State v. Clay County Development Authority, 31354

• Decision Date: 07 March 1962
• Docket Number: No. 31354,31354
• Citation: 140 So.2d 576
• Parties: 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

Page 576

140 So.2d 576

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.

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) ¹.

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. ² 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, struction, 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 revenueanticipation 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. ³ This Court in this quo warranto 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, ⁴ 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 ⁵ and Panama City v. State. ⁶ 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 project, 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 ...