May 14, 1976
Mr. Leo P. Flynn
State's Attorney
Grant County Courthouse
Milbank, South Dakota 57252
OFFICIAL OPINION NO. 76-54
Leasing of municipal land for use by private citizens to set up vending stands
Dear Mr. Flynn:
We are in receipt of your letter dated April 13, 1976, in which you ask the following questions:
(1) Maya municipality through its park board lease, with or without consideration, sufficient city park land to private individuals to maintain vending stands or structures, for private pecuniary gain, to service users of the city park, including a municipal swimming pool located on city park land?
(2) In the event the answer to the above question is yes, may the municipality grant an exclusive lease for a vending business operation to one private individual or group of individuals working together to the exclusion of other private applicants?
Your first question involves several considerations. First, does the board have leasing authority? Second, for what purposes may park property be leased? Third, to whom and on what terms may a lease be negotiated? All of the above issues have been discussed in opinions found at 1965-66 AGR 277 and 318.
As is indicated therein, the general authority to lease is found at SDCL 9-12-1(6). However, this general grant of power is modified and limited by the more specific provisions of Title 9 as well as case law. SDCL 9-38-33 specifically requires that all property obtained under SDCL 9-38 shall be used solely for parks, boulevards, etc. Thus, such real property has been declared as dedicated to the public use. Consistent therewith is SDCL 9-38-35 which provides:
Neither the governing body nor the board shall have authority to permit any person to build or maintain any structure within any park or parkway under the control of the board, nor shall any structure be erected or maintained within any park or parkway except such structures or buildings as may be erected by the board for park purposes, and such statues, monuments, works of art, or structures intended for ornamentation only as may be erected by authority of the board.
In addition, SDCL 9-38-60 authorizes a municipality to construct and maintain swimming pools and necessary buildings in connection therewith.
It is my opinion that the determination of whether vending stands or structures fall within the purview of "park purposes" is to be made by the appropriate governing body. Concession stands are certainly directly related and incident to the total spectrum of operation of a park system. In 1965-66 AGR 277, my predecessor held that a clubhouse could be constructed by a private party on a municipal golf course. Presumably, it could be contemplated that the clubhouse would contain a concession area. However, the crucial question is whether a municipality may lease park property to a private party for pecuniary gain.
Although there is case law advancing the theory that property dedicated and actually being used for public purposes cannot be leased to a private party for profit or otherwise, it is my opinion that the hereinbefore cited statutes grant the governing body discretionary authority in this regard. I am in agreement with the New York Superior Court in Gushee v. New York, 58 N.Y.S. 967, wherein they authorized leasing of part of a park facility for operation of a restaurant:
. . . The city was perfectly within its authority, in the control and management of its parks, to furnish not only such innocent amusements as might enhance the pleasure of those who resort to the parks, but such opportunities for rest and refreshment for themselves and their animals as might be required.
If the governing body has determined that vending stands are a legitimate park purpose, and has further determined that a leasing thereof to private parties is the feasible method of providing this service, such a lease may be negotiated. Recent court decisions in other states indicate a trend away from the very strict interpretation of statutes regarding leasing powers of municipalities. As is stated in Angel v. Newport, 288 A.2d 498, if a lease agreement is not patently inconsistent with the terms of dedication, the court should consider if the proposed use in the lease intensifies the intended public purpose.
The answer to your second question is also YES. The municipality has discretionary authority pursuant to SDCL 9-12-1(6) to lease property on such reasonable terms and conditions as they deem appropriate. (See also 1965 AGR 277 for further discussion of this matter.)
Respectfully submitted,
WILLIAM J. JANKLOW
ATTORNEY GENERAL
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