Elected officials and a CDC

by Chuck
(Summitt County, Ohio)

Reviewed: June 12, 2024

Visitor Question: We have a CDC (community development corporation) in our city that has created a roadmap for the development of key areas in the city. The CDC includes the Mayor, 3 council members (of 6), an attorney, and a few business owners. They hold closed meetings and do not share meeting notes.

They use this CDC to move zoning and other initiatives through the government at a fast pace because those voting on council have the majority with the mayor and they bypass the need to have public voting on zoning changes or variances.

Should their plans and meeting notes be open? Should you have the majority of your government on the CDC? Can this cause the "possibility" of steering changes for self gain among the CDC members? Can it be used to bypass the public's right to vote on changes and to have a say in the roadmap?

Thanks.

Editors Reply: This is an interesting series of questions. While these elected officials technically may fall within the law, it certainly doesn't pass the "smell test," does it?

None of us who write for this site are attorneys, and some of your questions are legal ones. We suggest that you contact the public records unit of the Ohio Attorney General's office at 614-466-2872. We will try to confine ourselves to commenting on the public policy wisdom, or lack of wisdom, shown by this arrangement.

First, a CDC is a private corporation not subject to an open meetings or sunshine law. In some states, statutes or case law spell out when gatherings that may discuss public policy matters are subject to an open records law. Ohio appears to be somewhat generous toward public officials gathering together outside of what all of us recognize as public meetings.

So no, they probably are not required to give notice of their meeting, allow visitors and observers at their meeting, or make their minutes public. This would be true in almost all other states as well.

The most questionable behavior you describe--and it's very suspect--is discussing zoning changes and variances among themselves behind closed doors. That is certainly absolutely unethical in the 21st century.

Even more alarming, you say they are avoiding a public vote on these matters. If that is occurring, it almost certainly would be illegal. Zoning is designed to be a very public process with plenty of ability for the public to comment on the proposed rezoning, oppose re-zoning, and become aware that a rezoning is being sought.

If you mean that there is discussion of rezoning behind closed doors, and consensus on how to vote is reached behind closed doors, so that the actual vote itself is in a public meeting but is very quick and without discussion, that is really despicable. To do something about this behavior probably would require filing suit or seeking injunctive relief from a court.

A zoning variance is granted by a different body from the city council. As such, a majority of the council should not have the power to do anything about an application for a variance at all--whether in public or in private!

You ask whether you should have the majority of your city council on the board of directors of a CDC. Generally, our answer to this is a resounding no.

We think it is good practice to have a mayor or one councilperson serving on the board of a CDC that is designed to work closely with a city government to carry out a publicly endorsed plan or all or part of a city. Some would think this behavior inappropriate too, but we favor a good solid interface between public and private interests when a public purpose is involved. In this kind of CDC, the public plan is a key part of the goal for creating the CDC; indeed, the CDC often is formed only to get around the need for the public sector to become involved in the risks of real estate investment and development.

In any case, there is no call for a majority of your elected officials to serve on a CDC board, as an ethical matter.

Could this CDC be used as a vehicle for making money on the part of elected officials? Yes, we're afraid so. If this is occurring, it makes a dubious situation even more disgusting.

Your last question is whether the CDC can bypass people's right to have a say. The answer is yes, a CDC can and does create a way around public opinion of the moment. Of course it is good practice for a CDC to regularly consult with "the community," since a CDC probably is organized as a charitable 501(c)(3) corporation under the IRS.

That does not mean that a CDC is required, or even advised, to ask the public about each little detail. Nor does it mean that the public is always right or insightful about real estate development decisions. It just means that the community's general opinion about a CDC's general direction should be weighed very heavily in a CDC's decision making process.

So the public does not necessarily have a right to have their opinions heard by a CDC on a regular or specific basis.

All of this commentary probably helps you decide what you want to do about the situation. Our opinion, and it's only an opinion, is that you should consider helping the public decide how to vote the next time that opportunity presents itself.

Also check out the legal aspects of the situation, since there are several possible lines of attack here.

Join GOOD COMMUNITY PLUS, which provides you monthly with short features or tips about timely topics for neighborhoods, towns and cities, community organizations, and rural or small town environments. Unsubscribe any time. Give it a try.