Request By:
Mr. William B. Hildreth
Property Valuation Administrator
Warren County Courthouse
Bowling Green, Kentucky 42101
Opinion
Opinion By: David L. Armstrong, Attorney General; By Alex W. Rose, Assistant Attorney General
In your letter to the Attorney General, you ask whether a city may purchase property outside its corporate limits and develop the property through the issuance of revenue bonds.
You give the following factual situation: The City of Oakland, a city of the sixth class, has purchased land within the corporate limits of the City of Bowling Green. The City of Oakland issued revenue bonds pursuant to KRS 103.200 et seq. for the construction of a nursing home. The facility was then leased to a private corporation, Bowling Green Health Care Center, Inc.
We have insufficient information to determine whether the facility serves any purpose set out in KRS 103.210 (i.e., relief of unemployment) and therefore, we assume it does. See,
Manning v. Fiscal Court of Jefferson County, Ky., 405 S.W.2d 755 (1966) for a discussion of this requirement.
Concerning your question as to a city's right to purchase and develop land outside its corporate limits, the Kentucky Court of Appeals (now Supreme Court) has held in
Norvell v. City of Danville, Ky., 355 S.W.2d 689 (1962) that a city does have such a right. In that case the City of Danville purchased land that was within the corporate limits of Junction City. Danville issued revenue bonds pursuant to KRS 103.200 et seq. and constructed a factory building upon the land. The building was leased to Fram Corporation, a private corporation. Thus, following this case, the City of Oakland may purchase and develop through the issuance of revenue bonds property within the corporate limits of the City of Bowling Green.
We would point out, however, that the Court in Norvell specifically stated that when a city purchases property outside its corporate limits, it does so in the same manner and on the same footing as a private corporation and exercises no sovereignty over the property. (See pages 691-692.) We have insufficient information to determine whether the property would be exempt from property taxation. However, from the facts as they have been presented to us, it would appear that the property is not exempt.