Members of a redevelopment agency's project area committee who own property within the project area do not have a conflict of interest that prevents their participation, according to an attorney general's opinion.
The opinion, written at the request of Los Angeles City Attorney James Hahn, says that statutes and case law regarding project area committees makes clear that an exception is warranted to the normal conflict of interest rules.
Government Code § 1090 says government representatives and employees "shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members." That law requires not only an abstention by the conflicted member, but precludes the governing body from entering into the contract, according to the opinion by Deputy Attorney General Clayton Roche.
At issue in the Los Angeles case is whether a redevelopment agency may sign a development agreement after receiving advice from a project area committee (PAC) with members who own property within the project area. The redevelopment agency board appointed a 25-member project area committee, as allowed under the Community Redevelopment Law (Health and Safety Code §§ 33000-33855), to make recommendations on developing a 42-acre site within a project area.
Some of these PAC members eventually could sell their real estate to a developer or to the redevelopment agency, or they could even enter into a development contract with the agency. "Undeniably, they have their own personal, financial interests to protect and enhance when the PAC advises the agency … ," the attorney general's opinion said.
But the Community Redevelopment Law actually encourages the participation of people with a financial stake in the redevelopment project, the opinion notes. The law calls for representation on the PAC of homeowners, residential tenants, business owners and existing organizations.
"To apply the general provisions of (Government Code) § 1090 in such circumstances or to require the financially interested PAC members to abstain would undermine the Legislature's express determination that property owners in the project area are to render advice as members of the PAC," Roche wrote. "The redevelopment agency and the legislative body will receive the PAC's advice, knowing that some PAC members will have personal, financial interests to protect and promote. That is the process envisioned and sanctioned by the Legislature."
Roche continues, "[T]he potential ‘conflict' is not only considered allowable by the Legislature, it is required by the Legislature to give the PAC's advice a broad perspective. … To conclude that a PAC could not give advice because some of its members must own property in the project area would render meaningless the statutory scheme under which PACs are formed."
Attorney General's Opinion No. 99-304, 99 C.D.O.S. 5710, filed July 15, 1999.
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