[align=left]
- 37 -

On the other hand, if the State or a political subdivision has given, lent, or used its credit, a project "must serve a paramount public purpose and any benefits to a private party must be incidental." Osceola County, 752 So. 2d at 536. We have explained that under the paramount public purpose test, if the benefits to a private party are the paramount purpose, then the project will not pass constitutional muster. See Orange County Indus. Dev. Auth. v. State, 427 So. 2d 174, 179 (Fla. 1983). Furthermore, we have explained that a broad, general public purpose cannot sustain a project that is purely a private enterprise in terms of direct and actual use. Id. (citing State v. Manatee County Port Auth., 193 So. 2d 162 (Fla. 1966); State v. Town of North Miami, 59 So. 2d 779 (Fla. 1952)).


Most of the cases in which this Court has addressed the prohibition against a public entity giving, loaning or using its credit to aid a private entity have occurred in the context of the issuance of bonds. See, e.g., N. Palm Beach County Water Control Dist. v. State, 604 So. 2d 440, 440-42 (Fla. 1992) (determining whether bonds proposed to be issued by a water control district to finance road improvements within a unit of the district contemplated a pledge of the district's credit); Linscott v. Orange County Indus. Dev. Auth., 443 So. 2d 97, 99-101 (Fla. 1983) (assessing whether bonds proposed to be issued by a county industrial development authority to finance the construction of an office building for a multistate insurance company constituted a pledge of credit); Nohrr, 247 So. 2d at







- 38 -

306-09 (analyzing whether bonds proposed to be issued by a county educational facilities authority to finance dormitory-cafeteria projects at a private higher educational institution contemplated the lending or use of credit). The few cases where the challenged arrangements most closely resemble the agreement in this case, Bailey, Raney, Bannon, and Williams, concern leases or temporary conveyances of land from a public entity to a private entity without the issuance of bonds. As explained above, under Williams and Bannon, a lease by a public entity to a private entity is not per se invalid under article VII, section 10 of the 1968 Florida Constitution. See Williams, 291 So. 2d at 578; Bannon, 246 So. 2d at 740-




41. Thus, it follows that by entering into a lease, a public entity does not necessarily give, lend, or use its credit to aid a private entity.


In finding that the JAA was not pledging its credit through the agreement in the instant case, the district court concluded that as in Bannon, the JAA's participation was limited to that of a lessor and the JAA bore no responsibility for financing, promotion, or development of Majestic's commercial project. Jackson- Shaw I, 510 F. Supp. 2d at 733. The district court reasoned that the JAA bore no direct or indirect obligation to pay any debt and its fee interest in Woodwings East was not obligated by any potential default by Majestic. Id. The district court concluded that the commitment to build a public road was not a pledge of credit and that the JAA's credit was neither encumbered by the Option in which Majestic







- 39 -

had the exclusive right to lease Woodwings East at no cost to Majestic nor by the PGL for a rent allegedly less than market value. Id.


Jackson-Shaw contends that the district court erred because the JAA takes on both direct and indirect financial obligations through the Option and PGL.


With regard to the Option, Jackson-Shaw argues that JAA has to pay up to $750,000 to build a road extension and has to provide wetlands credits. Jackson- Shaw also argues that through the Option, the JAA is pledging not to use the property for other purposes during the term of the agreement. Jackson-Shaw argues that if Majestic decides not to exercise the Option or cannot complete the benchmarks required before it has to execute a binding lease, the JAA will have forfeited its rights to sell the property, lease it at a market rate, or use it for public purposes during the term of the agreement. With regard to the PGL, Jackson-Shaw contends that the JAA has agreed to allow Majestic to recoup all of its expenses with interest and development and management fees before it has to pay a nominal rent. Furthermore, Jackson-Shaw argues that the PGL gives Majestic the authority to pledge to its lenders its right to develop and occupy the property, and if Majestic defaults, the lenders may foreclose, take possession of the property, and recoup debt and costs before the JAA can receive revenue.


With regard to Jackson-Shaw's argument that the JAA incurs financial obligations under the Option by agreeing to pay up to $750,000 to build a road and







- 40 -

to provide fifty acres of wetlands mitigation, at first blush it may appear that the JAA has agreed to expend public funds or public resources. Such obligations appear absent in this Court's decisions in Bailey, Raney, Bannon, and Williams.


See Williams, 291 So. 2d at 578 (suggesting that public funds were not spent by the municipality in leasing public land to a private corporation); Bannon, 246 So. 2d at 740-41 (observing that the district had no monetary obligations and no financial responsibility under the lease); Raney, 88 So. 2d at 150 (noting that the nonprofit corporation agreed to construct a building on the leased land at its own expense); Bailey, 111 So. at 120 (remarking that under the contract the city did not have to obtain or appropriate money for the board of trade). However, the JAA had already planned and budgeted to construct a public road through Woodwings East and the JAA already owns any land that will be used for the wetlands mitigation.


More importantly for the analysis of these provisions under the constitutional prohibition, while these aspects of the Option may represent the arguable expenditure of public funds or resources, they do not equate to a gift, loan, or use of credit under the constitution. As we have defined credit and the lending of credit, the constitutional prohibition contemplates not just the use of public funds but the imposition of a new financial liability and a direct or indirect obligation to pay a debt of a third party. See Hous. Fin. Auth. of Polk County, 376







- 41 -

So. 2d at 1160; Nohrr, 247 So. 2d at 309. Under this Court's narrow definition of this prohibition, the money for the road and land for wetlands mitigation do not constitute credit.


In addition, the other challenged aspects of the Option do not represent the gift, loan, or use of credit. Just because the JAA is agreeing not to use its property for other purposes during the term of the Option does not mean that it is somehow giving, lending, or using its credit. Similarly, just because Majestic may not exercise the Option or may not complete the benchmarks required does not mean that the JAA is somehow giving, lending, or using its credit because it will not be able to sell the property, lease it to someone else, or use it for other purposes during this time period. While these aspects of the Option may be favorable to Majestic, they do not violate the constitutional prohibition.


Similarly, the challenged aspects of the PGL do not represent the gift, loan, or use of credit. Even more clearly than with the Option, the JAA's role in the PGL is limited to that of a lessor. See Bannon, 246 So. 2d at 741. First, the fact that the JAA has agreed to allow Majestic to recoup all of its expenses with interest and development and management fees before the net revenue is determined does not mean that the JAA has given, lent, or used its credit. Furthermore, Majestic will only pay fifty percent of the net revenue as rent if it is greater than the fixed rent. Through this alternative rental structure, the JAA has not become responsible







- 42 -

for financing, promotion, or development of Majestic's proposed projects. See id.


Second, Majestic's ability to pledge to its lenders its right to develop and occupy the property does not contemplate a gift, loan, or use of the JAA's credit. Under the PGL, the JAA's fee simple title to the land is not encumbered by any loans to Majestic, and the JAA is not obligated to Majestic's creditors. Thus, as in Bannon, the public entity bears no responsibility to the private tenant's creditors and its ownership of the land is not committed for such. See id. Likewise, the ability of Majestic's lenders to recoup debt and costs before the JAA can receive revenue rent does not entail the gift, loan, or use of credit.


In sum, we agree with the district court that the JAA has not given, lent, or used its credit to aid Majestic under the Option and PGL.


Because the district court determined that the JAA did not lend its credit, the district court determined that the transaction needed to only serve a public purpose, rather than a paramount public purpose. Jackson-Shaw I, 510 F. Supp. 2d at 733 (citing N. Palm Beach County Water Control Dist., 604 So. 2d at 442). The district court determined that the extension of the road into Woodwings East served a public purpose, noting that the JAA had previously budgeted for the road improvement as a planned capital project in accordance with its powers and that it would retain ownership of the road. Id. at 734. The district court found that the JAA's mitigation of wetlands on its property did not constitute a payment of funds







- 43 -

to Majestic and served a valid public purpose. Id. The district court also determined that the "alleged `land bank' for Majestic, created by the Option encumbering all 328 acres of Woodwings East for five to fifteen years, without payment by Majestic, sufficiently furthers a public purpose by facilitating Majestic's revenue-producing development." Id. The district court reasoned, "Whether or not the Majestic transaction will in fact meet JAA's expectations, JAA's attempt with this transaction to transform a dormant piece of property into a viable and area-compatible revenue-producing industrial and office park sufficiently fulfills a public purpose." Id. The district court determined that the perceived favorability of the terms in the Option and PGL to Majestic did not negate the overall public purpose and that the benefit to Majestic was incidental to JAA's prime objective and public purpose of raising revenues for the JAA for many years. Id.


As the district court correctly observed, if the JAA has not given, lent, or used its credit to aid Majestic through the Option and PGL, the agreement must merely serve a public purpose. See N. Palm Beach County Water Control Dist., 604 So. 2d at 442. While the agreement meets this test, it may be a closer question than in cases such as Bannon or Williams, where there was an explicit legislative determination of public purpose. See Williams, 291 So. 2d at 578 (finding that through the statutes providing general legislative authority to municipalities, the







- 44 -

Legislature had determined that the lease of public lands for private purposes was a valid public purpose); Bannon, 246 So. 2d at 740 (finding it unnecessary to determine whether the development of the leased property served a primarily public or private purpose and noting that the district was exercising a power conferred to it by the Port Facilities Financing Law (chapter 315, Florida Statutes), which provided in pertinent part, that the powers conferred by it and the exercise of those powers were proper public and municipal purposes (citing section 315.14, Florida Statutes)); see also Hous. Fin. Auth. of Polk County, 376 So. 2d at 1160 ("A legislative declaration of public purpose is presumed to be valid, and should be deemed correct unless so clearly erroneous as to be beyond the power of the legislature."). While the Legislature granted the JAA broad powers in its Charter, including the powers to enter into contracts and leases, it did not explicitly determine that the exercise of these powers was a proper public purpose. See generally ch. 2004-464, §§ 1-5, at 440-55, Laws of Fla. Rather, the Legislature included in the Charter the following declaration of purpose: "The authority created by this act and the purposes which it is intended to serve is hereby found to be for a county and public purpose." Ch. 2004-464, § 1(14), at 454, Laws of Fla.


Moreover, even though the Charter provides that the provisions of chapter 315 are applicable to the JAA, see ch. 2004-464, § 1(13), at 454, Laws of Fla., chapter 315







- 45 -

no longer contains the provision relied upon by this Court in Bannon, see § 315.14, Fla. Stat. (1999), repealed by ch. 2000-325, § 3, at 3561, Laws of Fla.


Despite the lack of a specific legislative determination of public purpose that explicitly addresses the JAA's exercise of powers in the instant case, we find that the agreement satisfies a public purpose. Jackson-Shaw concedes that the public purpose test is satisfied "by the fact that even the below-market revenue the Authority hopes to receive can be used to reduce the public tax burden."


Appellant's Initial Br. at 43 n.17. Jackson-Shaw cites this Court's decision in Williams in which this Court observed that "[i]n fact, it would be beneficial in many instances to lease surplus public property for non-public purposes so that the citizens and taxpayers would realize some tax relief resulting from the income."


291 So. 2d at 578.


In the instant case, the agreement concerns surplus public property: 328 acres of undeveloped, vacant land known as Woodwings East. Jackson-Shaw I, 510 F. Supp. 2d at 697-99, 707-11. The testimony and evidence introduced at trial indicates that before entering into the challenged agreement, the JAA sought to have the property developed and leased in order to generate revenue for the JAA.


For example, in 2003, the JAA conducted a workshop at which it discussed strategies for putting some of its real estate assets into production. Id. at 699-700.


The JAA's intent was to derive revenue for the airport, and the JAA decided that it







- 46 -

would ground lease its property, rather than develop its property itself. Id. at 700.


As an outcome of the workshop, the JAA created the Enterprise Division to focus on maximizing the value of the JAA's undeveloped property and to diversify the JAA's revenue sources. Id. at 697, 700. The JAA also sought someone to develop Woodwings East with one of its primary objectives being obtaining a long-term revenue stream for the JAA. Id. at 700-01.


The testimony and evidence introduced at trial also indicates that the JAA envisioned the Option and PGL with Majestic as enabling it to produce revenue.


For instance, the proposal to the JAA's board of directors in 2005 characterized the arrangements as "provid[ing] JAA with a vehicle to generate significant cash flow for vacant non-producing land with a large industry leader with a successful track record of performing as promised and generating significant cash flow for landowners." Id. at 704. The JAA board approved the Option and PGL in 2005 and approved the revised Option and PGL in 2006. Id. at 705-06. The board chairman, Mary Burnett, testified that she voted for the project because " `I thought in the best interest of the Jacksonville International Airport this was the right thing to do. . . . This was a good use for the property. . . . [I]t's been vacant for many years. It was going to generate revenue. It was going to give people jobs. It was a good thing for the community.' " Id. at 705.







- 47 -

Thus, in entering into the agreement with Majestic, the JAA intended to generate revenue. While the JAA may not generate revenue if Majestic chooses not to exercise the Option and enter into a PGL, the agreement offers the JAA the potential to generate revenue if Majestic exercises the Option and enters into a PGL. To the extent that the revenue may ultimately provide tax relief, the agreement fulfills a valid public purpose. See Williams, 291 So. 2d at 578.10


Moreover, under the public purpose test it is immaterial that the primary beneficiary of a project is a private party, as long as the public interest is sufficiently strong. See Hous. Fin. Auth. of Polk County, 376 So. 2d at 1160.


Thus, because we find that the public interest in producing revenue for the JAA is sufficiently strong, the alleged favorability of the terms to Majestic cannot cause the agreement to fail the public purpose test.


Finally, while Jackson-Shaw does not contest that the agreement serves a public purpose, Jackson-Shaw argues that the Option and PGL fail to serve a paramount public purpose. Because we find that the JAA has not given, lent, or








10. It appears that any tax relief is an indirect consequence of the JAA's revenue production contemplated in the Option and PGL. The JAA does not possess "independent taxing authority, and receives its revenues from state and federal grants, landing fees, rentals, concession fees and facility lease fees." Jackson-Shaw I, 510 F. Supp. 2d at 697. Thus, any tax relief would presumably come from the JAA's reduced need for state and federal grants funded by tax monies.








- 48 -

used its credit to aid Majestic through the Option and PGL, we need not determine whether the agreement serves a paramount public purpose. See N. Palm Beach Water Control Dist., 604 So. 2d at 442.


In sum, we hold that the JAA has not given, lent, or used its credit to aid Majestic in violation of article VII, section 10 of the 1968 Florida Constitution.


The agreement serves a public purpose and does not violate the constitution.



CONCLUSION


For the reasons explained above, we answer both of the certified questions in the negative. We conclude that the JAA has not become a joint owner with Majestic through the challenged agreement, and it has not given, lent, or used its credit to aid Majestic through the challenged agreement. Having answered the certified questions, we return this case to the Eleventh Circuit.


It is so ordered.


WELLS, ANSTEAD, PARIENTE, LEWIS, and CANADY, JJ., concur.


QUINCE, C.J., concurs in result only.


POLSTON, J., did not participate.


NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND IF FILED, DETERMINED.


Certified Question of Law from the United States Court of Appeals for the Eleventh Circuit - Case No. 07-10521 John S. Mills and Bryan S. Gowdy of Mills, Creed and Gowdy, P.A., Jacksonville, Florida, Michael G. Tanner and Stuart F. Williams of Tanner Bishop, Jacksonville, Florida,








- 49 -

for Appellant

Cindy A. Laquidara, Chief Deputy General Counsel, City of Jacksonville, Jacksonville, Florida, for Appellee
[/align]