2 Del. Admin. Code § 2311 – Long-Term Lease Policies and Practices

2300 Division of Planning and Policy

2311 Long-Term Lease Policies and Practices

1.0 Long-Term Leases

Any future lease of Department-owned property for a term of 5 years or more inclusive of any renewal option shall be deemed a "long-term lease", and the Department shall follow the regulation below to determine the value of the leasehold interest. This regulation shall not apply to any leaseback transactions; i.e. any lease by and between the Department and the owner /tenant in legal occupancy on the date the property was originally acquired by the Department.

2.0 Competitive Sealed Bid Process

Unless the Department seeks to proceed under Section 3.0 below, the Department will provide an opportunity for parties to publicly bid on the lease of the property through a competitive sealed bid process. The Department shall retain the right to reject all bids. Notice of the proposed leasing will be advertised at least 20 calendar days prior to bid opening in a newspaper of general circulation in the county in which the parcel is located. Conspicuous notice shall also be displayed on the property in question at least 20 calendar days prior to bid opening. The second notice will be published approximately 10 calendar days prior to bid opening in a newspaper of general circulation in the county in which the parcel is located. The Department shall offer the property for lease beginning at not less than the lowest approved market value range established by a qualified licensed appraiser.

3.0 Economic and Civic/Benevolent Purpose Consideration

3.1 In the event that the Department is asked by a party, or otherwise considers entering into a long-term lease for economic development consideration or civic/benevolent purposes, the Department will first determine market value rent through a qualified licensed appraiser. For purposes of this regulation, an economic development or civic/benevolent purpose proposal is defined as changes to material conditions under the lease that result in less direct monetary value to the Department in exchange for the development of jobs, economic growth or the furtherance of a civic/benevolent purpose. The purpose of this value determination is to allow for a fair, thorough and transparent consideration of the proposed incentive or grant being considered.
3.2 In the cases where the request involves a potential civic or other benevolent purpose, the Department shall hold a public meeting in the general vicinity of property in question. The notice shall clearly state the proposed lessee, the proposed lease term, the estimated value of the reduced lease terms and such notice will be advertised at least 20 calendar days prior to the hearing in a newspaper of general circulation in the county in which the parcel is located. Conspicuous notice shall also be displayed on the property in question at least 20 calendar days prior to bid opening. A second notice will be published approximately 10 calendar days prior to bid opening in a newspaper of general circulation in the county in which the parcel is located. In addition, the Department shall notify in writing and seek input from the elected State Representative and Senator of the district where the property is located. Upon conclusion of the hearing and a period of 10 calendar days for additional written comments, the Secretary will determine whether or not the Department will lease the property as proposed.

4.0 General Policies Governing Long-Term Leases of Department Owned Property

4.1 Form leases shall be prepared by legal counsel for the Department and such forms may be revised as needed for particular lease transactions.
4.2 To be valid, all long-term leases or modifications thereof shall require the review of legal counsel for the Department and the signature of the Secretary or the Secretary's designee.
4.3 If Federal aid was used to acquire the property suggested for lease, the Department will request approval from the FHWA to lease the property at the proposed terms. If the FHWA does not provide its approval, then the Department shall not lease the property at those terms.

29 DE Reg. 324 (10/01/25)

14 DE Reg. 196 (09/01/10)

29 DE Reg. 324 (10/01/25)