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FOIL-AO-13994

April 4, 2003

The staff of the Committee on Open Government is authorized to issue advisory opinions. The
ensuing staff advisory opinion is based solely upon the information presented in your
correspondence, unless otherwise indicated.

Dear

I have received your letter of March 24, as well as a variety of related correspondence. You
have sought an advisory opinion pertaining to the Freedom of Information Law in relation to requests
made to the City of Yonkers and the Yonkers Industrial Development Agency (YIDA).

By way of background, you wrote that:

"On April 25, 2002, the YIDA passed a resolution ratifying the
formation of Yonkers Baseball Inc., a.k.a. Yonkers Baseball
Development Inc. At all relevant times, Yonkers Mayor John
Spencer has served as Chairman of the YIDA and Deputy Mayor Phil
Amicone as a voting member of the YIDA board of directors.

"Yonkers Baseball Inc. was created as a for-profit subsidiary public
benefit corporation of the YIDA. The YIDA is the sole shareholder
of the corporation. The resolution ratifying its formation also
appointed Deputy Mayor Amicone as one of the three voting directors
and President. Upon information and belief, the officers of the
corporation were subsequently amended with Mayor Spencer
appointed as Chairman and Deputy Mayor Amicone as a member of
the board of Yonkers Baseball Inc./Yonkers Baseball Development
Inc."

You requested records October 3 from the City of Yonkers concerning the proposed baseball
stadium and retail development complex. More than six weeks later, you were advised that "the
request had been sent to the wrong entity" and that it should be made to YIDA. A request was
subsequently made on November 27 to YIDA, which granted access many of the records of your
interest. As you are aware, Philip G. Spellane, whose firm represents YIDA, wrote to me recently,
indicating that YIDA has not denied access to records and has "produced initial responsive
documents" to you. You later wrote that some of the documents have not been disclosed.

While I cannot know which among the records of your interest might not have been
disclosed, the questions that you raised relate to more general concerns. Specifically, you seek an
opinion concerning the following:

"1) Is the for-profit public benefit corporation created by the YIDA
subject to FOIL?

"2) If the Mayor serves as Chairman of the for-profit public benefit
corporation and the Deputy Mayor is a member of the Board, does
FOIL require production of documents of the corporation in response
to a FOIL requested directed to them even if the documents are not in
their physical possession?"

It is your understanding that the Mayor of the City of Yonkers also serves as Chairman of the YIDA
and the its subsidiary, Yonkers Baseball, Inc./Yonkers Baseball Development, Inc. and that the
Deputy Mayor also serves on the boards of those entities. If that is so, you asked whether your
request of November 27 to the YIDA, "identifying them as individuals who may have possession
of the documents", would "create an obligation on each of them to produce the documents."

In this regard, I offer the following comments.

First, whether the public benefit corporation created by the YIDA is "for-profit" or otherwise
is not, in my view, determinative of its status under the Freedom of Information Law. From my
perspective, based on judicial decisions, the key factor involves the extent to which there is
governmental control over the entity.

A resolution adopted by the YIDA created Yonkers Baseball, Inc. and it states that the YIDA
"desires to act as sole shareholder thereof." The resolution also authorizes its Chairman, Vice-
Chairman or Executive Director to appoint the officers of Yonkers Baseball, Inc. Those three
persons in other roles are, respectively, the Mayor, Deputy Mayor and Vice Chairman of the YIDA.
Additionally, a document prepared by the Department of State characterized as "Entity Information",
indicates that the mailing address for service of process on Yonkers Baseball, Inc. is the YIDA.
Those factors, in my opinion, indicate that Yonkers Baseball, Inc. is an agency required to comply
with the Freedom of Information Law.

Section 86(3) of that statute defines the term "agency" to mean:

"any state or municipal department, board, bureau, division,
commission, committee, public authority, public corporation, council,
office or other governmental entity performing a governmental or
proprietary function for the state or any one or more municipalities
thereof, except the judiciary or the state legislature."

In consideration of the foregoing, as a general matter, the Freedom of Information Law pertains to
entities of state and local government in New York.

Although for profit and not-for-profit corporations typically are not governmental entities
and, therefore, fall beyond the scope of the Freedom of Information Law, the courts have found that
the corporate status of those entities is, alone, not determinative of their status under that statute.
Rather, they have considered the extent to which there is governmental control over those
corporations in determining whether they fall within the coverage of those statutes.

In the first such decision, Westchester-Rockland Newspapers v. Kimball [50 NY2d 575
(1980)], the issue involved access to records relating to a lottery conducted by a volunteer fire
company, the Court of Appeals found that volunteer fire companies, despite their status as not-for-
profit corporations, are "agencies" subject to the Freedom of Information Law. In so holding, the
Court stated that:

"We begin by rejecting respondent's contention that, in applying the
Freedom of Information Law, a distinction is to be made between a
volunteer organization on which a local government relies for
performance of an essential public service, as is true of the fire
department here, and on the other hand, an organic arm of
government, when that is the channel through which such services are
delivered. Key is the Legislature's own unmistakably broad
declaration that, '[a]s state and local government services increase and
public problems become more sophisticated and complex and
therefore harder to solve, and with the resultant increase in revenues
and expenditures, it is incumbent upon the state and its localities to
extend public accountability wherever and whenever feasible'
(emphasis added; Public Officers Law, §84).

For the successful implementation of the policies motivating the
enactment of the Freedom of Information Law centers on goals as
broad as the achievement of a more informed electorate and a more
responsible and responsive officialdom. By their very nature such
objections cannot hope to be attained unless the measures taken to
bring them about permeate the body politic to a point where they
become the rule rather than the exception. The phrase 'public
accountability wherever and whenever feasible' therefore merely
punctuates with explicitness what in any event is implicit" (id. at
579].

In another decision rendered by the Court of Appeals, Buffalo News v. Buffalo Enterprise
Development Corporation [84 NY 2d 488 (1994)], which involved facts somewhat analogous to the
instant situation, the Court found that a not-for-profit corporation, based on its relationship to an
agency, was itself an agency subject to the Freedom of Information Law. The decision indicates that:

"The BEDC principally pegs its argument for nondisclosure on the
feature that an entity qualifies as an 'agency' only if there is
substantial governmental control over its daily operations (see, e.g.,
Irwin Mem. Blood Bank of San Francisco Med. Socy. v American
Natl. Red Cross, 640 F2d 1051; Rocap v Indiek, 519 F2d 174). The
Buffalo News counters by arguing that the City of Buffalo is
'inextricably involved in the core planning and execution of the
agency's [BEDC] program'; thus, the BEDC is a 'governmental entity'
performing a governmental function for the City of Buffalo, within
the statutory definition.

"The BEDC's purpose is undeniably governmental. It was created
exclusively by and for the City of Buffalo...In sum, the constricted
construction urged by appellant BEDC would contradict the
expansive public policy dictates underpinning FOIL. Thus, we reject
appellant's arguments," (id., 492-493).

Most recently, in a case involving a not-for-profit corporation, the "CRDC", the court found
that:

"...the CRDC was admittedly formed for the purpose of financing the
cost of and arranging for the construction and management of the
Roseland Waterpark project. The bonds for the project were issued
on behalf of the City and the City has pledged $395,000 to finance
capital improvements associated with the park. The CRDC denies the
City has a controlling interest in the corporation. Presently the Board
has eleven members, all of whom were appointed by the City (see
Resolution #99-083). The Board is empowered to fill any vacancies
of six members not reserved for City appointment. Of those reserved
to the City, two are paid City employees and the other three include
the City mayor and council members. Formerly the Canandaigua City
Manager was president of the CRDC. Additionally, the number of
members may be reduced to nine by a board vote (see Amended
Certificate of Incorporation Article V(a)). Thus the CRDC's claim
that the City lacks control is at best questionable.

"Most importantly, the City has a potential interest in the property in
that it maintains an option to purchase the property at any time while
the bonds are outstanding and will ultimately take a fee title to the
property financed by the bonds, including any additions thereto, upon
payment of the bonds in full. Further, under the Certificate of
Incorporation, title to any real or personal property of the corporation
will pass to the City without consideration upon dissolution of the
corporation. As in Matter of Buffalo News, supra, the CRDC's
intimate relationship with the City and the fact that the CRDC is
performing its function in place of the City necessitates a finding that
it constitutes an agency of the City of Canandaigua within the
meaning of the Public Officers Law and therefore is subject to the
requirements of the Freedom of Information Law...

"In Smith v. City University of New York, supra at page 713, the
Court of Appeals held that 'in determining whether the entity is a
public body, various criteria or benchmarks are material. They
include the authority under which the entity is created, the power
distribution or sharing model under which it exists, the nature of its
role, the power it possesses and under which it purports to act, and a
realistic appraisal of its functional relationship to affected parties and
constituencies.' In the present case, the CRDC is clearly exercising
more than an advisory function and qualifies as a public body within
the meaning of the Public Officers Law. The CRDC is a formally
constituted body with pervasive control over the entity it was created
to administer. It has officially established duties and organizational
attributes of a substantive nature which fulfill a governmental
function for public benefit. As such its operations are subject to the
Open Meetings Law" (Canandaigua Messenger, Inc. v. Wharmby,
Supreme Court, Ontario County, May 11, 2001).

I note that the Appellate Division unanimously affirmed the findings of the Supreme Court just over
a year ago [292 AD2d 835 (2002)].

In view of the means by which Yonkers Baseball, Inc. was created and the extent to which
government officials have control over that entity, which appears to be total, and in consideration
of judicial precedent, I believe that the entity is clearly an "agency" required to comply with the
Freedom of Information Law.

Secondly, I believe that its records would fall within the coverage of the Freedom of
Information Law when the issue is approached from a different vantage point. That statute pertains
to agency records, and §86(4) defines the term "record" expansively to include:

"any information kept, held, filed, produced, reproduced by, with or
for an agency or the state legislature, in any physical form whatsoever
including, but not limited to, reports, statements, examinations,
memoranda, opinions, folders, files, books, manuals, pamphlets,
forms, papers, designs, drawings, maps, photos, letters, microfilms,
computer tapes or discs, rules, regulations or codes."

Based upon the language quoted above, documents need not be in the physical possession of an
agency to constitute agency records; so long as they are produced, kept or filed for an agency, the
courts have held they constitute "agency records", even if they are maintained apart from an agency's
premises.

For instance, it has been found that records maintained by an attorney retained by an
industrial development agency were subject to the Freedom of Information Law, even though an
agency did not possess the records and the attorney's fees were paid by applicants before the agency.
The Court determined that the fees were generated in his capacity as counsel to the agency, that the
agency was his client, that "he comes under the authority of the Industrial Development Agency" and
that, therefore, records of payment in his possession were subject to rights of access conferred by the
Freedom of Information Law (see C.B. Smith v. County of Rensselaer, Supreme Court, Rensselaer
County, May 13, 1993).

Additionally, in a decision rendered by the Court of Appeals, it was found that materials
received by a corporation providing services for a branch of the State University that were kept on
behalf of the University constituted "records" falling with the coverage of the Freedom of
Information Law. I point out that the Court rejected "SUNY's contention that disclosure turns on
whether the requested information is in the physical possession of the agency", for such a view
"ignores the plain language of the FOIL definition of 'records' as information kept or held 'by, with
or for an agency'" [see Encore College Bookstores, Inc. v. Auxiliary Services Corporation of the
State University of New York at Farmingdale, 87 NY 2d 410. 417 (1995)].

In sum, insofar as records sought are maintained for the City or the YIDA, i.e., as the parent
of a subsidiary corporation, I believe that those agencies would be required to direct the custodian
of records sought that are maintained apart from the City or YIDA records to disclose them in
accordance with the Freedom of Information Law, or obtain them in order to disclose them to you
to the extent required by law.

Also pertinent is an element of the decision cited earlier involving a finding by the Court of
Appeals that certain entities that are not clearly governmental are, in consideration of their function
and relationship with government, subject to the Freedom of Information Law. Specifically, in
Westchester-Rockland Newspapers, supra, the Court considered the definition of "record" and noted
that:

"...not only are the expanding boundaries of governmental activity
increasingly difficult to draw, but in perception, if not in actuality,
there is bound to be considerable crossover between governmental
and nongovernmental activities, especially where both are carried on
by the same person or persons" (id., 581).

Even if the functions of Yonkers Baseball, Inc. might be viewed as non-governmental, they are
implemented by government officials. Further, City and YIDA officials were designated to serve
Yonkers Baseball, Inc. not as private citizens, but in their capacities as government officials. As in
the case cited above, there is clearly "considerable crossover" in the activities of officials of the City
and the YIDA and the activities of those persons in connection with Yonkers Baseball, Inc. That
being so, I believe that the records maintained by Yonkers Baseball, Inc. are, irrespective of their
physical location, kept or produced for the City and/or the YIDA and, from that approach as well,
are subject to the Freedom of Information Law.

Lastly, even when an entity is not subject to the Freedom of Information Law, records
pertaining to that entity that come into the possession of a member of its board who serves on a
corporate board, ex officio, due to his or her government position, would constitute agency records
that fall within the coverage of that statute. If, for example, the Mayor receives records in his office
from the YIDA or Yonkers Baseball, Inc., I believe that they would be City of Yonkers records, and
that the City would be obliged to respond to a request for those records in accordance with the
Freedom of Information Law.

I hope that I have been of assistance.

Sincerely,

 

Robert J. Freeman
Executive Director

RJF:jm

cc: Hon. John Spencer
Ed Sheeran
Philip G. Spellane