Imagine learning that Wal-Mart is plopping a huge distribution center into your community only after your City Council approves - - without discussion - - an agreement with the company that includes zoning changes, water service, fire protection, and $6.18 million in incentives.
Imagine further that a group of people met secretly for months to set up that situation, and you have no right to know they exist or the content of their meetings. Nor can you identify elected officials on that shadow committee who have banked large financial contributions from the Walton family and their affiliates.
A developer's paradise - - now endangered by a wise court ruling.
From the Milwaukee Journal Sentinel:
High court says Beaver Dam meetings should be public
By DAN BENSON
dbenson@journalsentinel.com
A state Supreme Court ruling that a Beaver Dam economic development group is a quasi-governmental organization and must obey the state’s open meetings and open records laws has been hailed as a victory for open government and criticized as a threat to economic development.
The Beaver Dam Area Development Corp. secretly negotiated for months in 2003 with Wal-Mart to build a $55 million, 1.2-million-square-foot distribution center on about 400 acres north of the city. The group negotiated zoning changes, water service, fire protection and other items, including $6.18 million in incentives.
Those details did not become public until the City Council approved without discussion a 13-page memorandum of understanding with Wal-Mart.
Bill Lueders, president of the Wisconsin Freedom of Information Council, called the 4-2 decision “a good ruling,” saying the development agency “had no legitimate right to claim that it was exempt” from the open meetings and records laws.
Jim Hough, a consultant to the Wisconsin Economic Development Association, said “there’s not a lot of guidance” in the court’s decision, which held that whether a group is quasi-governmental needs to be decided on a case-by-case basis.
“This case has left everybody confused,” Hough said.
“It’s hard to provide legal advice in light of that decision. It’s difficult, if not impossible."
Legislative action?
The association’s board of directors met Wednesday to discuss drafting legislation to clarify rules governing private-public development partnerships.
The issue is important because hundreds of counties and municipalities across the state employ private economic development groups to attract industry, coordinate development, and, as in Beaver Dam’s case, negotiate on the local government’s behalf.
Case history
Then-Attorney General Peg Lautenschlager sued the city in 2004, saying the corporation was a quasi-governmental body subject to state open records and meetings laws because its offices were in city hall, the city was its only client, and elected officials sat on its board of directors.
In March 2006, a circuit court judge ruled against the state, saying the development group was not created by city ordinance, does not make decisions on behalf of the city, and operated independently from the city and was therefore not subject to those laws.
The state appealed.
In its July 11 ruling, the court said factors that can be used to determine whether a private corporation is subject to the records and meetings laws are its source of financing; whether it serves a public function; whether it is subject to government control; and whether the public thinks it’s a government entity.
Criteria may be vague
Lueders agreed that the justices failed to define the exact legal boundaries for economic development groups.
“Basically, it says if it looks like a duck and walks like a duck, it’s probably a duck. It didn’t precisely define what a duck is, however, so there’s always a chance someone will look at the duck and say it’s a goose,” Lueders said.
Hough said, however, that the two criteria that the court should have looked at and that should be addressed in any new legislation are: “Does the local government control the economic development corporation, or does the corporation have the authority to bind government?”
Hough and others said it’s possible the court’s ruling could have a chilling effect on Wisconsin development
Some confidentiality
“Very clearly there needs to be a measure of transparency when government funds are being allocated for economic development,” said Jim Paetsch, director of corporate expansion and relocation for The Milwaukee 7, a consortium of private investors and local governments in the Milwaukee metro area.
“But if we can’t hold confidential what a corporation’s plans are (regarding future development), we’re dead in the water. No way you can compete in that arena if you’re a leaky ship,” he said.
Lueders said it’s best for groups to err on the side of openness.
“If people are in doubt, they should conduct themselves with the maximum degree of openness,” he said. “Doing so will breed trust and support for what they are doing.”
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