Case Name: STATE of Florida et al., Appellants, v. CLAY COUNTY DEVELOPMENT AUTHORITY, a body corporate and political subdivision of the State of Florida, Appellee
Court: Florida Supreme Court
Jurisdiction: Florida
Decision Date: 1962-03-07
Citations: 140 So. 2d 576
Docket Number: No. 31354
Parties: STATE of Florida et al., Appellants, v. CLAY COUNTY DEVELOPMENT AUTHORITY, a body corporate and political subdivision of the State of Florida, Appellee.
Judges: ROBERTS, C. J., and THOMAS and O’CONNELL, JJ., concur.
Reporter: Southern Reporter, Second Series
Volume: 140
Pages: 576–586

Head Matter:
STATE of Florida et al., Appellants, v. CLAY COUNTY DEVELOPMENT AUTHORITY, a body corporate and political subdivision of the State of Florida, Appellee.
No. 31354.
Supreme Court of Florida.
March 7, 1962.
Rehearing Denied March 22, 1962.
William A. Hallowes, III, Jacksonville, for appellants.
Scruby & Yonge, Orange Park, and Patterson, Freeman, Richardson & Watson, Jacksonville, for appellee.

Opinion:
DREW, Justice.
This appeal by the State of Florida (hereafter referred to as the State) questions a final decree validating $500,000 of revenue anticipation certificates proposed to be issued by the Clay County Development Authority (hereafter referred to as the Authority) .
In 1958, the Authority acquired a surplus airfield consisting of approximately 1300 acres of land located in Clay County and known as Fleming's Island Satellite Field. Thereafter the Authority acquired certain rights to public recreational facilities on Kingsley Lake in Clay County and has leased certain facilities therein to Doctor's Inlet Civic League, a non-profit corporation which uses such facilities for community projects and recreational purposes. The Authority has granted the use of certain portions of its Kingsley Lake property to the Gateway Council of Girl Scouts. While the legislative act contemplated the development of these lands primarily for public purposes, the only use made of the Fleming's Island Satellite Field property since its acquisition by the Authority is for occasional drag strip racing operated by a private corporation under a contractual arrangement with the Authority. The use of the airport has been limited since its acquisition by the Authority because of certain restrictions placed thereon by the United States Navy, which has extensive facilities in this general area; but it is anticipated that in the near future the Authority will be able to make a more extensive use thereof.
In July, 1961, the Authority entered into a lease agreement with Eclipse Plastic Industries, Inc., a private corporation, whereby the Authority agreed to construct, erect, install and equip an industrial plant on a described portion of Fleming's Island Satellite Field and thereafter to lease such tract, as improved, to the private corporation for a term of sixteen years, with an option to the company to renew said lease at the expiration of said period for an additional term of ten years. In such agreement it was provided that the Authority would finance the cost of building and equipping said plant through the issuance and sale by the Authority of revenue certificates payable solely from the sums to be paid by the company to the Authority over the initial sixteen year term of the lease. It was further provided that the total cost of building and constructing said plant and equipping the same would not exceed the sum of $500,000, and that any sums in excess thereof should be supplied by the lessee. The agreement contained in detail the provisions to be incorporated into the definitive lease including the provisions that the company would have the exclusive use and exclusive control of said premises and property during the entire term of the indenture and any renewals thereof and that the premises would be used in the operation of the business of manufacturing plastic containers and other plastic products, subject only to the restrictions and limitations of the definitive lease. The lease, as above mentioned, was to include a provision that the company should have the option at the termination thereof to renew the same for an additional term of ten years and that, during such additional term, the terms and provisions of the original lease would be applicable except that thereafter that rents should be at an annual rate of $15,000 per year, payable $1250 monthly.
Following the execution of the agreement to lease above mentioned, the Authority adopted a resolution approving the execution of such agreement and authorizing the construction and erection of the building and equipment mentioned therein and above specified and the issuance of $500,000 in revenue anticipation certificates to finance the cost thereof. Petition was thereafter filed to validate such certificates, a final decree was entered by the Circuit Judge adjudging the same to be valid, approving the project above described and finding that the purpose for which such certificates were to be issued was a public purpose.
The Act creating the Authority defines "project" as:
"(2) 'Project' shall be deemed to mean and include the acquisition of lands, properties and improvements for development, expansion and promotion of industry, commerce, agriculture, natural resources and vocational training and the construction of buildings and plants for the purpose of selling, leasing or renting such structures to private persons, firms or corporations."
Among others, the following powers and duties are specifically conferred upon the Authority:
" (4) To acquire in its own name by purchase, on such terms and conditions, and in such manner as it may deem proper, real property or liens or easements therein or franchises necessary or convenient for its corporate purposes, and to use the same, and to lease or make contracts with respect to the use or disposition of same in any manner the authority deems to its best advantage. *
"(6) To make contracts, and to execute all instruments necessary or convenient, including contracts for construction, lease, rental and sale of projects or contracts with respect to the use of projects which it erects or acquires.
"(7) To construct, erect, acquire, own, repair, remodel, maintain, extend, improve, equip, operate and manage projects, self-liquidating or otherwise, located on property owned or leased by the authority, and to pay the cost of any such project from the proceeds of revenue-anticipation certificates of the authority or from any grant from the county of Clay or any of the incorporated cities therein, or from any grant from the state, or from any contribution- or loan by persons, firms, or corporations, all of which the authority is hereby authorized to receive and accept and use.
*
"(10) To do all things necessary or convenient to carry out the powers expressly conferred by this act.

"(12) To issue revenue-anticipation certificates for the purpose of paying all or any part of the cost of any project of the authority. Such revenue-anticipation certificates shall be issued and validated under and in accordance with the applicable provisions of the laws of Florida."
The original Act was before this Court in quo warranto proceedings brought in the name of the Attorney General of the State of Florida questioning the powers of the Authority. This Court in this quo war-ranto proceeding upheld the powers vested in the Authority and determined that the same were not necessarily violative of the Constitution. In this connection, however, it is necessary to observe, as was done in the later case involving the Suwannee County Development Authority, that we were not dealing with the direct question of the power to issue revenue bonds nor a specific exercise of a specific power under the Act. The Court expressed the view that the Clay County Development Authority "was created to and will serve a valid public purpose in providing for the over-all development of Clay County. The setting aside for industrial and commercial purposes of a portion of the property already purchased is certainly a part of the balanced over-all plan for the County's development; but there is nothing in the record here to show that this was the primary purpose for the acquisition of the federal government's surplus tract of land, rather than an incidental part thereof. In these circumstances we can find nothing in the previous decisions of this court construing § 10 of Article IX requiring us to hold that the Authority's acquisition of the property and proposed program for its development amounts to an appropriation of the Authority's funds for, or the lending of its credit to, a private enterprise.'' 104 So.2d p. 349 (Emphasis added) As a basis for the above observation of this Court, the Court leaned heavily upon Gate City Garage, Inc. v. City of Jacksonville and Panama City v. State. In connection with our approval of the sale or lease of portions of the authorities' properties for industrial or commercial purposes to private persons, firms or corporations, we must examine those cases in order to determine whether what is proposed to be done in the specific instance involved in this appeal was what this Court had in mind in the Cotney case.
In Gate City Garage, the Court was concerned with the question of the power of the City of Jacksonville to lease a filling station to a private person on a portion of the land being developed for public purposes by the issuance of certain municipal obligations. The holding of this Court there was that, inasmuch as this reservation of power in the plan for the development of this municipal project was a pure incident to the main or primary purpose of developing large parking areas (a concededly public purpose), the lease of the filling station to private individuals did not destroy the main or primary public purpose. Later, in the Panama City case, in dealing with an identical question, this Court, after finding that the estimated rentals from spaces to be leased in the marina there under consideration would amount to slightly more than 20% of the total anticipated revenues of the overall public project and that the concessions buildings would occupy 1.22% of the total area involved in the proj ect, concluded "that the construction of the concessions buildings as contemplated in the overall plan does not destroy the public nature of the project nor prevent the issuance of bonds therefor." 93 So.2d p. 614
Reverting now to the Cotney case, while this Court approved in that case the power of the Authority to sell or lease certain parts of the Authority's property for industrial or commercial purposes to private persons, firms or corporations, that holding was necessarily limited to such projects as were embraced within our holdings in the Gate City and Panama City cases. This conclusion is inescapable from the following sum-marization of our holding:
" When construed as authorizing the sale or lease for industrial and commercial purposes of a portion, only, of a tract of land acquired as a single project encompassing recognized public purposes as the primary object of the acquisition; or as authorizing the construction of improvements on such property for utilization by private enterprises as an incident to and in furtherance of a primary and recognized public purpose, cf. Gate City Garage, Inc., v. City of Jacksonville, supra, 66 So.2d 653; Panama City v. State, supra, 93 So.2d 608, we find no constitutional infirmities in the Act." 104 So.2d p. 349.
In State v. Suwannee County Development Authority, supra, this Court declined to approve the validation of revenue certificates issued to purchase a single tract of land on which an industrial plant was to be constructed and leased to a private concern. In commenting upon the Cotney case in that opinion, Mr. Justice O'Connell, speaking for this Court, clearly pointed out the importance of noting that there was no proposed issue of revenue certificates involved in the Cotney case. Among other things this Court observed:
"In the Cotney case it is important to note that there was no proposed issue of revenue certificates before this Court. In that case the Clay County Development Authority, which was created by a special act of the Legislature almost identical to that which created the Authority here involved, had already acquired a large tract of surplus land from the federal govern ment It proposed to develop that land as one project to include an airport and golf course with the remainder to be leased or sold to private enterprise for commercial use. This Court held that there was nothing in the record to show that the leasing or selling to private enterprise for private use of a portion of the lands was the primary purpose for the acquisition of the lands. Rather the court held the private use was only an incident thereto.
íjí íjí 5fi
"Thus it is obvious that although the Court approved the validity of an act granting such an Authority the power to purchase, construct, and lease to private enterprise it severely restricted such authorization to those instances where the private use was only incidental to a public purpose and public use of the remaining greater portion of the lands involved."
Turning now to the question immediately at hand, it is crystal clear that the primary purpose to- be served by the issuance of these obligations is the financing of a private enterprise contrary to the express provisions of Section 10 of Article IX of the Constitution of this State, F.S.A. The public obligation is to be incurred for the sole purpose of building and equipping this industrial plant. The fact that such building and structures will occupy only a small portion of the 1300 acres of land of the Authority is of no consequence in determining whether the purpose of improvement is incidental and falls within the ambit of our holdings in the Gate City Garage and Panama City cases. The dominant and paramount purpose is to- lend the credit of the county to a private corporation to finance a private enterprise for private profit which will be under the exclusive control and in the exclusive possession of such enterprise for more than twenty-five years. The only possible public purpose which it serves is to promote the general development of the area by furnishing employment to the residents of Clay County. This is the factor which prompted the project. If we approve the issuance of bonds by the public authorities of this State to build and finance private enterprises and put such enterprises in the exclusive possession and control of such leases as is proposed to be done here, in order to alleviate unemployment and to promote the economic development of the area, then there is no limit to the extent to which the credit of the State and its. authorities may be extended to private interests. In such event the constitutional provision above quoted will become meaningless.
In two cases involving legal principles identical with those involved here, this Court has clearly rejected the idea that private enterprise may be financed in the manner proposed here. In State v. Town of North Miami, certificates of indebtedness were issued by the Town of North Miami to purchase certain lands in the city limits and to construct thereon an aluminum manufacturing plant. The property was then to be leased for twenty years to a private corporation under an agreement whereby such private corporation would carry on a manufacturing enterprise for private property upon the premises with the certificates to be retired by income from the net rentals to be received from the construction. The plan is almost identical to that involved here. We quote and reaffirm the observations of Mr. Justice Mathews writing for the Court in that case as follows :
" In none of the cases decided by this Court since the adoption of our present Constitution have we approved any special legislative acts which authorized any of the political subdivisions or governmental units of the State to acquire property and erect buildings thereon for the exclusive use of a private corporation for private gain and profit.
He jfe
"Our government was founded upon the firm foundation that private property cannot be taken except when it will serve a public purpose. Section 1 of the Declaration of Rights of the State Constitution provides, that, 'all men have certain inalienable rights, among which are those of acquiring possessing and protecting property If private property may be purchased by the municipality for the use and benefit of a private corporation, then it may be acquired by the great power of eminent domain for such a purpose. A first essential for the acquirement of private property by this great power is, that it shall be for a public purpose. See Peavy-Wilson Lumber Co. v. Brevard County, 159 Fla. 311, 31 So.2d 483, 172 A.L.R. 168.
"Our organic law prohibits the expenditure of public money for a private purpose. It does not matter whether the money is derived by ad valorem taxes, by gift, or otherwise. It is pub-lie money and under our organic law public money cannot be appropriated for a private purpose or used for the purpose of acquiring property for the benefit of a private concern. It does not matter that such undertakings may be called or how worthwhile they may appear to be at the passing moment. The financing of private enterprises by means of public funds is entirely foreign to a proper concept of our constitutional system. Experience has shown that such encroachments will lead inevitably to the ultimate destruction of the private enterprise system." 59 So.2d pp. 784, 785.
In City of Clearwater v. Caldwell, a similar project was undertaken by the City of Clearwater and this Court held that the City had no power to lease lands to construct hotel and apartment houses for private gain and declared the same to be violative of Section 10, Article IX of the Constitution. In City of West Palm Beach v. State, this principle was reaffirmed in a factual situation much stronger in support of validation than this case presents.
We have carefully considered the argument of the Authority that the validation of these bonds is warranted by the rationale of this Court in a number of our previous decisions. We have carefully examined each of these cases and find 'no similarity between the questions there presented and the one now under consideration. Each of those cases involved the issuance of governmental obligations for what had been long determined by this Court in previous cases to be public purposes. State v. Daytona Beach, for example, involved the issuance of certificates to construct racing and recreational facilities. In that case we again referred to the fact that, while the facilities were proposed to be leased to private corporations for a portion of the year, such leases were incidental to the public purpose of providing recreational facilities. In State v. Board of Control it was said that the primary purpose of the issuance of the obligation was the promotion of the educational facilities of this State; and the Court again observed "if the real and dominant purpose of the project was the promotion of a private enterprise for private gain, the contention of the appellants would be sound." These are but two of the cited cases but each of the others clearly sets forth a dominant public purpose and we approved the validation on the theory that whatever private purpose was served was purely incidental to the main public purpose. We find in none of these cases comfort to the Authority. On the contrary, each of these cases supports the conclusion which we reach that the certificates proposed to be issued for the construction of the proposed project are condemned by Article IX, Section 10, of the Constitution and that the decree of the trial court must be and the same is hereby,
Reversed.
ROBERTS, C. J., and THOMAS and O'CONNELL, JJ., concur.
CALDWELL, J., concurs specially.
TERRELL and THORNAL, JJ., dissent.
. The Authority was created by Chapter 57-1226, Laws of Florida, Special Acts of 1957.
. The total annual income to the Authority from the lease was the identical amount required to pay principal and interest on the bonds for that year. At the expiration of the sixteen year term, the total anticipated income from such rentals would then have fully paid off the original issue of certificates.
. State ex rel. Ervin v. Cotney, Fla.1958, 104 So.2d 346.
. State v. Suwannee County Development Authority, Fla.1960, 122 So.2d 190.
. Gate City Garage, Inc. v. City of Jacksonville, Fla.1953, 66 So.2d 653.
. Panama City v. State, Fla.1957, 93 So. 2d 608.
. Note 4, supra.
. "§ 10. Credit of state not to be pledged or loaned. — Tlie credit of the State shall not be pledged or loaned to any individual, company, corporation or association; nor shall the State become a joint owner or stock-holder in any company, association or corporation. The Legislature shall not authorize any county, city, borough, township or incorporated district to become a stockholder in any company, association or corporation, or to obtain or appropriate money for, or to loan its credit to, any corporation, association, institution or individual."
. Fla.1952, 59 So.2d 779.
. Fla.1954, 75 So.2d 765.
. Fla.1959, 113 So.2d 374.
. Among others, the following eases are relied on by the Authority: Bailey v. City of Tampa, 92 Fla. 1030, 111 So. 119; Brautigam v. White, Fla.1953, 64 So. 2d 781; City of Jacksonville v. Savannah Machine & Foundry Co., Fla.1950, 47 So.2d 634; Kathleen Citrus Land Co. v. City of Lakeland, 124 Fla. 659, 169 So. 356; Leon County v. State, 122 Fla. 505, 165 So. 666; Seaboard Air Line R. Co. v. Peters, Fla.1949, 43 So.2d 448; State v. Board of Control, Fla.1953, 66 So.2d 209; State v. City of Miami, Fla.1954, 76 So.2d 294; State v. Dade County, Fla.1953, 62 So.2d 404; State v. Daytona Beach Racing and Recreational Facilities District, Fla.1956, 89 So.2d 34; State v. Inter-American Center Authority, Fla.1955, 84 So.2d 9; Sunshine Const. of Key West, Inc., v. Board of Commissioners, Fla.1951, 54 So.2d 524.