Opinion ID: 176682
Heading Depth: 4
Heading Rank: 1

Heading: Favorable Lease Terms

Text: As we recognized in Community House I, CHI's lease with the City was more favorable than the BRM's. 490 F.3d at 1057. The BRM was obligated to pay rent of $1 per year for the first five years, after which rent would escalate to a commercial rate, and the maximum term of the lease was only ten years. The CHI lease, on the other hand, required rent of only $1 per year for its fifty-year lease term. The City had similar repair and insurance responsibilities under both leases. CHI correctly points out that, although the BRM lease was (at worst) neutral when compared to the CHI lease, this fact is not, by itself, sufficient to defeat an Establishment Clause claim. Cmty. House I, 490 F.3d at 1057-58 (citing Mitchell v. Helms, 530 U.S. 793, 838-39, 120 S.Ct. 2530, 147 L.Ed.2d 660 (2000) (O'Connor, J., concurring)). But neutrality is a very important factor in the indoctrination inquiry and tends to show that a private entity's indoctrination cannot be attributed to the government. See Mitchell, 530 U.S. at 810, 120 S.Ct. 2530 (plurality) ([I]f the government, seeking to further some legitimate secular purpose, offers aid on the same terms, without regard to religion, to all who adequately further that purpose ... then it is fair to say that any aid going to a religious recipient only has the effect of furthering that secular purpose.). Here, not only was the City neutral toward the BRM in its lease terms when compared to CHI's lease, the BRM actually got the worse deal. Where the BRM would have been required to pay market rent after five years, CHI was guaranteed that throughout the entire fifty-year term of its leaseits rent would never exceed $1 per year. [4] If charging below-market rent to a non-profit religious organization on the same or worse terms than those received by a previous secular non-profit tenant would constitute government indoctrination, that was not clearly established in 2005. In Christian Science Reading Room Jointly Maintained v. City and County of San Francisco, 784 F.2d 1010, 1015 (9th Cir. 1986), as amended, 792 F.2d 124 (9th Cir. 1986), we held that leasing public property to a religious organization does not violate the Establishment Clause, as least where the lease was on the same terms as leases offered to commercial tenants. That case did not address whether it would violate the Establishment Clause if such a lease were offered on the same terms as those received by other non-profit tenants. When pressed during oral argument for their best case on this issue, plaintiffs' counsel cited this case. It does not help them. At least one court has decided such a case. In Fairfax Covenant Church v. Fairfax County Sch. Bd., 17 F.3d 703 (4th Cir.), cert. denied, 511 U.S. 1143, 114 S.Ct. 2166, 128 L.Ed.2d 888 (1994), the Fourth Circuit considered a school board policy of leasing public facilities for an amount of rent determined by the type of entity. Student organizations and groups primarily benefitting the public did not have to pay rent. Id. at 704. Cultural, civic, and educational groups paid rent at a noncommercial rate. Id. For five years churches paid the noncommercial rate, which then escalated to the commercial rate. Id. at 705. The court held that charging churches the same below-market rent as the other non-profit groups would not violate the Establishment Clause, but that charging them commercial rentwhich it termed rent discriminationviolated the Free Exercise and Free Speech Clauses. Id. at 706-07. Faced with a dearth of binding case law on the subject of non-profit leases to religious organizationsand a Fourth Circuit case holding that rent discrimination based on religion was unconstitutionala reasonable official would not have known that the BRM lease violated the Establishment Clause. When the City undertook its RFI/RFP process, the BRM was the only entity that proposed to purchase Community House. Given that no other non-profit organizations were willing or able to keep the doors of the shelter open, the decision to lease the building to the BRM was reasonable.