June 14, 2004
The staff of the Committee on Open Government is authorized to issue advisory opinions. The ensuing staff advisory opinion is based solely upon the facts presented in your correspondence.
As you are aware, I have received your correspondence concerning your requests made pursuant to the Freedom of Information Law to the New York City Economic Development Corporation (hereafter "EDC"). The records sought involve responses to requests for proposals ("RFP’s") solicited for the development of the Flushing Airport site in the College Point Corporate Park Industrial Urban Renewal Area in College Point, Queens.
In response to the requests, it was contended that, although the EDC is a local development corporation created pursuant to the Not-for-Profit Corporation Law, it gives effect to and complies with the Freedom of Information Law. Notwithstanding that statement and the issuance of a news release on February 3 by Mayor Bloomberg announcing the designation of College Point Wholesale Distribution Development LLC as the awardee of the contract, with the exception of a fact sheet describing the project, the remainder of the request was denied in its entirety. Judy E. Fensterman, EDC’s FOIL Appeals Officer, wrote that because the material terms of the contract had not been finalized, it is "conceivable that disclosure of all the responses could unduly impair and compromise NYCEDC’s ability to negotiate and potentially award a contract...in the best interests of the citizens of New York City."
You have requested an advisory opinion concerning the propriety of the denial of access. In this regard, I offer the following comments.
First, despite its creation as a local development corporation, I believe that the EDC is an "agency" required to comply with the Freedom of Information Law. Section 86(3) defines the term "agency" to mean:
"any state or municipal department, board, bureau, division, commission, committee, public authority, public corporation, council, office of 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" [§86(3)].
Specific reference is found in §1411 of the Not-for-Profit Corporation Law to local development corporations. The cited provision describes the purpose of those corporations and states in part that:
"it is hereby found, determined and declared that in carrying out said purposes and in exercising the powers conferred by paragraph (b) such corporations will be performing an essential governmental function."
Due to its status as a not-for-profit corporation, it is not clear in every instance that a local development corporation is a governmental entity; however, it is clear that such a corporation performs a governmental function.
Relevant to your inquiry is a decision rendered by the Court of Appeals in which it was held that a particular not-for-profit corporation, also a local development corporation, is an "agency" required to comply with the Freedom of Information Law [Buffalo News v. Buffalo Enterprise Development Corporation, 84 NY 2d 488 (1994)]. In so holding, the Court found that:
"The BEDC seeks to squeeze itself out of that broad multipurposed definition by relying principally on Federal precedents interpreting FOIL's counterpart, the Freedom of Information Act (5 U.S.C. §552). 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...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 of 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 to attract investment and stimulate growth in Buffalo's downtown and neighborhoods. As a city development agency, it is required to publicly disclose its annual budget. The budget is subject to a public hearing and is submitted with its annual audited financial statements to the City of Buffalo for review. Moreover, the BEDC describes itself in its financial reports and public brochure as an 'agent' of 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).
As I understand its functions, powers and duties, the EDC is an extension of and an integral component of the government of New York City. It was formed through the consolidation of agencies of New York City government, and the Mayor appoints the President and Chairman of its board of directors. In consideration of the "substantial governmental control" by the City of New York over EDC, in my view, the EDC clearly constitutes an agency that falls within the scope of the Freedom of Information Law.
Second, as a general matter, the Freedom of Information Law is based upon a presumption of access. Stated differently, all records of an agency are available, except to the extent that records or portions thereof fall within one or more grounds for denial appearing in §87(2)(a) through (i) of the Law.
The Court of Appeals expressed and confirmed its general view of the intent of the Freedom of Information Law in Gould v. New York City Police Department [87 NY 2d 267 (1996)], stating that:
"To ensure maximum access to government records, the 'exemptions are to be narrowly construed, with the burden resting on the agency to demonstrate that the requested material indeed qualifies for exemption' (Matter of Hanig v. State of New York Dept. of Motor Vehicles, 79 N.Y.2d 106, 109, 580 N.Y.S.2d 715, 588 N.E.2d 750 see, Public Officers Law § 89[b]). As this Court has stated, '[o]nly where the material requested falls squarely within the ambit of one of these statutory exemptions may disclosure be withheld' (Matter of Fink v. Lefkowitz, 47 N.Y.2d, 567, 571, 419 N.Y.S.2d 467, 393 N.E.2d 463)" (id., 275).
Just as significant, the Court in Gould repeatedly specified that a categorical denial of access to records is inconsistent with the requirements of the Freedom of Information Law. In that case, the agency contended that complaint follow up reports, also known as "DD5's", could be withheld in their entirety on the ground that they fall within the exception regarding intra-agency materials, §87(2)(g), an exception separate from that cited in response to your request. The Court, however, wrote that: "Petitioners contend that because the complaint follow-up reports contain factual data, the exemption does not justify complete nondisclosure of the reports. We agree" (id., 276). The Court then stated as a general principle that "blanket exemptions for particular types of documents are inimical to FOIL's policy of open government" (id., 275). The Court also offered guidance to agencies and lower courts in determining rights of access and referred to several decisions it had previously rendered, directing that:
"...to invoke one of the exemptions of section 87(2), the agency must articulate 'particularized and specific justification' for not disclosing requested documents (Matter of Fink v. Lefkowitz, supra, 47 N.Y.2d, at 571, 419 N.Y.S.2d 467, 393 N.E.2d 463). If the court is unable to determine whether withheld documents fall entirely within the scope of the asserted exemption, it should conduct an in camera inspection of representative documents and order disclosure of all nonexempt, appropriately redacted material (see, Matter of Xerox Corp. v. Town of Webster, 65 N.Y.2d 131, 133, 490 N.Y.S. 2d, 488, 480 N.E.2d 74; Matter of Farbman & Sons v. New York City Health & Hosps. Corp., supra, 62 N.Y.2d, at 83, 476 N.Y.S.2d 69, 464 N.E.2d 437)" (id.).
The provision upon which the EDC relied to deny access, §87(2)(c), permits an agency to deny access to records to the extent that disclosure "would impair present or imminent contract awards or collective bargaining negotiations." The key word in that provision in my opinion is "impair", and the question under that provision involves whether or the extent to which disclosure would "impair" the contracting process by diminishing the ability of the government to reach an optimal agreement on behalf of the taxpayers.
As I understand its application, §87(2)(c) generally encompasses situations in which an agency or a party to negotiations maintains records that have not been made available to others. For example, if an agency seeking bids or proposals has received a number of bids, but the deadline for their submission has not been reached, premature disclosure of those bids to another possible submitter might provide that person or firm with an unfair advantage vis a vis those who already submitted bids. Further, disclosure of the identities of bidders or the number of bidders might enable another potential bidder to tailor a bid in a manner that provides him with an unfair advantage in the bidding process. In such a situation, harm or "impairment" would likely be the result, and the records could justifiably be denied.
However, in a decision rendered more than twenty years ago, it was held that after the deadline for submission of bids or proposals has been reached and a contract has been awarded, "the successful bidder had no reasonable expectation of not having its bid open to the public" [Contracting Plumbers Cooperative Restoration Corp. v. Ameruso, 105 Misc. 2d 951, 430 NYS 2d 196, 198 (1980)]. Conversely, the Court of Appeals sustained the assertion of §87(2)(c) in Murray v. Troy Urban Renewal Agency [56 NY2d 888 (1982)], in which the issue pertained to real property transactions where appraisals in possession of an agency were requested prior to the consummation of a transaction. Because premature disclosure would have enabled the public to know the prices the agency sought, thereby potentially precluding the agency from receiving optimal prices, the agency's denial was upheld [see Murray v. Troy Urban Renewal Agency, 56 NY 2d 888 (1982)].
As indicated earlier, in a press release issued in February, the Mayor announced that a developer had been selected, and the fact sheet prepared later that month states that the EDC "received" more than 10 proposals" and that :
"The project will be developed by College Point Wholesale Distribution Development, LLC. The LLC was formed by a group of New York-based wholesale business owners specifically to respond to the Request for Proposals.
"The Developer has assembled a highly qualified and experienced team to assist in the project. The development manager is Jonathan Rose Companies, the architect is Hellmuth Obata and Kassabaum, and the construction manager is Turner Construction. The Developer’s advisors are the law firm Pryor, Cashman, Sherman and Flynn, and K. Backus & Associates, Real Estate Consultants."
It is clear that a contract has been awarded. Moreover, in a decision dealing specifically with records sought in relation to the RFP process, it was held by the Appellate Division that "once the contract was awarded...the terms of [the] RFP response could no longer be competitively sensitive" [Cross-Sound Ferry v. Department of Transportation, 219 AD2d 346, 634 NYS2d 575,577 (1995)].
In consideration of the foregoing, I believe that EDC’s denial of access is inconsistent with the Freedom of Information Law and its judicial interpretation. In an effort to encourage the EDC to reconsider its determination and to avoid litigation, a copy of this opinion will be forwarded to Ms. Fensterman.
I hope that I have been of assistance.
Robert J. Freeman
cc: Judy E. Fensterman
Rebecca A. Sheehan