Supreme Court, Erie County, January 3, 2018

Dolce Panepinto, Buffalo (Sean E. Cooney of counsel), for petitioner.

Hodgson Russ LLP, Buffalo (Benjamin M. Zuffranieri, Jr., Terrence M. Gilbride and Charles W. Malcomb of counsel), for respondent.

Petitioner requested records from respondent on January 27, 2017, and again on February 24, 2017, pursuant to the New York Freedom of Information Law (FOIL). Respondent UBF Faculty-Student Housing Corp. (hereinafter Housing Corp.) denied both requests by letter dated March 6, 2017, on the basis that it is not subject to FOIL and the New York Open Meetings Law (OML). Petitioner seeks an order of this court declaring respondent to be subject to FOIL and OML and directing respondent to comply with the statutes and petitioner's requests.

Respondent opposes the petition on the theory that issue has been litigated and determined that respondent is not subject to FOIL and OML and that the legislature has failed to amend the statutes to include respondent and similar entities that would deem them an agency and subject to FOIL and OML.

The parties recognize, and this court takes judicial notice, that similar FOIL requests were made to the University of Buffalo Foundation, the UB Foundation Activities, Inc., and the UB Foundation Services in or about 2010. By decision and judgment granted March 2, 2011, the Honorable Patrick H. NeMoyer dismissed a similar petition in which he analyzed factors and determined that those entities were not governmental agencies that would be subject to FOIL and OML. (Quigley v University at Buffalo Found., Inc., Sup Ct, Eric County, index No. 12370/2010.){**63 Misc 3d at 302}

Respondent claims that although the Housing Corp. was not included in the Quigley action, Judge NeMoyer's decision is the law of this case because the Housing Corp. shares the same relevant characteristics as the other Foundation affiliates. They are all governed by a board of directors that is controlled by private individuals; their funding is private, they are not controlled by any public entity, and they do not receive or administer public funds.

Petitioner claims that this FOIL request is a different matter than Quigley. An initial argument is that the Housing Corp. was not a respondent in that FOIL claim. More importantly, petitioner claims that the Housing Corp.'s revenues and expenditures consist entirely of public funds, and it receives no private funds or grants as the affiliates in Quigley did. Additionally, the Housing Corp. financed the construction of the residence halls through governmental corporations claiming that such financing is with the use of public funds.

Respondent explains that in the 1990s the State University of New York (SUNY) campuses were having challenges in obtaining funding for new student housing, so it was created in 1990 by the University at Buffalo Foundation (UBF). Petitioner indicates that respondent's purpose contained in its certificate of incorporation is to support the purposes of University at Buffalo (UB) by acquiring, constructing, renovating, and maintaining residential and other facilities for the use of the faculty and students of UB and to undertake other activities and services in support of UBF, UB, or divisions or other entities owned or controlled by UBF or UB.

UBF constructed a student housing project on vacant land owned by UBF and developed through the Housing Corp. and financed with tax-exempt private activity bonds issued by the Village of Kenmore Housing Authority. This project is known as Flickinger Court, and later projects included the Hadley Village, Greiner Hall, and others, some of which were financed through the Town of Amherst Development Corporation.

Public Funds

Petitioner argues primarily that this action for a declaration that the Housing Corp. must be subject to FOIL and OML is different from the Foundation and its affiliates in the Quigley decision because UB receives money from students for rent at facilities owned by the Housing Corp. and transfers it to the Housing Corp., which, in turn, uses it to pay government-issued tax-exempt bonds. Petitioner argues that the money it receives to pay for rent becomes public funds.{**63 Misc 3d at 303}

Petitioner cites the Court of Appeals case of Matter of Smith v City Univ. of N.Y. (92 NY2d 707 [1999]). Smith involved an association at LaGuardia Community College, a division of City University of New York which consisted of faculty, students, and administrators. The association was funded by a mandatory student activity fee and conducted a closed meeting for which an editor of the student paper was not allowed to attend which eventually resulted in a CPLR article 78 petition. The Court of Appeals found that association acted in a quintessentially governmental function and that the student fees were "garnered by the State and dedicated to support student expressive activities in a public university" (id. at 716). The Court stated that the funds had the "inescapable earmarks of public funds" as they were "dedicated to support student expressive activities in a public university" (id.).

[1] Petitioner relies on the Smith holding for the assertion that rents paid by students with their private dollars for housing costs in apartments owned by respondent but collected by state-owned UB become public funds. However, in Smith, the fee collected was mandatory in order for a student to attend the college and the fees were used for a variety of campus activities. The analysis for the Smith fee is that the mandatory fee imposed by a government-owned institution of higher learning—similar to a tax—becomes public funds. However, as respondent points out, there is no requirement that a UB student live on campus or in an apartment owned by respondent. A student could live at home, at an off-campus apartment, or in an older, traditional dormitory.

Although it appears to be true that UB collects the rents for students to live in respondent's housing, UB then transmits the money to respondent and does not use the money for educational purposes or student activities. UB is essentially acting as a third-party administrator to collect rents for respondent.

In an action involving a municipal government, the Appellate Division explained that "public funds" are defined as the "funds of a local government" and that General Municipal Law § 10 (1) (a) defines local government as "any municipal corporation, school district, board of cooperative educational services, district corporation, special improvement district governed by a separate board of commissioners, industrial development agency or authority or a public library." (Gessin v Throne-Holst, 134 AD3d 31, 41-42 [2d Dept 2015].){**63 Misc 3d at 304}

Although that definition is for local governments, it provides guidance to the various types of governmental bodies that would be subject to FOIL and OML, and it does not appear that respondent Housing Corp. is akin to those that are defined.

Governmental Nexus

Petitioner next claims that a private entity with a close governmental nexus should be subject to FOIL and OML as the Court found in Matter of Buffalo News v Buffalo Enter. Dev. Corp. (84 NY2d 488 [1994]). The respondent in Buffalo News was a private [*4]not-for-profit corporation whose activities were to attract investment and stimulate growth in downtown Buffalo by administering loan programs with the goal of attracting manufacturing companies and otherwise channeling public funds into the community.

Here, petitioner cites examples of activities to include cross marketing of the apartments by UB; entering into a facilities management agreement with UB; and UB's determining the fee to reside in respondent's facilities.

[2] The court finds that these tasks do not rise to the level of governmental activities that were being conducted by the respondent in Buffalo News. In the instant matter, the Housing Corp. developed the housing and paid the bonds that financed it.

Housing Financing

Petitioner claims that the money that the Housing Corp. receives is used to satisfy public bonds and claims that it is another piece of the scheme which involves public funds and as such, it should be deemed an agency and subject to FOIL and OML. Indeed the Housing Corp. did receive financing through what appears to be municipal entities—the Village of Kenmore Housing Authority and the Town of Amherst Development Corporation.

Respondent submitted an affidavit of David S. Mingoia, who is the Chief Executive and Financial Officer of the Town of Amherst Development Corporation. He explains that this corporation is a "special type" of a not-for-profit corporation, and it has the power to issue bonds for some development projects. These bonds are tax exempt and allow borrowing at a lower interest rate but bondholders are not required to pay income tax on the revenues.

[1] Mr. Mingoia describes the Development Corporation's role as one of a conduit between the borrowers and prospective{**63 Misc 3d at 305} bondholders. It is not a governmental lender of tax-exempt bond proceeds because the lenders are purchasers of the bonds, which often includes pensions and mutual funds. The Mingoia affidavit is persuasive in finding that the residential buildings were not financed with public funds.

Legislative History

During oral argument, respondent's counsel submitted copies of New York legislative information which contained a proposed amendment (dated May 17, 2011) to the Public Officers Law, specifically the section that defines agency, which, if passed, would have included SUNY Foundations and their affiliates. This was again introduced on May 23, 2013. The legislation was not enacted.

In addition, petitioner has not cited any Appellate Division decision which deems that a foundation (or its affiliates) of a state-owned college or university be subject to FOIL and OML. The Quigley decision that involved a similar article 78 action with other UB Foundation affiliates analyzed the relevant factors and determined that they were not subject to FOIL and OML. This decision was not appealed. Respondent included other decisions from different trial courts across the state which dismissed similar petitions involving foundations.

There is a Second Department decision which reversed a dismissal of an article 78 petition relating to a foundation because the Court found that the foundation failed to provide documentary evidence to refute the allegations. (Matter of Nassau Community Coll. Fedn. of Teachers, Local 3150 v Nassau Community Coll., 127 AD3d 865 [2d Dept 2015].) In the case at a bar, respondent has provided a lease and sublease, an installment sales agreement, facilities management agreement, the Foundation's guidelines, and a bond between Town of Amherst [*5]Development Corporation and respondent to show that the money involved is not public funds and the agreements between the Housing Corp. were made as arm's length transactions.

Although the respondent at issue may have a different purpose than the other affiliates, the court agrees that the Housing Corp. has the same legal and operational structure. Therefore, the petition is dismissed.