Charlottesville Area Fitness Club Operators Ass'n v. Albemarle Cnty. Bd. of Supervisors

• Decision Date: 10 January 2013
• Docket Number: 112233.,Record Nos. 110741
• Citation: 737 S.E.2d 1,285 Va. 87
• Court: Virginia Supreme Court
• Parties: CHARLOTTESVILLE AREA FITNESS CLUB OPERATORS ASSOCIATION, et al. v. ALBEMARLE COUNTY BOARD OF SUPERVISORS, et al. Charlottesville Area Fitness Club Operators Association, et al. v. Charlottesville City Council, et al.

285 Va. 87

737 S.E.2d 1

CHARLOTTESVILLE AREA FITNESS CLUB OPERATORS ASSOCIATION, et al.

v.ALBEMARLE COUNTY BOARD OF SUPERVISORS, et al.

Charlottesville Area Fitness Club Operators Association, et al.

v.Charlottesville City Council, et al.

Record Nos. 110741, 112233.

Supreme Court of Virginia.

Jan. 10, 2013.

David W. Thomas (Edward B. Lowry; MichieHamlett, on briefs), Charlottesville, for appellants.

Greg Kamptner, Deputy County Attorney, for appellees in Record No. 110741.

Allyson Manson–Davies, Deputy City Attorney (S. Craig Brown, City Attorney, on brief), for appellees in Record No. 112233.

Amici Curiae: Local Government Attorneys of Virginia, Inc., Virginia Municipal League, and Virginia Alliance of YMCAs (William R. Allcott, Jr.; Robert L. Hodges; Kevin J. O'Brien, Richmond; Kurt J. Krueger, Charlottesville; McGuireWoods, on brief), in support of appellees in Record No. 110741.

Amici Curiae: Local Government Attorneys of Virginia, Inc., Virginia Municipal League, Virginia Association of Counties, and Virginia Alliance of YMCAs (William R. Allcott, Jr.; Robert L. Hodges; Kevin J. O'Brien, Richmond; Kurt J. Krueger, Charlottesville; McGuireWoods, on brief), in support of appellees in Record No. 112233.

Present: KINSER, C.J., GOODWYN, MILLETTE, MIMS, McCLANAHAN, and POWELL, JJ., and RUSSELL, S.J.

Opinion by Justice S. BERNARD GOODWYN.

Charlottesville Area Fitness Club Operators Association, Atlantic Coast Athletic Clubs of Virginia, Inc., and Gym Quest, Inc., d/b/a Gold's Gym Charlottesville (collectively, the Fitness Clubs) appeal from judgments entered by the Circuit Courts of the City of Charlottesville and the County of Albemarle sustaining demurrers to their declaratory judgment actions challenging the lease of public property by the City of Charlottesville to the Piedmont Family YMCA, Inc., (YMCA) and a use agreement governing the leased property entered into between the City, Albemarle County, and the YMCA. Because we conclude the plaintiffs failed to assert a justiciable controversy, we will vacate the circuit courts' judgments and dismiss the declaratory judgment actions.

Background ¹

In October 2007, the City of Charlottesville advertised for bidding a proposed lease of property located in McIntire Park (the Lease) for the purposes of constructing and operating a non-profit youth and family community recreation facility (the Facility).² The City required that any bids for the lease be received by October 15 and include a proposed use agreement setting forth the terms, conditions and requirements for operation of the Facility (the Use Agreement). The YMCA submitted the only bid for the lease and, after public hearings, the leasing of the property was approved by ordinance adopted by the Charlottesville City Council on December 17, 2007. The YMCA subsequently entered into the Lease with the City of Charlottesville, and the Use Agreement with the City and Albemarle County, both dated January 15, 2008.

Pursuant to the Lease, the City agrees to lease, for an initial term of 40 years at a nominal rent of $1.00 per year, approximately three to five acres of property located on the western side of McIntire Park, the exact boundaries of the leasehold will be determined by the City following completion of a “Master Plan” for McIntire Park. The Lease grants the YMCA permission to occupy the property “for the purposes of constructing and operating a fitness and recreation center with such amenities as are provided for in the Use Agreement” and provides that “the use of the Facility shall be primarily for the benefit of residents of the City of Charlottesville and Albemarle County, and non-resident members of [the YMCA].”

The Use Agreement, incorporated as an exhibit to the Lease, obligates the County to “make a future capital contribution of $2,030,000 for construction of the Facility” and the YMCA to “diligently conduct a capital campaign to solicit contributions from private donors to pay for the cost of construction of the Facility.” The Use Agreement gives the City and the County each the right to appoint two members to the YMCA's board of directors and provides for an anticipated fee structure for residents of the City and County as well as financial assistance to be provided to residents by the YMCA based on specified income criteria. It also describes the components and core functions of the Facility and anticipated hours of operation. Additionally, the Use Agreement states that the County tentatively set aside $1,250,000 in its capital budgeting for construction of a family aquatics center and that the City may also commit to a future capital contribution of $1,250,000 for that purpose, including a competitive pool with specified access for the Charlottesville High School swim team.

A. Fitness Clubs' Action Against Albemarle County Board of Supervisors

The Fitness Clubs instituted their declaratory judgment action against the Albemarle County Board of Supervisors and the County's chief executive officer, Robert W. Tucker, Jr. (collectively, the Board), in May 2010. ³ They claim the Board should have issued either a “Request for Proposals” or an “Invitation to Bid” for “the provision of fitness services to County residents at below market rates in exchange for a $2 million payment” pursuant to the Virginia Public Procurement Act (VPPA), Code § 2.2–4300 et seq. According to the Fitness Clubs, had the Board done so, “one or all of [the Fitness Clubs] would have responded by submitting a bid and a proposal which would provide the County with superior services at a cost to the County less than that provided for in the Use Agreement.”

In Count I, the Fitness Clubs contend the Board's “award under the Use Agreement to the YMCA” is a contractually obligated payment for procurement of services “not authorized by [Code § ] 15.2–953.” ⁴ In Count II, the Fitness Clubs contend the Board made its “award under the Use Agreement to the YMCA without regard to the requirements of the VPPA.” In both Counts I and II, the Fitness Clubs allege the Board's actions were “arbitrary and capricious,” “exceeded the scope of the authority of the Board of Supervisors,” and “violated [the Fitness Clubs'] right to equal protection and due process under the Fifth and Fourteenth Amendments to the Constitution of the United States, and [Article I], Sections 3 and 11 of the Constitution of Virginia.” The Fitness Clubs seek a declaration that the actions of the County “are void on each and all of those grounds” and “that such payment may not be made.”

In Count III, the Fitness Clubs contend the Board's “decision to award the Use Agreement to the YMCA” was a “de facto disqualification of [the Fitness Clubs] as prospective bidders or offerors on that contract” and “in violation of the conditions of the VPPA.” The Fitness Clubs also contend that the Board's decision in April 2009 appropriating the funds for the $2.03 million payment “again had the effect of de facto disqualifying [the Fitness Clubs] as prospective bidders or offerors on that contract.” ⁵ They seek an “order that the disqualification of [them] as offerors or bidders be reversed, and that they be allowed to bid on the Use Agreement.” ⁶ They further ask the court to enjoin the Board “from proceeding under the Use Agreement.”

The Board filed a demurrer to the amended complaint, which the circuit court sustained.

B. Fitness Clubs' Action Against Charlottesville City Council

The Fitness Clubs also instituted a declaratory judgment action against the Charlottesville City Council and the City's acting chief administrative officer, Maurice Jones (collectively, the Council), in May 2010. In Count I of their complaint, the Fitness Clubs allege the Council “limited the bids it would accept to those which would provide for the construction of a ‘non-profit’ fitness and recreation center, thereby excluding any for-profit entity or facility from competition.” The Fitness Clubs contend that had the Council “instead advertised simply for the construction of a fitness and recreation center while continuing to require the reduced membership prices contained in the Use Agreement, it would still have received the bid from the YMCA” but “would also have received a bid from one or more of the [Fitness Clubs], each of whom has a proven track record of successfully running fitness facilities in the Charlottesville–Albemarle area.” According to the Fitness Clubs, they were “aggrieved by this exclusion, and suffered actual injury as a result of their being excluded from bidding on the proposed Lease and Use Agreement.”

In Count II, the Fitness Clubs allege that the Council “procured a service from the YMCA, namely the provision of fitness services at more favorable rates and the right to acquire exclusive use of a portion of that space, in exchange for valuable consideration” such that the “transaction was governed by the [VPPA].” They further contend the Use Agreement and allocation of funds were made “without regard for the requirements of the VPPA.” In both Counts, the Fitness Clubs claim the Council's actions were “arbitrary and capricious,” “exceeded the scope of [its] authority,” and “violated the [Fitness Clubs'] right to equal protection and due process under the Fifth and Fourteenth Amendments to the Constitution of the United States, and Sections 3 and 11 of the Constitution of Virginia.” ⁷ The Fitness Clubs request that the circuit court void the Lease and Use Agreement.

The Council filed a demurrer to the complaint, which the circuit court sustained.

Analysis

Because we are of the opinion that none of the claims asserted in the declaratory judgment actions presents a justiciable controversy, we will vacate the judgments of the circuit courts and dismiss the declaratory judgment actions because the circuit courts did not have authority to exercise jurisdiction.

The Fitness Clubs sought declaratory judgments concerning the actions of the Charlottesville City Council and the ...