Can a Florida community redevelopment agency spend its trust-fund money on tourism promotion and nonprofit programs?

Subject

Community Redevelopment Agencies -- Audits

Plain-English summary

State Senator Joseph Abruzzo asked the AG to revisit its 2010 opinion (AGO 2010-40) on what community redevelopment agencies can spend money on, prompted by an Auditor General operational audit of the Delray Beach Community Redevelopment Agency. The AG declined to comment formally, explaining that a request about the audit and about whether the agency should seek an opinion would most appropriately come from the redevelopment agency itself, not from a legislator. It offered informal comments instead.

On the substance, the AG reread AGO 2010-40, updated the statutes and case law it relied on, and found nothing that would change its conclusions, so that opinion remains the office's statement of the law. The core of that earlier opinion: the primary focus of a community redevelopment agency is eliminating and preventing slum and blight, and the authorized uses of redevelopment trust fund money are largely "bricks and mortar" redevelopment activities. Promoting an area after it has been redeveloped can still fit within the Community Redevelopment Act of 1969, because reading the act to forbid all promotion would treat redevelopment as a static process. But the AG cautioned that funds paying entities to promote tourism or to provide socially beneficial programs should demonstrate a nexus to carrying out the act's purposes, and that grants to entities promoting tourism and economic development, or to nonprofits providing socially beneficial programs, would appear to fall outside the act's scope.

The AG observed that the Auditor General's report reached a compatible conclusion: the audit found the Delray Beach agency had not clearly documented that its contributions to certain organizations were restricted to activities authorized by the act, and recommended better documentation. The AG echoed that the agency should adopt more thorough procedures ensuring funds are used only for authorized activities. It stressed that the ultimate determination of whether a particular project satisfies the act is for the redevelopment agency itself, and directed that any concerns about criminal misconduct go to the State Attorney for the 15th Judicial Circuit and any ethics allegations go to the Florida Commission on Ethics.

Currency note

This opinion was issued in 2014. 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.

Common questions

Can a community redevelopment agency pay for tourism promotion?
The AG reaffirmed that promoting an already-redeveloped area can fit the Community Redevelopment Act, but spending must show a nexus to the act's purposes. It cautioned that grants to entities promoting tourism and economic development would appear outside the act's scope.

What is the core purpose of redevelopment trust funds?
Eliminating and preventing slums and blight, through activities like reducing crime, providing affordable housing, clearing slums, and rehabilitating or conserving a redevelopment area. The authorized uses are largely "bricks and mortar."

Did the AG change its 2010 opinion?
No. The AG reread AGO 2010-40, updated its statutes and case law, found no substantive changes, and confirmed it still reflects the office's position.

What did the audit recommend?
That the Delray Beach agency document in its records that the organizations it funds use the money only for activities authorized by the act. The AG agreed the agency should adopt more thorough documentation procedures.

Background and statutory framework

The opinion turns on two limits. First, on the AG's role: section 16.01(3) confines the office to advising government officials on questions of law relating to their own duties, which is why the AG said any opinion request about the Delray Beach audit should come from the agency, not a senator. Second, on the agency's spending: the Community Redevelopment Act of 1969 ties redevelopment trust fund money to eliminating slum and blight, and AGO 2010-40 read the authorized uses as redevelopment activities, allowing post-redevelopment promotion only where it furthers the act's purposes.

The AG aligned its informal comments with the Auditor General's operational audit, which faulted the agency for not documenting that contributions were restricted to authorized activities. It also flagged the referral paths for anything beyond a legal question: the State Attorney for the 15th Judicial Circuit for possible criminal misconduct, and the Florida Commission on Ethics for alleged violations of the Code of Ethics for Public Officers and Employees in Part III, Chapter 112.

Citations

• section 16.01(3), Florida Statutes
• Part III, Chapter 112, Florida Statutes
• Op. Att'y Gen. Fla. 2010-40

Source

• Landing page: https://www.myfloridalegal.com/ag-opinions/community-redevelopment-agencies-audits
• Original PDF: https://www.myfloridalegal.com/print/pdf/node/8098

Original opinion text

The Honorable Joseph Abruzzo

Senator, 25th District

Room 222, Senate Office Building

404 South Monroe Street

Tallahassee, Florida 32399-1100

Dear Senator Abruzzo:

Thank you for your letter of March 5th, 2014, requesting that this office review Attorney General Opinion 2010-40 in light of the Auditor General's Operational Audit Report No. 2014-013 of the Delray Beach Community Redevelopment Agency. Attorney General Bondi has asked me to respond to your letter.

The Florida Attorney General is statutorily limited to providing legal advice and opinions to governmental officers on questions of law relating to their own duties and responsibilities.[1] Any comment from this office regarding an audit performed on the Delray Beach Community Redevelopment Agency and suggesting that the agency request an Attorney General's Opinion on matters covered by the audit would most appropriately come from the redevelopment agency itself. Thus, after reviewing the information you have submitted, it does not appear that this matter is appropriate for formal comment by this office.

However, in an effort to assist you, I offer the following informal comments.

You have specifically requested that this office review Attorney General Opinion 2010-40. I have reread the opinion and updated the statutory and case law cited therein and determined that there are no substantive changes to either that would change our conclusion in that opinion. Thus, I find that Attorney General Opinion 2010-40 continues to reflect this office's position as the current statement of the law on this question. As you know, Attorney General Opinions are, by statute, advisory, and are not binding. Attorney General Opinions constitute this office's best legal advice on the particular question presented and are considered persuasive by Florida courts.[2]

This office continues to consider promoting the use of a redeveloped area to be within the purposes of the Community Redevelopment Act of 1969. We would, of course, suggest that community redevelopment funds to pay entities promoting tourism or providing socially beneficial programs should demonstrate a nexus to carrying out the purposes of the act in order to justify the use of community redevelopment funds. It appears from the Operational Audit of the Delray Beach Community Redevelopment Agency that the Auditor General agrees with this conclusion. I note the following language from page 5 of the audit:

"The CRA provided us an opinion from its General Counsel characterizing the above-noted contributions as being for promotional activities and indicating that through inclusion of these activities in the CRA Plan, the CRA's contributions were consistent with State law. However, neither the CRA Plan nor CRA records clearly demonstrated the CRA Board's determination of the extent to which the funds contributed to the above-noted organizations had been appropriately restricted to activities authorized by the Act."

Thus, the recommendation by the Auditor General that "the CRA should document in its records that these organizations' use of the funding is restricted to activities authorized by the Act." It appears that the CRA should implement more thorough documentation procedures ensuring the use of funding only for those activities authorized by the community redevelopment act.

As this office suggested in Attorney General Opinion 2010-40:

"[I]t would appear that the primary focus of a community redevelopment agency is to eliminate and prevent the development or spread of slums and blight. This may be accomplished by reducing or preventing crime, by providing affordable housing, clearing slums and redeveloping in a community redevelopment area, or by rehabilitating or conserving in a community redevelopment area, or any combination or part thereof. The enumerated uses of community redevelopment trust fund moneys are likewise couched in terms of redevelopment activities involving "bricks and mortar" in a manner of speaking, rather than promotional campaigns to encourage people to populate the area once the redevelopment has been accomplished. However, to read the statute as precluding the promotion of a redeveloped area once the infrastructure has been completed would be narrowly viewing community redevelopment as a static process."

The opinion also suggests that "grants to entities which promote tourism and economic development, as well as to nonprofits providing socially beneficial programs would appear outside the scope of the community redevelopment act." Ultimately, however, the determination of whether a particular project satisfies the terms of the act is to be made by the redevelopment agency itself.

Should either you or the Auditor General have concerns that these issues may reflect possible criminal misconduct, please forward this matter to the State Attorney for the 15th Judicial Circuit, The Honorable Dave Aronberg. Allegations of violations of the Code of Ethics for Public Officers and Employees, Part III, Chapter 112, Florida Statutes, should be forwarded directly to the Florida Commission on Ethics.

I trust that these informal comments will be helpful to you.

Sincerely,

Gerry Hammond

Senior Assistant Attorney General

GH/tsh

Enclosures

[1] See section 16.01(3), Florida Statutes, and Department of Legal Affairs Statement Concerning Attorney General Opinions (copies enclosed).

[2] See American Home Assurance Company v. National Railroad Passenger Corporation, 908 So. 2d 459 (Fla. 2005); State v. Family Bank of Hallandale, 623 So. 2d 474, 478 (Fla. 1993) (although an opinion of the Attorney General is not binding on a court, it is entitled to careful consideration and generally should be regarded as highly persuasive).