Dear Mayor Baquet:
We received your request for an opinion. Specifically, you inquire as to the applicability of Louisiana's Public Bid Law to a lease-purchase agreement which the City of Ville Platte is considering entering. Your request indicates that a developer will actually purchase the property and construct the buildings to be leased. Upon completion of the construction, the City will then lease the property for twenty-five years. The City will actually own the land and improvements thereon at the end of the lease period.
Louisiana's Public Bid Law is found at La. R.S. 38:2211, et seq. The law provides that all public work, including labor and materials, and all purchases of materials or supplies, all of which exceed the statutory limit, which are to be paid out of public funds and done by a public entity, shall be advertised and let by contract to the lowest responsible bidder. Public work is defined as the erection, construction, alteration, improvement or repair of any public facility or immovable property owned, used, or leased by a public entity. Clearly, the City of Ville Platte is a public entity as that term is defined in the statute. Likewise, the construction of a police station, jail or city hall by a City is a public work as defined in the statute. The transaction which you describe indicates the lease of land with improvements rather than the construction of a public work by the City.
Our office has consistently opined that there are no provisions in our law which mandate that the acquisition or lease of immovable property by a political subdivision be let by public bid. Ops. Atty. Gen. 99-360, 98-258, 93-175. Accordingly, the City of Ville Platte may lease immovable property, and the improvements thereon, without being subject to Louisiana's Public Bid Law.
You also inquire if the City of Ville Platte must get approval from the State Bond Commission for such a transaction. A lease-purchase such as that described in your request is considered to be a credit sale and thus requires the advance approval of the State Bond Commission. See La. R.S. 39:1410.60.
We trust this answers your request. If you have any questions or need additional information, please contact our office.
Yours very truly,
RICHARD P. IEYOUB ATTORNEY GENERAL
BY: TINA VICARI GRANT Assistant Attorney General
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