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Real estate: Are private council talks OK?

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By Dave Boyce

Almanac Staff Writer

As lawyers know, words and arrangements of words can say more and less than they seem to say. When they appear in a statute, their precise meaning may be a matter of legal dispute.

This state of affairs appears to be central to the question of whether the state's open-meeting law, the Ralph M. Brown Act, allows the Portola Valley Town Council to discuss in closed session matters beyond prices and terms with respect to a potential real estate transaction.

Town Attorney Sandy Sloan, in interviews, defends the council's right to privately talk about matters such as the upsides and downsides of a deal. Jim Ewert, legal counsel for the California Newspaper Publishers Association, told the Almanac that the Brown Act requires such topics to be discussed in open session.

The most recent closed session concerned the fate of the former Al's Nursery at 900 Portola Road. Windmill School, a preschool, had been negotiating to buy the nursery site for some 18 months, but the deal had fallen apart at the last minute, nursery owner John Wu told the Almanac in March.

The town had shown periodic interest in the property, reportedly as a potential site for below-market-rate housing. Portola Valley has very high property values and faces a state mandate to offer a certain amount of housing for people with "moderate" incomes of around $119,000. (The town's property values put housing out of reach for low-income residents.)

Between July 2009 and October 2010, the council met seven times in closed session to discuss 900 Portola Road, according to the minutes archive. During that period, Al's Nursery never appeared as a discussion item in an open-session agenda.

On March 23, the council voted to go into an "urgent" closed session, a designation allowing it to meet in private without advance public notice. It did so because new information about the nursery had come to the council's attention since publication of the regular agenda, Mayor Ted Driscoll said. There was a need for immediate action, he said.

The council's official summary of that closed session's action: "None to report," as was reported for each of the previous seven closed sessions, the minutes say.

"In every meeting, we discussed prices and terms," Ms. Sloan said.

Prices and terms

Before going into closed session, the Brown Act states, a town council "shall hold an open and public session" to identify the negotiators and the property's address. The Portola Valley council does this as a matter of routine.

The Brown Act also says that a "legislative body of a local agency may hold a closed session with its negotiator ... to grant authority to its negotiator regarding the price and terms of payment for the purchase, sale, exchange, or lease" of the property.

Mr. Ewert says the above language limits a closed session discussion to price and terms. Background questions such as why the property is of interest, why of interest now, how the town learned of its availability, and the upsides and downsides of the purchase should be discussed in open session, he said.

"Where does it say in the statute or case law that the city can go into a closed session under this section to discuss any of those questions," he asked. "(The Brown Act) limits the scope of the closed session to a discussion with the city's own negotiator on purchase, sale, lease or exchange of real property."

What if the council had talked openly about its interest in 900 Portola Road, perhaps as open space or below-market-rate housing? "I don't think you'd want to talk about that in open session," Ms. Sloan said. "It does relate to terms of payment. That might affect the price and undermine our ability to obtain the property.

"Somebody in the audience can walk out and say 'Aha! I'm going to get on the phone right now and make an offer.' You do have to use some judgment about what's appropriate," she said.

Asked about Ms. Sloan's take on the Brown Act, Woodside Town Attorney Jean Savaree said that she tends to agree with her. A public agency negotiating over real estate should keep its upsides and downsides to itself to "help set terms and price. You're really trying to get the very best for the taxpayer," she said.

If the assertion about undermining the town's ability to buy the land held water, Mr. Ewert said, the courts would have erred in a 2002 ruling in Southern California.

In "Shapiro v. San Diego City Council," the council met in closed session to discuss price and terms of a new sports stadium, but the council did not specify an address in open session. In closed session, it discussed matters such as a stadium's design, parking, environmental impacts and effects on the city's homeless population, according to a California Appeals Court summary of the case.

In defense, the city argued that discussion of "matters of importance for the agreement being negotiated must be allowed, even if that topic is not specifically set forth in the agenda for the closed session."

The Portola Valley council's assertion that a public discussion of the purpose of purchasing 900 Portola Road would affect terms of payment is "just like" the San Diego council asserting a connection between a stadium's community impacts and its terms of payment, Mr. Ewert said.

Such assertions are speculative and were "emphatically rejected" by the court in the Shapiro case, Mr. Ewert said.

The San Diego council, Ms. Sloan said, strayed from closed-session restrictions. "I'm very aware of that and I don't let the council go far afield," she said. "There just is no comparison between what San Diego was doing and what Portola Valley was trying to do with this one piece of property."

The Portola Valley council, she said, negotiates real estate in private and determines its uses in public, citing purchase of the six-acre Spring Down property. It was negotiated in closed session, but its eventual use was debated openly and deliberatively by a 21-person ad hoc committee of citizen volunteers.

As to what the Brown Act means by limiting closed-session discussions to "prices and terms of payment," opinions differ, Ms. Sloan said. She acknowledged that her interpretation is "broad."

Mr. Ewert sees no wiggle room. "The legal standard that she, as the city attorney, is bound by law to apply is found in the state constitution and Shapiro, and both limit how the language can be interpreted," Mr. Ewert said in an email.

"(San Diego) tried to lump all of (the) peripheral issues into the definition of price and terms of payment. The court said NO! The constitution says the city SHALL narrowly construe the term 'price and terms of payment' when it limits the people's right of access (as a closed session does)."

Comments

 +   Like this comment
Posted by pv resident
a resident of Portola Valley: Central Portola Valley
on May 9, 2011 at 1:04 pm

IMHO, It is NOT OK! It is HIGH time for the council to be above board and crystal clear on ALL issues!


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