CEO 84-85 -- August 9, 1984

CONFLICT OF INTEREST

CITY COUNCIL MEMBER PURCHASING SURPLUS CITY LAND FOR RESIDENCE

To: (Name withheld at the person's request.)

SUMMARY:

A prohibited conflict of interest would be created were a city council member to purchase surplus city land for use as his residence. CEO's 83-26, 83-24, 81-86, 79-10, 77-15, and 76-188 are referenced. However, under the rationale of CEO's 81-51 and 76-75, no prohibited conflict of interest would be created were a city council member to purchase improved real property from a developer for use as his residence, where the property had been purchased from the city as surplus property and then improved by the developer.

QUESTION 1:

Would a prohibited conflict of interest be created were a city council member to purchase surplus city land for use as his residence?

This question is answered in the affirmative.

In your letter you advise that ...., a member of the Delray Beach City Council, is considering purchasing an unimproved double lot currently listed as surplus property by the City for use as his residence. You also advise that in disposing of surplus property the City Administration, at the direction of the City Council, compiles a list of all property which is declared surplus and available for sale. Whenever an offer is made for a parcel listed on the surplus property schedule, an appraisal is done on the property. If an appraisal of the property already had been made, the appraisal would be updated unless it had been done very recently. All offers for sale are discussed at a public meeting in terms of the appraisal, and the Council's tentative approval or disapproval is given. If an offer tentatively is approved, the potential sale of the property along with the details of the sale are publicly advertised for two weeks. At the end of that period a public hearing is held at which citizen comments are heard and other offers can be considered.

We previously have advised that public employees involved in the acquisition or disposition of public property may not purchase surplus property by bid at a public auction or even by a sealed, competitive bidding process. See CEO 83-24, CEO 83-26 and CEO 76-188. We also have advised that members of governing bodies of counties and municipalities may not purchase surplus property by bid at auction or by sealed bid. See CEO 81-86, CEO 79-10 and CEO 77-15.

As in these previous opinions, the members of the City Council here play a role in declaring property surplus and in the sale of the property. Although we recognize the safeguards which the City follows in disposing of surplus property, the safeguards here would appear no greater than those inherent in a sale by public auction or by a competitive bidding process.

Accordingly, for the reasons expressed in opinions referenced above, we find that a prohibited conflict of interest would be created were the subject City Council member to purchase surplus City property from the City.

QUESTION 2:

Would a prohibited conflict of interest be created were a City Council member to purchase improved real property from a developer for use as his residence, where the property had been purchased from the City as surplus property and then improved by the developer?

This question is answered in the negative, subject to the conditions noted below.

In your letter of inquiry you advise that as an alternative to the possible purchase of surplus property from the City, the subject Council member is considering the future purchase of this property from a corporation which would purchase it directly from the City. This corporation previously has purchased surplus City property adjacent to the lots in question and currently is developing that property. The Council member originally had approached the corporation to purchase a home in that development, but was informed that all of the property already had been sold. It was then that he sought to purchase the adjacent City-owned property.

You advise that the corporation would develop the subject lots in conjunction with the adjacent lots previously purchased and would convey the subject lot, once improved, to the Council member. The Council member has no interest in the corporation and is not employed by the corporation. The corporation understands that the future sale of the property, once improved, to the Council member is contingent upon our approval of that transaction. However, the corporation intends to be bound by the contract to purchase the lots from the City regardless of the outcome of our opinion, and simply would seek another buyer in the event that it could not sell to the Council member.

We are of the opinion that the Code of Ethics for Public Officers and Employees would not prohibit the subject City Council member from purchasing improved property in the City from a developer for use as his residence, provided that the decision to declare the property surplus was not made at his request or specifically for the purpose of making the property available for sale to him by another. We previously have determined that a misuse of public position prohibited by Section 112.313(4), Florida Statutes (Supp. 1974), presently renumbered as Section 112.313(6), Florida Statutes, occurred where a county commissioner took action to declare county land surplus in order to acquire the property from a third party. In re Homer B. Sikes, Complaint No. 75-12 (January 19, 1976). See also CEO 81-51 and CEO 76-75, regarding municipal building officials purchasing or constructing residences within their municipalities. In the present instance the corporation would not merely be acting as a "straw man" for the Council member, as the corporation would improve the property in conjunction with the adjacent lots in its development before conveying it.

Accordingly, subject to the conditions noted above, we find that no prohibited conflict of interest would be created were the subject Council member to purchase the subject property from the developer.