Council Member Robb Davis had a yearlong residential lease that did not provide for an option to renew or extend the term. The City Council was considering a number of projects that were located relatively close to the Mr. Davis’s rented residence. California law “prohibits any public official from making, participating in making, or using his or her official position to influence a governmental decision in which the official has a financial interest.” Under the Fair Political Practices Campaign Act, a financial interest exists is when “it is reasonably foreseeable that the decision will have a material financial effect on one or more of the public official’s interests.”
In determined whether Council Member Davis had a conflict of interest, the California Pair Political Practices Commission stated that the effect of a decision is material as to a leasehold interest in real property if the decision will change the termination date of the lease, increase or decrease the potential rental value of the property, increase or decrease the rental value of the property, impact the official’s right to sublease the property, change the official’s actual or legally allowable use of the real property or impact the official’s use and enjoyment of the real property. Further, the effects on the real property must be reasonably foreseeable and the factors only apply before the termination of the lease.
The Commission found that the impact on the rental value might not be realized until after Mr. Davis vacates the unit and there is a potential but not actual possibility that the rent will change. As to recommendations on new parking management, the Commission noted that Mr. Davis did not own a car, and his lease includes an option to rent parking, which he has not exercised. Therefore, there was no conflict of interest because neither he nor the lease property was going to be affected by the decision. Further, the parking decision was not going to affect either the termination date of the Mr. Davis’s lease nor the potential rental value of the leased property. Therefore, the decision will not have a material financial effect on the Mr. Davis’s interest.
The decision to extend the lease for downtown buildings also would not change Mr. Davis’s potential rental value of his leased property and the approval of a contract with the environmental and planning consultants for preparation in itself would not affect Mr. Davis’s use and enjoyment and would not result in a conflict of interest, as it does not change the termination date of the lease, increase or decrease rent value or affect the legally allowable use of the property. In regard to hotel proposals and the establishment of an art entertainment district, the Commission found that the projects would not change the termination date of Mr. Davis’s lease, that the impact on traffic near Mr. Davis’s residence due to the development of hotels would have less than a significant impact on the property and the development of an art studio would not effect the use or enjoyment of the property.
HARRIET A. STEINER, CA FPPC ADV. A-14-175, 2014 WL 5797812 (2014)