Opinion ID: 1867197
Heading Depth: 1
Heading Rank: 1

Heading: Constitutionality of the Lease

Text: Section 94 of the Alabama Constitution, as amended by Amendment No. 112, reads: Counties, municipalities and other political subdivisions not to grant public money or lend credit to individuals or corporations; alienation of public parks, playgrounds, recreational facilities and housing projects by political subdivisions and public bodies. The legislature shall not have power to authorize any county, city, town, or other subdivision of this state to lend its credit, or to grant public money or thing of value in aid of, or to any individual, association, or corporation whatsoever, or to become a stockholder in any such corporation, association, or company, by issuing bonds or otherwise. It is provided, however, that the legislature may enact general, special, or local laws authorizing political subdivisions and public bodies to alienate, with or without a valuable consideration, public parks and playgrounds, or other public recreational facilities and public housing projects, conditional upon the approval of a majority of the duly qualified electors of the county, city, town, or other subdivision affected thereby, voting at an election held for such purpose. The trial court held that this provision and other legal requirements require that a municipality receive fair market rent when it leases real property. It cited two Informal Attorney General Opinions, # 88-00123 (January 15, 1988) and # 88-00323 (June 10, 1988), as support for its interpretation of § 94, as amended by Amendment No. 112. We disagree with that interpretation. In addition, this Court has upheld both leases and conveyances of property by municipalities without requiring the municipality to prove that it has received fair market value for the property. O'Grady v. City of Hoover, 519 So.2d 1292 (Ala.1987); Williams v. Water Works & Sanitary Sewer Board of Montgomery, 261 Ala. 460, 74 So.2d 814 (1954). This Court has expressed its reluctance to examine the adequacy of consideration in similar contracts, including sales of land: When a contract of a public body is an ordinary commercial contract, with benefits flowing to both parties and a consideration on both sides, it is not a lending of credit by the public body. Otherwise, Sections 93 and 94, Constitution 1901, as amended, would prohibit any public body from entering into any contract whereunder the other party gained any benefits whatever Rogers v. City of Mobile, 277 Ala. 261, 278, 169 So.2d 282, 298 (1964). We are equally hesitant to examine the adequacy of the consideration received by the City in this case, leaving that determination to the judgment of the City's duly elected officials. After reviewing the record, this Court has found no evidence of a constitutional violation. Therefore, the judgment of the trial court is in error on this point.