaries of jobs created or preserved as required by the transfer, the benefits, if any, to the communities in which the asset is situated as are required by the transfer;” and a statement of the value to be received compared to the fair market value. Public Authorities Law §2897(7) describes the process.
Importantly, for below-market value transfers, the benefit to the public is the key issue.