Case Title: City of West Palm Beach v. Williams

Citation: 291 So. 2d 572

Docket Number: 

State: florida

Court: Florida Supreme Court

Date: 1974-02-13T00:00:00Z

Document:
291 So. 2d 572 (1974)
CITY OF WEST PALM BEACH, a Florida Municipal Corporation and West Palm Beach Marina, Inc., a Florida Corporation, Appellants,
v.
George WILLIAMS and John Turrentine, Appellees.
No. 42969.

Supreme Court of Florida.
February 13, 1974.
Rehearing Denied April 9, 1974.
*573 William E. Ashcraft of Spear, Deuschle & Capp, Fort Lauderdale, for appellant West Palm Beach Marina, Inc.
Herbert P. Benn of Blank, Williams & Benn, West Palm Beach, for appellee, George Williams.
Robert L. Taylor, Asst. City Atty., amicus curiae.
ADKINS, Justice.
This is a direct appeal from the decision of the District Court of Appeal, Fourth District, in Williams v. Turrentine, 266 So. 2d 81.
A declaratory action was filed in circuit court by John W. Turrentine to determine *574 the validity of a lease between the City of West Palm Beach and a private corporation, West Palm Beach Marina, Inc. George S. Williams, as a resident and taxpayer, was allowed to appear as intervenor.
Plaintiff sought a declaratory judgment holding that a lease of certain city-owned property to a private corporation for profit would be invalid. The plaintiff Turrentine and defendant City of West Palm Beach filed motions for summary judgment. The trial court entered an order on February 1, 1971, containing the following:
Intervenor Williams contended that the lease was against public interest and invalid for that reason. The Court granted his request to submit affidavits and a brief. Thereupon, the following final judgment was entered:
Intervenor Williams, upon appeal, contended that the lease executed by the City violated Fla. Const., art. VII, § 10, F.S.A., which provides in part:
The District Court of Appeal construed this constitutional provision as restricting activities and functions of municipalities to that of government and to forbid municipalities *576 from engaging directly or indirectly in commercial enterprises for profit.
The District Court of Appeal initially and directly construed a provision of the State Constitution and we have jurisdiction. Fla. Const., art. V, § 3(b)(1), F.S.A.
The District Court of Appeal relied primarily upon decisions involving the pledging of municipal, district, or state credit through the issuance of bonds and decisions which held a municipality could not pledge its credit in aid of a private corporation absent a showing that the primary purpose was a public purpose. However, the question involved here is whether municipalities can lease public lands for private uses when the lease is not coupled with the issuance of bonds or with the acquisition of land by purchase or eminent domain.
It is well settled that municipalities may constitutionally acquire land by purchase or by power of eminent domain and then lease that land for public use, Gate City Garage v. City of Jacksonville, 66 So. 2d 653 (Fla. 1953), or may use the proceeds of municipal bonds to build improvements to be leased for public use, State v. City of Miami, 72 So. 2d 655 (Fla. 1954).
Also, a municipality may not constitutionally acquire land by purchase or by power of eminent domain and then lease that land for a private use. Adams v. Housing Authority of City of Daytona Beach, 60 So. 2d 663 (Fla. 1952), nor may municipalities use the proceeds of municipal bonds to build improvements to be leased for a private use, State v. Town of North Miami, 59 So. 2d 779 (Fla. 1952).
Because the constitution requires that bonds be issued, public funds be spent and the power of eminent domain be exercised for public uses only, any lease agreement which requires that one of the above powers be exercised for a private use would necessarily be void. However, when none of the above powers need be exercised in order to proceed to the complete execution of the lease agreement, municipalities, when holding the legislative authority to do so, can lease public land for private uses. Bannon v. Port of Palm Beach District, 246 So. 2d 737 (Fla. 1971). Fla. Stat. § 167.77(1), F.S.A., which gives general legislative authority to all municipalities, reads as follows:
Fla. Stat. § 167.77, F.S.A., emanated from a decision of this Court in City of Clearwater v. Caldwell, 75 So. 2d 765 (Fla. 1954), where Clearwater was attempting to lease a parcel of public land to a private individual for fifty years to be developed into a hotel-apartment complex. Upon suit instituted by taxpayers, the Circuit Court held that the City did not have the power to lease the property and enjoined the City from executing the lease agreement. The sole issue decided by this Court was whether the City of Clearwater had the power to *577 lease public land to be used for a private use. In affirming the lower court, this Court said:
The original version of Fla. Stat. § 167.77, F.S.A., was enacted as Ch. 57-9, Laws of Florida, wherein the Legislature made the following finding:
Fla. Stat. § 167.77, F.S.A., is sufficient authority to allow municipalities to lease public lands for private uses, provided the lease does not violate the Constitution by being coupled with the issuance of bonds or the acquisition of lands by purchase or eminent domain.
In addition to the general authority, the City Charter of West Palm Beach (Fla. Laws, Ch. 65-2381) expressly grants to the City the power to dispose of property by lease. Section 1.04 of the Charter contains the following:
The method of disposing of property is prescribed in Section 1.03(4) of the charter, which contains the following:
It therefore appears that the City of West Palm Beach had both general statutory authority and specific authority in its Charter to lease the subject property.
It is interesting to note that in Bannon v. Port of Palm Beach District, 246 So. 2d 737 (Fla. 1971), this Court considered the question of whether or not a Port District had the power to lease its artificial island to a private corporation for private development at no public expense. This Court held that under the provisions of Fla. Stat. §§ 315.03(9) and 315.03(14), F.S.A., the *578 District had such authority and that these statutes did not violate the constitutional prohibition against lending of credit of the State for a private purpose where no bonded indebtedness or monetary obligation of any kind attached to the Port District as a result of the lease. This statutory grant of power was similar to that given to municipalities by Fla. Stat. § 167.77, F.S.A. This Court in its opinion said:
As noted above (Ch. 57-9, Laws of Florida), the Legislature has determined that the lease of public lands for private uses is a valid public purpose and such a finding should not be disturbed absent a showing that it is arbitrary and unfounded. State v. Daytona Beach Racing & Rec. Fac. Dist., 89 So. 2d 34 (Fla. 1956). In fact, it would be beneficial in many instances to lease surplus public property for non-public purposes so that the citizens and taxpayers would realize some tax relief resulting from the income. As stated by the trial judge, it is not the function of the Court to pass upon the wisdom of the City officials, or to substitute its opinion for theirs, but only to determine if their action was unlawful.
In summary, we hold that where bonds are not issued, public funds are not spent, and the power of eminent domain is not exercised in furtherance thereof, a municipality can lease public land for private uses in accordance with legislative authority.
The decision of the District Court of Appeal is reversed and the cause is remanded with instructions to affirm the judgment of the trial court.
It is so ordered.
CARLTON, C.J., and ROBERTS, BOYD, McCAIN and DEKLE, JJ., concur.
ERVIN, J., concurs in part and dissents in part with opinion.
ERVIN, Justice (concurring in part and dissenting in part):
I do not believe we should affirm the judgment of the trial court without more. It seems to me that the municipal lease herein, or similar ones, should be subject to a timely taxpayer challenge that under the particular factual circumstances the execution of the lease does not serve a predominantly public purpose. Determination of such a challenge should not be restricted solely to an inquiry whether the "lease does not violate the Constitution by being coupled with the issuance of bonds or the acquisition of lands by purchase or eminent domain" nor to whether execution of the lease is "arbitrary and unfounded".
I think that a constitutional inquiry can also be made to ascertain whether the State or one of its agencies, subdivisions or local units has, contrary to Florida Constitution, Article VII, § 10, "become a joint owner with, or stockholder of, or give, lend or use its taxing power or credit to aid any corporation, association, partnership or person" in determining the validity of a municipal lease.
*579 The same presumption of regularity that is accorded a municipality in the issuance of bonds and in the acquisition of lands and in the statutory granting of tax exemption should be accorded a municipality in the determination of the validity of its lease, subject to refutation by the challenger.
From reading the orders and final judgment of the trial judge, I note that he did not make any finding upon the challenge that the proposed lease did not pass muster under Florida Constitution, Article VII, § 10.
I think he should have made such a factual finding just as did the trial judge in the airport leases case of Hillsborough County Aviation Authority v. Walden (Fla.) 210 So. 2d 193. In other words, he should have found whether the public or private interest would predominate in the execution of the lease just as the trial judge did in the Walden case in determining whether tax exemption of the airport leases was allowable. Both, i.e., execution of a municipal lease or a grant of tax exemption, are transactions that may illegally aid private interests.
It is true the statutes authorize execution of municipal leases in certain instances and they also authorize exemption from municipal taxes in certain instances, but in each instance Florida Constitution, Article VII, § 10, supervenes and predominates and the factual considerations in each transaction must be weighed, first administratively, and then judicially, if the administrative decision is challenged.
It is noted from the District Court opinion the trial judge as a matter of law ruled for the City. He made no evidentiary finding that the lease primarily served a public purpose based upon the particular facts. Merely because a city is empowered by law or ordinance to execute a lease of municipal land is not the final answer. Under the Constitution it is an open factual question whether the execution of a particular lease serves a public purpose. A public purpose, of course, could be that particular land is surplus and will not be needed during the foreseeable future (within the term of the proposed lease) for a municipal purpose and that it would be improvident not to derive private rents from it in the interim. Nothing of this sort appears in the record or was found by the trial judge in this case. An evidentiary hearing appears appropriate. This I believe is the proper construction of Florida Constitution, Article VII, Section 10, and not the construction set forth in the majority opinion.
I would reverse the District Court decision insofar as it holds against the City lease as a matter of law for the reasons stated in its opinion and remand for a factual determination as above explicated.