Could Connecticut's State Properties Review Board contact third parties for market data on proposed state leases?

Plain-English summary

The Connecticut State Properties Review Board asked whether it could contact assessors, appraisers, brokers, lenders, property managers, landlords, and tenants to collect market information while reviewing proposed state leases. The Public Works Commissioner argued that these contacts violated statutes making the Commissioner the state's sole representative in third-party lease dealings and restricting disclosure of state real-estate needs.

Attorney General Richard Blumenthal concluded that the described procedures violated neither law. The Review Board was not negotiating, selecting a site, or representing the state in a lease. It was gathering market data to judge whether a proposed rental rate and business method were prudent, which fit its statutory duty to review all aspects of a transaction.

The Board also represented that it disclosed no proposed lease terms or nonpublic state needs. The information it discussed had already appeared in public requests for space and the State Facilities Plan. The AG read the disclosure prohibition as applying only to information not yet made public, because extending it to public information would produce an irrational result.

The opinion was limited to the procedures described. It did not approve communications that disclosed nonpublic needs or crossed into negotiating a lease for the state.

Currency note

This opinion was issued in 2010. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Who this opinion addressed in 2010

State Properties Review Board members

The Board could independently gather public market information needed to review a proposed lease. Its role remained review and approval, not negotiation or representation of the state in acquiring space.

Public Works officials

The Commissioner retained exclusive authority to represent the state in third-party dealings for acquiring, constructing, developing, or leasing real estate. The opinion did not treat independent market research as one of those dealings.

Real-estate professionals and state agencies

Third-party contacts were permissible on the stated facts because the Board asked for market information and did not reveal nonpublic lease terms or real-estate needs.

Common questions

Q: Could the Review Board contact a proposed lessor without permission?
A: The procedures described said it would not. The Board did not contact the proposed lessor or inspect the property without approval from an authorized Public Works representative.

Q: Could the Board negotiate lease terms?
A: No. The opinion relied on the fact that the Board gathered comparison data but did not negotiate or select sites.

Q: Did the confidentiality statute cover information already public?
A: The AG concluded that it did not. The criminal provision referred to unauthorized disclosure before the information was made public.

Q: Did the opinion bind criminal prosecutors?
A: No. A footnote stated that State's Attorneys had exclusive criminal-prosecution authority and were not bound by the Attorney General opinion.

Background and statutory framework

Conn. Gen. Stat. § 4b-3(e) gave the Review Board independent decision-making authority, and Conn. Gen. Stat. § 4b-3(f) charged it with considering all aspects of proposed state real-estate transactions. Conn. Gen. Stat. § 4b-3(d) reserved third-party lease representation to the Public Works Commissioner.

Conn. Gen. Stat. § 4b-27 prohibited unauthorized disclosure of nonpublic state real-estate needs and imposed a criminal penalty. The opinion cited Longley v. State Employees Retirement Comm’n for using common sense and presuming that the legislature intended a reasonable result.

Citations and references

Statutes:

• Conn. Gen. Stat. § 4b-3(e)
• Conn. Gen. Stat. § 4b-3(f)
• Conn. Gen. Stat. § 4b-3(d)
• Conn. Gen. Stat. § 4b-27

Case:

• Longley v. State Employees Retirement Comm’n, 284 Conn. 149, 171-72 (2007)

Source

• Landing page: https://portal.ct.gov/AG/Opinions
• Opinion page: https://portal.ct.gov/ag/opinions/2010-formal-opinions/edward-s-greenberg-chairman-state-properties-review-board-formal-opinion-2010006-attorney-general-st

Original opinion text

Edward S. Greenberg, Chairman State Properties Review Board, Formal Opinion 2010-006, Attorney General State of Connecticut

Attorney General's Opinion

Attorney General, Richard Blumenthal

date, 2010

Edwin S. Greenberg, Chairman

State of Connecticut State Properties Review Board

165 Capitol Avenue, Room 123

Hartford, CT 06106

Dear Chairman Greenberg:

You have asked for a formal opinion concerning whether certain procedures the State Properties Review Board (“SPRB”) uses to collect market data on commercial lease rental rates violate Sections 4b-3(d) and 4b-27 of the General Statutes. For the reasons that follow, I conclude that the procedures you have described in your opinion request do not violate either of those statutes.

I. SPRB’s Statutory Authority

As you note in your opinion request, the General Assembly created the SPRB in 1975 as a “watchdog” agency to ensure that the State’s leasing and purchasing of property would be free from “political patronage, cronyism, personal spoils systems, and friendship.” Final Report of the Sub-Committee on Leasing, Joint Standing Committee on Appropriations, January 7, 1975. In fact, SPRB’s enabling legislation itself says the agency “shall have independent decision making authority.” Conn. Gen. Stat. § 4b-3(e).

Consistent with this legislative intent, Section 4b-3(f) of the General Statutes broadly charges SPRB with reviewing “real estate acquisitions, sales, leases and subleases proposed by the Commissioner of Public Works, the acquisition, other than condemnation, or the sale or lease of any property by the Commissioner of Transportation. . . .” Conn. Gen. Stat. § 4b-3. “Such review shall consider all aspects of the proposed actions, including feasibility and method of acquisition and the prudence of the business method proposed.” Id. (emphasis added). “The board shall also cooperate with and advise and assist the Commissioner of Public Works and the Commissioner of Transportation in carrying out their duties.” Id.

II. Background

According to your opinion request, when SPRB considers “all aspects” of a lease proposal, one aspect it considers is whether the proposed rental rate is consistent with the market rate. To do so, SPRB identifies the subject market area and collects information on market trends, rentals of similar space in the subject market, and lease terms that are typical for the property type. In addition to information obtained from the Department of Public Works (“DPW”) or other state agency proposing a lease, SPRB contacts municipal assessors, commercial real estate appraisers and brokers, commercial bankers, property managers, parking garage operators, tenants and landlords of similar properties, published market data, listings and advertisements, and construction cost manuals.

With respect to leases proposed by DPW, SPRB does not contact the proposed lessor or inspect a subject property without the permission of an authorized DPW representative. In addition, when contacting third parties about information concerning market rates, SPRB does not disclose proposed lease terms or any information regarding the State’s real estate needs that is not publicly available. In this respect, you note that when a proposed lease is before SPRB for review, public information relating to the needs addressed by that lease proposal is available in the State’s advertised requests for space, as well as in the State Facilities Plan. The advertisements for space are available in newspapers and on DPW’s website and inform the public of the state agency concerned and the use, general location and space required. The State Facilities Plan, which is published on the Office of Policy and Management (“OPM”) website and is updated every two years in accordance with state statute, also discloses real estate needs for each state agency, including facility location by municipality and the amount of space approved for each leased facility. The State Facilities Plan also provides the budgeted amount approved for lease costs at each facility.

In seeking market information relevant to a proposed lease, SPRB does not negotiate lease terms. Nor is SPRB involved in determining or approving the space requirements or site selections for state agencies. Rather, SPRB’s role is limited to reviewing and approving leases proposed by DPW.

III. Discussion

According to your opinion request, a dispute has arisen between SPRB and DPW about whether the activities you have described violate Sections 4b-3(d) and 4b-27 of the General Statutes. The pertinent provision of Section 4b-3(d) provides that “the Commissioner of Public Works shall be the sole person authorized to represent the state in its dealings with third parties for the acquisition, construction, development or leasing of real estate for housing the offices or equipment of all agencies of the state. . . .” Conn. Gen. Stat. § 4b-3(d). Section 4b-27, in turn, provides that:

[n]o person affiliated with any requesting agency shall discuss outside of that agency its real estate needs or interests prior to formal notification to the commissioner, and in no event without the authorization and supervision of the Commissioner of Public Works, which authorization shall be filed with the review board; nor shall anyone with knowledge of said needs gained as a result of his employment by the state disclose any information regarding real estate needs to anyone except as authorized by the commissioner. Anyone who discloses any such information without authority by the commissioner before said information is made public by the commissioner shall be guilty of a class A misdemeanor.

Conn. Gen. Stat. § 4b-27 (Emphasis added).

You have attached a February 26, 2010 letter to you from DPW Commissioner Raeanne Curtis. In that letter, Commissioner Curtis concluded that these provisions, when read together, broadly prohibit SPRB from communicating with third parties when reviewing proposed leases. We disagree.

First, the Commissioner’s interpretation would frustrate the very goals the Legislature sought to achieve when it created the SPRB. As set forth above, the General Assembly created the SPRB in 1975 as a “watchdog” agency to ensure that the State’s leasing and purchasing of property would be free from “political patronage, cronyism, personal spoils systems, and friendship.” Final Report of the Sub-Committee on Leasing, Joint Standing Committee on Appropriations, January 7, 1975. If the SPRB were forced to rely exclusively on information provided by the very state agencies over which it is charged with acting as a “watchdog,” its ability to carry out its statutory charge of reviewing proposed transactions to ensure they are truly in the State’s best interests would be severely impeded.

Second, the Commissioner’s interpretation is not supported by the plain language of the statutes at issue. Section 4b-3(d) of the General Statutes vests in the Commissioner of Public Works exclusive authority “to represent the state in its dealings with third parties for the acquisition, construction, development or leasing of real estate for housing the offices or equipment of all agencies of the state. . . .” Conn. Gen. Stat. § 4b-3(d) (emphasis added). While the Commissioner correctly describes SPRB’s communications “as dealings with third parties,” her interpretation overlooks the language describing the types of dealings described in the statute. Specifically, Section 4b-3(d) only vests exclusive authority in the Commissioner when it comes to dealings “for . . . leasing of real estate for housing the offices or equipment of all agencies of the state. . . .” Conn. Gen. Stat. § 4b-3(d) (emphasis added). As you note in your opinion request, SPRB’s communications with third parties are not made for the purpose of leasing real estate on behalf of the State. Rather, such communications are made for the purpose of obtaining relevant market data about a proposed lease, which SPRB is statutorily charged with reviewing. Accordingly, we do not interpret Section 4b-3(d) to prohibit SPRB from engaging in the specific conduct you describe in your opinion request. On the contrary, the communications you describe are entirely consistent with SPRB’s broad authority to review “all aspects of the proposed actions, including feasibility and method of acquisition and the prudence of the business method proposed.” Conn. Gen. Stat. § 4b-3(f).

Nor does Section 4b-27 prohibit SPRB from communicating in the manner described in your opinion request.[1] That statute prohibits anyone with knowledge of the State’s real estate needs gained as a result of employment by the state from disclosing “any information regarding real estate needs to anyone except as authorized by the commissioner.” Conn. Gen. Stat. § 4b-27. Importantly, the statute also provides that “[a]nyone who discloses any such information without authority by the commissioner before said information is made public by the commissioner shall be guilty of a class A misdemeanor.” Id.

The prohibition contained in Section 4b-27, therefore, plainly applies only to information not previously made public. Indeed, a contrary interpretation would be entirely illogical, as it would prohibit individuals who gained public information from disclosing such information if those individuals obtained the information as a result of their state employment. It is well-settled, of course, that statutes should be interpreted according to their plain meaning and not in a way that would produce bizarre or irrational results. See, e.g., Longley v. State Employees Retirement Comm’n, 284 Conn. 149, 171-72 (2007) (“It is a fundamental principle of statutory construction that courts must interpret statutes using common sense and assume that the legislature intended a reasonable and rational result.”) Aside from the obvious difficulties that would arise in trying to prove whether such an individual actually gained knowledge of public information from public or non-public sources, it is difficult to conceive what public policy such a prohibition would advance.

According to your opinion request, none of the activities you have described would result in the disclosure of information not previously made public in advertisements for requests for space or the State Facilities Plan. As a result, we conclude that Section 4b-27 does not prohibit such activities.

IV. Conclusion

We conclude that Sections 4b-3(d) and 4b-27 do not prohibit SPRB from engaging in the kinds of communications you describe in your opinion request. In reaching that conclusion, we express no view about whether any conduct not described or fairly characterized in your request is prohibited by these or any other statutes.

Very truly yours,

RICHARD BLUMENTHAL

ATTORNEY GENERAL

[1] It bears specific note that Section 4b-27 includes a criminal penalty. This Office lacks authority to bring a criminal prosecution under that statute. The State’s Attorneys have exclusive jurisdiction over such prosecutions and are not bound by the opinions of this Office.