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OML-AO-4165

March 24, 2006

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.

Dear

I have received your letter in which you referred to discussions by the Yonkers City Council relating to a development in the City and a variety of real property transactions.

According to your letter, an executive session was recently held to discuss "the proposed Master Development Designation Agreement (MDDA)" relating to:

"...several things that will affect not only the price of the land that the City is selling the developer, but aspects of the development that will affect whether certain parcels currently owned by private owners will be part of the potential site assemblage, and whether the municipality will ultimately pay for those acquisitions through TIF financing or some other mechanism."

You added that:

"It is our understanding that since the amount we request the developers pay for the city owned sites (and the method by which it is paid) could impact the amount that private owners negotiate from the developer for their sites."

You asked whether I "agree that executive session is justified by the fact that this MDDA could affect the prices of land paid by the developer to the private land-owners, a cost that might ultimately be borne by the City." In my view, the propriety of executive sessions in the circumstances that you described relate primarily to two considerations. In this regard, I offer the following comments.

First, as you are aware, the Open Meetings Law is based on a presumption of openness. Stated differently, meetings of public bodies must be conducted open to the public, except to the extent that an executive session may properly be conducted in accordance with paragraphs (a) through (h) of §105(1). Consequently, a public body, such as a city council, cannot enter into an executive session to discuss the subject of its choice. From my perspective, the grounds for entry into executive session are based on the need to avoid some sort of harm that would arise by means of public discussion, and that is so with respect to the only ground for entry into executive session that appears to be relevant in relation to the matter.

Specifically, §105(1)(h) of the Open Meetings Law permits a public body to enter into executive session to discuss:

"the proposed acquisition, sale or lease of real property or the proposed acquisition of securities, or sale or exchange of securities held by such public body, but only when publicity would substantially affect the value thereof."

In my opinion, the language quoted above, like the other grounds for entry into executive session, is based on the principle that public business must be discussed in public unless public discussion would in some way be damaging, either to an individual, for example, or to a government in terms of its capacity to perform its functions appropriately and in the best interest of the public. It is clear that §105(1)(h) does not permit public bodies to conduct executive sessions to discuss all matters that may relate to the transaction of real property; only to the extent that publicity would "substantially affect the value of the property" can that provision validly be asserted.

A key question, in my view, involves the extent to which information relating to possible real property transactions has become known to the public. The more that is known, the less likely it is that publicity would have an impact on the value of a parcel or in some way damage the interests of taxpayers. I note that the language of §105(1)(h) does not refer to negotiations per se or the impact of publicity upon negotiations relating to a parcel; rather its proper assertion is limited to situations in which publicity would have a substantial effect on the value of the property. It has been advised, for example, that when a municipality is seeking to purchase a parcel and the public is unaware of the location or locations under consideration, it is possible if not likely that premature disclosure or publicity would indeed substantially affect the value of the property. In that kind of situation, publicity might result in speculation or offers from others, thereby precluding the municipality from reaching an optimal price on behalf of the taxpayers. However, when details concerning a potential real property transaction, such as the location and potential uses of the property, are known to the public, publicity would have a lesser effect or impact on the value of the parcel. Again, the more that is known to the public, the less likely it is that publicity would affect the value of a parcel.

In this instance, the development involves not one but several parcels. That being so, it is possible that public discussion relative to a particular parcel could affect the negotiations and, therefore, the prices paid for other parcels where no final price has yet been established. In those or similar situations, insofar as publicity would "substantially" affect the value of those parcels, I would agree that an executive session may properly be held. However, in other situations in which publicity would have little or no impact upon the value of real property, I do not believe that there would be a basis for conducting an executive session.

Second, based upon your comments, it appears that the ability to conduct executive sessions is limited and that various aspects of the Council’s consideration of the matter must be discussed in public. You referred to "periodic updates to the public" and explanations of the financing of the project, and I would conjecture that other aspects of the Council’s consideration of the project should also be discussed in public. General discussions that serve to educate Council members regarding the process and the steps needed to move forward towed completion likely could not justifiably be discussed in private.

In short, it is reiterated that executive sessions may properly be held in my opinion only to the extent that publicity "would substantially affect the value" of one or more parcels of real property. I recognize that it may be difficult and perhaps cumbersome during the course of a meeting to enter into executive session, return to an open meeting and later enter into executive session again, should the need arise. However, those kinds of actions by the Council may be fully appropriate and necessary to comply with the Open Meetings Law.

I hope that I have been of assistance.

Sincerely,

 

Robert J. Freeman
Executive Director

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