Request By:
Mr. Richard Northern
Wyatt, Tarrant & Combs
Citizens Plaza
Louisville, Kentucky 40202
Opinion
Opinion By: Steven L. Beshear, Attorney General
Please reference your letter to this office dated September 17, 1981, concerning questions pertaining to plans of your client, the Louisville Baseball Committee (Committee). This Committee is a non-profit unincorporated group which would like to raise money to provide a facility in Louisville suitable for a professional baseball team. After studies by engineers and architects on its behalf, the Committee has determined that the best option available for providing such a facility is to renovate the existing Fairgrounds Stadium to make it suitable for baseball, soccer, and softball, as well as football. The Fairgrounds Stadium is owned in fee simple by the Commonwealth of Kentucky acting through the Kentucky State Fair Board and is within the City of Louisville.
The Committee proposes the following plan to accomplish its fund raising and the renovation of the Stadium:
(1) Contributions to the fund raising drive will be made by private citizens directly to the City of Louisville. Because the City is a political subdivision of the Commonwealth, contributions to the City appear to be tax-deductible.
(2) The City will make a grant of these contributions to the Louisville Baseball Committee Inc. (the "Corporation").
(3) The Corporation then will lease the Fairgrounds Stadium from the State Fair Board for a nominal rental payment for a period to be determined. The period will be slightly longer than the estimated period that will be required to renovate the Fairgrounds Stadium. The lease will provide that any improvements made by the Corporation will become the property of the Fair Board upon termination of the lease. During the term of the lease, the Corporation will hire engineers, architects, contractors and whatever other persons are needed to accomplish the renovation. It is the intention of the Corporation to terminate the lease at the conclusion of the renovation, thereby allowing the improvements to become the property of the State Fair Board.
Specifically, you request an opinion by this Office concerning your client's plan with respect to the following questions:
(1) In that a private corporation, whose assets have been assembled solely through private contributions, will enter into contracts for the renovation of the Fairgrounds Stadium, and in that no tax funds whatsoever will be used for the renovation, do the provisions of KRS Chapter 45A (The Model Procurement Code) apply to the letting of these renovation contracts?
(2) In that the State Fair Board will lease the Fairgrounds Stadium to the Corporation for a nominal rental payment solely for the purpose of obtaining renovations which will become the property of the State Fair Board, is the Fair Board obligated to seek competitive bids for the lease?
(3) In that no funds of the Commonwealth will be used for the renovation of the Fairgrounds Stadium, do the provisions of KRS 45.750-800 (The Capital Construction and Equipment Financing Act) apply to these renovation contracts?
OPINION OF THE ATTORNEY GENERAL
(1) The Model Procurement Code (Code), KRS Chapter 45A, does not apply to the Corporation nor to its contracts for the planned renovation. The Code applies only where a public agency is the purchaser, buyer or lessee. It need not be applied where the public agency is the seller or lessor. OAG 80-117. Under the situation described by your letter, the Board is the lessor. The Corporation is not a public agency as that term is used in the Code.
(2) The proposal of the Corporation to lease the Stadium for the purposes of renovation is specifically governed by KRS 56.515, and may be authorized upon an affirmative finding by the Executive Department for Finance and Administration that the purposes of the Board and the public purposes of the Commonwealth would be promoted by the proposed renovation. There is no requirement that such private lessee, using private capital, seek competitive bids for the contemplated construction.
(3) Since the contemplated construction is to be accomplished by a private corporation with private capital, the provisions of KRS 45.750-.800 do not apply. The Capital Construction and Equipment Financing Act regulates the expenditure of certain funds appropriated by the General Assembly.
We trust this information is helpful and sufficient.