Opinion ID: 1690825
Heading Depth: 1
Heading Rank: 4

Heading: Legal Purpose

Text: This Court must next determine whether the purpose for which the County intends to expend public funds is legal. Article VII, section 10 of the Florida Constitution prohibits counties from using their taxing power or pledging public funds to aid a private entity unless the project falls within one of the four subsections. See Art. VII, § 10, Fla. Const.; see also Northern Palm Beach County Water Control Dist., 604 So.2d at 441. Because none of the exceptions listed in the constitution apply in this case, this Court must determine whether the County has exercised its taxing power or pledged its credit. See Northern Palm Beach County Water Control Dist., 604 So.2d at 442. If the County has not exercised its taxing power or pledged its credit, the obligation must merely serve a public purpose. See id; Linscott v. Orange County Indus. Dev. Auth., 443 So.2d 97, 101 (Fla.1983) (involving revenue bonds supported solely by revenues from project). [11] On the other hand, if the County has used either its taxing power or pledge of credit to support the issuance of the bonds, the purpose of the obligation must serve a paramount public purpose and any benefits to a private party must be incidental. See Poe, 695 So.2d at 675; Northern Palm Beach County Water Control Dist., 604 So.2d at 441-42; but see State v. Osceola County Indus. Dev. Auth., 424 So.2d 739 (Fla.1982) (no pledge of credit involved but Court determined whether obligation served paramount public purpose). In this case, the County levied taxes under section 125.0104, and therefore this Court must determine whether the convention center serves a paramount public purpose. We find that it does. In Poe v. Hillsborough County , the City of Tampa, Hillsborough County and the Tampa Sports Authority (TSA) contracted with the owner of the Tampa Bay Buccaneers for the construction of a new sports stadium, the acquisition and construction of a practice facility, and the demolition of the old sports stadium. Under the terms of the agreement, the Buccaneers were to use the stadium for thirty years and pay the TSA a $3.5 million annual fee for various uses. The TSA was also to receive $1.93 million annually from a surcharge on tickets to stadium events, including Buccaneers games, and retain fifty percent of all proceeds from non-Buccaneers events beyond the first $2 million in proceeds from such events, which was to accrue to the Buccaneers. See 695 So.2d at 674. The County, City and the TSA then filed a complaint seeking to validate several revenue bond issues for the purpose of covering the costs of the above projects. The TSA proposed to issue $33 million in bonds supported by state sales tax monies, $11.5 million in bonds supported by the local option four-cent tourist development tax, and $160 million in bonds supported by revenues from a county-wide local option half-cent sales tax. See id. at 675. The trial court found that the construction of the sports stadium would serve a valid public purpose but for the clause in the agreement granting the Buccaneers the first $2 million in proceeds from non-Buccaneer events. See id. Accordingly, the trial court declined to validate the bonds. On appeal, this Court reversed, holding, in part, that the sports stadium project served a valid public purpose, notwithstanding the fact the first $2 million in proceeds for non-Buccaneer events accrued to a private entity. See id. at 677. [12] In so holding, we quoted extensively from our prior decision in State v. Daytona Beach Racing & Recreational Facilities District, 89 So.2d 34 (Fla.1956), which rejected the State's argument that constructing, maintaining and operating a racing facility did not serve a proper public purpose: In determining whether the trial court erred in finding that the new community stadium in Tampa does not serve a paramount public purpose based solely on the clause in the lease granting the Bucs the first $2 million dollars in net revenues from non-Buc events net of direct costs, we find the cases validating the bonds for the construction and operation of the Daytona Beach Motor Speedway to be instructive. In the case of State v. Daytona Beach Racing & Recreational Facilities District, 89 So.2d 34 (Fla.1956), the City of Daytona Beach, through a special district set up to construct and operate a racing and recreational facility in the area, entered into a lease agreement with the Daytona Beach Motor Speedway corporation whereby the corporation was given the right of possession of a facility to be constructed for racing purposes for at least six months of each year for a period of forty years in order to conduct motorized races and other motorized events. Id. at 35. The special district retained the right of possession of the facility for its own purposes for the remaining six months of the year, and at other times when the corporation did not have events scheduled at the facility. The commission governing the special district subsequently filed a petition to validate $2,900,000 in bonds to pay for the cost of constructing, maintaining and operating the racing facility. The Circuit Court in Volusia County validated the bonds and the state appealed in part on grounds that issuance of the bonds would be improper because the racing facility did not serve a proper public purpose. We held that the issuance of the bonds was valid, and rejected the state's argument as follows: It [the State] cited State v. Town of North Miami, Fla., 59 So.2d 779; Adams v. Housing Authority of City of Daytona Beach, Fla., 60 So.2d 663; and City of Clearwater v. Caldwell, Fla., 75 So.2d 765. Each of these cases involved attempts of the city to use public funds to develop property for private benefit and gain and in each case the Court ruled such not to be proper public use. In each of these cases the private purpose was predominant, not incidental to a public purpose. The first case involved the development of an area for industrial purposes; the second involved the acquisition of an area for leasing to private enterprises for industrial and commercial purposes; and the third was concerned with the city being involved in the construction for leasing of hotels or apartments for private enterprise. In the instant case a private corporation would be in a position to utilize private gain from the facility, but only for a portion of the year. Under the agreement between the District and the corporation, the corporation is given the use of the facilities to be constructed for a period of not less than six months in each year for the conduct of a schedule of motorized racing activities and attractions. The Commission is to have the use of the facilities for its own programs for a period of not less than six months each year and at all other times when not scheduled for use by the Corporation. The corporation would conduct automobile racing events of international interest, as well as other attractions. Tourism, both as between the areas of our State and as between the States of this Nation, is a competitive business. The sand and the sun and the water are not sufficient to attract those seeking a vacation and recreation. Entertainment must be offered. Even ignoring its use by the District for periods aggregating one-half the year, or more, for other recreational and educational purposes for the public, the facility in question, considering the uses to which it will be adopted and their expected effect on the public welfare, is infinitely more a valid public purpose than would any of the schemes contemplated in the three instances cited above. The public purpose here seems to be predominant and the private benefit and gain to be incidental. . . . . In the instant case the purpose of the facility is both to increase trade by attracting tourists and to provide recreation for the citizens of the District. We have on numerous cases approved as a public purpose the development of recreational facilities. See State v. City of Daytona Beach, 160 Fla. 13, 33 So.2d 218; State v. City of Jacksonville, Fla., 53 So.2d 306; State v. City of Pensacola, Fla., 43 So.2d 340. Appellee's brief ably cites authorities in other jurisdiction which are in accord with the holdings of this Court on the matter. In State v. City of Miami, Fla., 41 So.2d 545, we upheld the selling of certificates to enlarge the Orange Bowl Stadium in Miami and appellant cites cases from several jurisdictions which also validated bonds for the construction of such recreational facilities. Therefore, it is our opinion that the development of the facility in question would serve a valid public purpose, and that the private benefit and gain would be incidental thereto. Appellant's final argument is that to lease the facility for a part of each year to a private corporation constitutes a violation of Section 10 of Article IX of the Constitution of Florida, F.S.A., which prohibits the loaning of the District's credit to any corporation. It contends that the effect of the contemplated contract with the Corporation is to allow it to use the facility for part of each year for forty years with no capital investment and consequently the credit of the District is loaned to the Corporation. But we have heretofore held that if an undertaking is for public purposes, Article IX, § 10 of the Constitution is not violated even though some private parties may be incidentally benefitted. We said in State v. Inter-American Center Authority, Fla., 84 So.2d 9, 12, supra: Since the erection of a Trade Center is designed to strengthen cultural relations among the countries of the Western Hemisphere, it can not be said that it amounts to a pledge or loan of the credit of the state to an individual, company, corporation or association in violation of Section 10, Article IX of the Constitution. In State v. Board of Control, Fla., 66 So.2d 209, 210, we said The mere fact that some one engaged in private business for private gain will be benefitted by every public improvement undertaken by the government or a governmental agency, should not and does not deprive such improvement of its public character or detract from the fact that it primarily serves a public purpose. An incidental use or benefit which may be of some private benefit is not the proper test in determining whether or not the project is for a public purpose. This Court has in numerous instances approved the imposition of taxes as being an aid to a public purpose. State v. Inter-American Center Authority, supra ; State v. City of Miami, Fla., 76 So.2d 294, dealing with an international trade mart (owned, however, by the city); C.V. Floyd Fruit Co. v. Florida Citrus Commission, 128 Fla. 565, 175 So. 248, 112 A.L.R. 562, involving a tax on citrus fruit for advertising purposes; State v. City of Daytona Beach, 160 Fla. 13, 33 So.2d 218, supra, upholding a tax for construction of an auditorium, stadium, boat basin and recreational center; State v. Dade County, Fla., 62 So.2d 404, where a warehouse and overhaul shop were to be constructed and then leased to airlines corporations and the revenue certificates were to be paid from rentals from such corporations; State v. City of Tallahassee, 142 Fla. 476, 195 So. 402, where the construction of an office building by the City for rental purposes was upheld as a public purpose; State v. Escambia County, Fla., 52 So.2d 125, where revenue certificates were sold to construct recreational facilities which could be leased out to private enterprises. It can clearly be seen that in the above cases this Court did not hold the imposition of taxes or use of tax monies to be invalid because some private businesses profited thereby, rather this Court ruled that the tax was for valid purposes notwithstanding the incidental private gain for private businesses. In State v. Town of North Miami, Fla., 59 So.2d 779, supra, involving an area for industrial purposes; in Adams v. Housing Authority of City of Daytona Beach, Fla., 60 So.2d 663, involving leasing of lands for private, commercial and business enterprises; and in City of Clearwater v. Caldwell, Fla., 75 So.2d 765, supra, involving the construction for leasing of hotels and apartments, we held that the constitutional provision against the lending of the credit of a city would be violated. In those cases the incidental public purpose accomplished was too inconsequential in comparison to the private gain. We do not feel that the case at bar has such shortcomings and we express our opinion to be, in conformance with our views in the numerous instances referred to earlier in this opinion, that the issuance of the $2,900,000 revenue bonds is in aid of a valid public purpose and does not violate Section 10 of Article IX [now Article VII] of our State Constitution. Poe, 695 So.2d at 675-77 (quoting Daytona Beach Racing & Recreational Facilities Dist., 89 So.2d at 36-38) (emphasis added). As we did in Poe and Daytona Beach Racing & Recreational Facilities Dist., we find the convention center in this case serves a paramount public purpose. As the trial court found, the convention center would, among other things, promote gainful employment, promote outside business interests and tourism, and provide a forum for educational, recreational and entertainment activities. Such interests have been found to serve a public purpose. See City of Miami, 379 So.2d at 653 (recognizing that interests such as providing forum for educational, civic, and community activities and increasing tourism and international trade serve public purpose). The fact that the proposed project will be operated by a private entity does not negate the public character of the project. See Osceola County Indus. Dev. Auth., 424 So.2d at 742; Daytona Beach Racing & Recreational Facilities Dist. v. Paul, 179 So.2d 349, 354 (Fla.1965); see generally State v. Orange County Indus. Dev. Auth., 417 So.2d 959, 962-63 (Fla.1982) (holding that revenue bonds issued for construction and operation of hotel by private corporation constituted paramount public purpose where hotel was integral part of convention center). Accordingly, we find the State has not met its burden by showing that the convention center fails to serve a paramount public purpose.