CEO 87-22 -- April 23, 1987

CONFLICT OF INTEREST

COUNTY DEVELOPMENT AUTHORITY MEMBER INVESTING IN

CONSTRUCTION OF PLANT IN INDUSTRIAL PARK OWNED BY AUTHORITY

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

SUMMARY:

A county development authority member is not prohibited by Section 112.313(7), Florida Statutes, from investing in the construction of a plant in an industrial park owned by the authority after the property on which the plant will be located has been purchased from the authority. However, the member would be prohibited by Section 112.3143(3), Florida Statutes, from voting as a member of the authority on matters relating to the development of the property.

QUESTION:

Would a prohibited conflict of interest be created were a county development authority member to invest in the construction of a plant in an industrial park which has been developed by the authority after the property on which the plant would be located has been purchased from the authority?

Your question is answered in the negative, subject to the possible exception noted below.

In your letter of inquiry and in a telephone conversation with our staff, you have advised that .... serves as a member of the Clay County Development Authority, which was created by Chapter 57-1226, Laws of Florida, and which is charged with the industrial and economic development of the County. The Authority has purchased and developed a 49-acre industrial park in the County.

You further advise that a business located in the County has submitted a contract to the Authority to purchase a 10-acre parcel in the park. It is anticipated that the subject Authority member will be a partner in a group formed to construct a building on the property which then would be leased to the company. You question whether the Authority member would be prohibited from being an investor in the construction of the facility on the property after the property has been purchased from the Authority.

The Code of Ethics for Public Officers and Employees provides in relevant part:

CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP. -- No public officer or employee of an agency shall have or hold any employment or contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business with, an agency of which he is an officer or employee . . . ; nor shall an officer or employee of an agency have or hold any employment or contractual relationship that will create a continuing or frequently recurring conflict between his private interests and the performance of his public duties or that would impede the full and faithful discharge of his public duties. [Section 112.313(7)(a), Florida Statutes (1985).]

The first part of the provision prohibits a public official from having any contractual relationship with a business entity which either is doing business with, or is subject to the regulation of, his agency. After the purchase of the property from the Authority is completed and the Authority has been paid for the property, the business entity which has purchased the property no longer would be "doing business with" the Authority.

The question remains, however, as to whether the group which will be constructing the improvements on the property will be "subject to the regulation of" the Authority after the purchase of the property has been accomplished. We are of the opinion that it would not be regulated by the Authority, within the meaning and intent of the prohibition of Section 112.313(7), Florida Statutes.

You have advised that the Authority has imposed upon property located in the industrial park a set of covenants and restrictions which would be enforceable through the courts. The covenants and restrictions govern the uses of property within the park, require that certain conditions be met for the development of property in the park, contain standards regarding signs, hazards, and wastes, and require that plans and specifications for development be submitted to the Authority for its approval prior to construction. The Authority has reserved some discretion to amend the covenants and restrictions and to allow variances from the requirements of the covenants and restrictions.

It is clear that the Authority was not created in order to regulate businesses which may locate within the County. Rather, the Authority was created to encourage businesses to locate in the County and to bring jobs to the community. The purpose of the covenants and restrictions primarily is to make the park more attractive to businesses which may locate in the County, rather than to prescribe the manner in which businesses located in the park operate. Therefore, we find that those businesses located in the park are not "subject to the regulation of" the Authority.

It is clear, however, that the Authority member would be prohibited from voting on measures relating to the property by Section 112.3143(3), Florida Statutes, which prohibits a local official from voting on any measure that inures to his special private gain. From our review of the covenants and restrictions, it does not appear likely that the Authority member would be faced with a voting conflict of interest regarding the property on any continuing or frequently recurring basis. However, we would add that should matters relating to the property come before the Authority often enough to be considered continuing or frequently recurring, the Authority member would have to consider stepping down from the Authority or withdrawing his investment in the property in order to avoid a continuing or frequently recurring conflict of interest that would be prohibited by the second part of Section 112.313(7)(a), Florida Statutes.

Accordingly, we find that no prohibited conflict of interest would be created were the subject Development Authority member to invest in the construction of improvements on property in the industrial park after the purchase of the property from the Authority.