CEO 87-54 -- July 30, 1987

CONFLICT OF INTEREST

CITY DOWNTOWN IMPROVEMENT BOARD MEMBER'S REAL ESTATE

FIRM AND FORMER BOARD MEMBER DOING BUSINESS WITH BOARD

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

SUMMARY:

No prohibited conflict of interest would be created were a former member of a city downtown improvement board to purchase property from the board. Neither the post office-holding or post employment restrictions of Article II, Section 8(e), Florida Constitution, and Section 112.3185, Florida Statutes, would apply to members of a city downtown improvement board. However, a prohibited conflict of interest would be created were the real estate agency with which a city downtown improvement board member is associated to serve as the broker for the sale of property by the board, unless the broker is selected through a sealed, competitive bidding process. As the Board member would have a contractual relationship with a business entity doing business with his agency, Section 112.313(7), Florida Statutes, would be violated, unless the terms of the exemption in Section 112.313(12)(b), Florida Statutes, are met.

QUESTION 1:

Would a prohibited conflict of interest be created were a former member of a city downtown improvement board to purchase property from the board?

This question is answered in the negative.

In your letter of inquiry and in a telephone conversation with our staff you have advised that .... served as a member of the Pensacola Downtown Improvement Board until his term recently expired. The Downtown Improvement Board is responsible for overseeing the revitalization and preservation of the downtown area. In conjunction with its revitalization efforts, and not necessarily with the intention of making a profit, the Board purchased a vacant building in the downtown area. The Board has attempted to sell the property nationally through requests for proposals and through local marketing efforts. The former Board member has stated that he would purchase the property at a price greater than the price paid by the Board, if the Board otherwise is not able to sell the property. You question whether he may purchase the property from the Board.

The only post office-holding or post employment restrictions in the Sunshine Amendment or in the Code of Ethics for Public Officers and Employees are provided in Article II, Section 8(e), Florida Constitution, and Section 112.3185, Florida Statutes. However, Article II, Section 8(e) only applies to members of the Legislature and statewide elected officers. Section 112.3185, Florida Statutes, applies only to employees of entities of the executive and judicial branches of State government. See Section 112.3185(1)(b), Florida Statutes.

Accordingly, we find that no prohibited conflict of interest would be created were the former member of the Downtown Improvement Board to purchase property from the Board.

QUESTION 2:

Would a prohibited conflict of interest be created were the real estate agency with which a city downtown improvement board member is associated to serve as the broker for the sale of property by the board?

This question is answered in the affirmative, subject to the exception noted below.

In your letter of inquiry you advise that Mr. Calvin Moore serves as a member of the Downtown Improvement Board and is associated with a real estate firm which is interested in listing the subject Board property for sale. He leases office space from the firm, pays overhead expenses, and operates under the broker's license of the firm. The Board member retains all of the commissions on his sales and personally would receive no commission from the sale of the Board's property.

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).]

This provision prohibits a public officer from having a contractual relationship with a business entity which is doing business with his agency.

We previously have advised that this provision would prohibit a public employee from being an associate of a real estate firm which is doing business with his agency. See CEO 81-1 and CEO 84-88. We also have advised that a real estate firm which lists the property of a public agency for sale is "doing business with" that agency. See CEO 82-50. As the term "agency" is defined in Section 112.312(2), Florida Statutes, the "agency" of the subject Board member is the Downtown Improvement Board. Therefore, the subject Board member would be prohibited from being associated with a real estate firm serving as the broker for the sale of property owned by the Board.

Several exemptions to the prohibition of Section 112.313(7), Florida Statutes, have been created in Section 112.313(12), Florida Statutes. It does not appear that any of these exemptions would be applicable here, with the possible exception of Section 112.313(12)(b), Florida Statutes, which could apply if the Board seeks the services of a broker through a system of sealed, competitive bidding. In that event, the Board member should comply with the requirements of that exemption.

Accordingly, we find that a prohibited conflict of interest would be created were the real estate agency with which the subject Board member is associated to serve as broker for the sale of property by the Board, unless the arrangement between the Board and the real estate firm is entered into in accordance with the competitive bid exemption of Section 112.313(12)(b), Florida Statutes.