KRS 91A.180: Sale or lease of property -- Private improvements of governmentally

owned realty under a conveyance and leaseback agreement.

(1) The legislative body of any city or urban -county government may sell or lease

property, including any interest in real p roperty, of the city or urban -county

government which is not needed or has become unsuitable for public use by the city

or urban-county government, or which property would be more suitably consistent

with the public interest for some other use of a public nature.

(2) When the legislative body of a city or urban -county government finds that the

purposes of one (1) or more of its departments and the public purposes of the

Commonwealth would be promoted by the construction of buildings and

improvements on lan d owned by the city or urban -county government, it may

authorize the construction of such buildings and improvements by private

entrepreneurs with private capital under a conveyance and leaseback agreement

authorized by subsection (3) of this section.

(3) The legislative body of a city or urban -county government may, subsequent to a

finding made pursuant to subsection (2) of this section, convey the fee interest in the

particular real property to a private individual, corporation or partnership, subject to

a written agreement by such private entrepreneur to construct such buildings and

improvements on the fee simple holding and then subsequently, after placing a

mortgage necessary to fund the capital improvements on the fee interest by the

private entrepren eur, reconvey the fee title back to the city or urban -county

government. The city or urban-county government shall in turn execute a long term

lease on the real property back to the private entrepreneur. Under such conveyances

the mortgage shall not consti tute a general obligation or debt of the city or urban -

county government. The city or urban -county government may, in event of default,

redeem the mortgage if it so elects. In such a leaseback arrangement, with suitable

rentals, the actual operation of suc h constructed facilities shall be conducted solely

by the entrepreneur or his agent, but the operation will be considered a public

purpose and public use of the property. However, the city or urban -county

government and the lessee shall agree that, and wit h adequate insurance, the city or

urban-county government shall be held harmless in connection with property loss

and general liability for injuries or death suffered on the property. Under the

leaseback agreements the facility will not be considered a gov ernmental facility or

function of the city or urban-county government.