Scranton council solicitor: Park lease appears to violate ethics code

Aug. 20--SCRANTON -- A city official's leasing of a building at Nay Aug Park for a coffee shop appears to violate the city's ethics code, city council's solicitor said.

But this leads to a question of whether the less-restrictive state ethics law trumps the city's ethics rules, said council solicitor Amil Minora, stressing that he did not look at answering that question.An article in

The Times-Tribune on Aug. 7 reported on the Scranton Municipal Recreation Authority's lease last year of a former restroom building at Nay Aug Park to city Licensing, Inspections and Permits Director Patrick Hinton, who plans to renovate the space into a coffee shop.

Councilman Bill Gaughan then asked the council solicitor to review whether Hinton's lease violated the city ethics code, including these sections:

Conflict of interest: A city employee shall not participate in negotiation or administration of any contract in which the employee has a financial or other interest.

Disclosure: An employee with any private financial interest in any business or transaction pending before any municipal authority or agency shall disclose such private interest to city council.

Use of public property: An employee shall not use any public property for personal benefit or profit.

Minora gave his legal opinion Aug. 13, saying it appears that the lease violated the city ethics code. He noted he is not commenting on whether he believes the state ethics law overrules the city code, but rather is saying that a question of state "pre-emption" of the city rules exists.

"On the face of our code of ethics there are violations, and there are pre-emption problems," Minora said in a phone interview. "Whether our code of ethics is what we're governed by is another story." In other words, if state law pre-empts the city code, the matter essentially is moot.

The state Ethics Act says it's the baseline of ethics rules and any governmental body may adopt additional requirements. But if there are conflicts between the state code and any other statute, ordinance, regulation or rule, the state Ethics Act is the controlling law.

Efforts to contact Hinton were unsuccessful.

Citing Hinton's lease as a personnel matter, Mayor Bill Courtright declined to comment on Minora's opinion or about whether the mayor knew about the lease beforehand.

"It's a personnel issue. I'll have to discuss it with our solicitor, so I can't comment," Courtright said in a phone interview.

After Gaughan raised the issue of ethics, Hinton amended his Statement of Financial Interests for 2017 to disclose the lease. Initially, Hinton checked a box on the ethics form saying he did not have any financial interest in any business. He had called it a minor omission, saying he didn't disclose the lease because the shop is not open.

The state ethics law forbids public officials or employees from entering into contracts with associated governmental entities, "unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded."

The authority followed an open public process regarding leasing the building to Hinton.

LIP director since 2014, Hinton previously said he asked the recreation board in 2014 or 2015 to consider his coffee shop idea. In July 2016, the authority issued a public notice in The Times-Tribune formally requesting proposals for renovation and use of the building. Only Hinton submitted a proposal.

A 12-year lease executed in July 2017 gave Hinton two years to open the coffee shop. He gets those two years rent-free because the approximately 700-square-foot building isn't open, but then he must pay annual rent of $3,000, in quarterly installments of $750. The lease between the authority and Hinton's firm, Black Watch Cafe LLC, runs from mid-2017 to mid-2029.

Gaughan on Aug. 13 also submitted via council a letter to Hinton asking numerous questions. Gaughan on Friday said he did not get a reply.

Hinton's coffee shop proposal to the recreation authority, provided to the newspaper by authority solicitor Timothy Corbett, pitched the idea as a unique use both for building and park. Hinton would transform the vacant stone structure into a fashionable gourmet cafe geared toward "healthy-minded foodies," and at no cost to the city.

"The building's location is ideal for a serene and peaceful escape," the proposal said. "Unlike other coffee shops, this cafe will embrace the park atmosphere and will be an exciting addition to not only the park and its visitors, but to the greenhouse, hospital and local colleges."

The former restroom building is in the southern part of Nay Aug Park, off Arthur Avenue near the greenhouse and across from Geisinger Community Medical Center.

The yearly rent figure of $3,000 came from Hinton, Corbett said in an email.

"I can't speak to the board members' evaluation of the market, but I know that the amount of money Mr. Hinton was planning to invest in the property was a consideration when evaluating the rent amount," Corbett said. "From the perspective of the authority, I think the focus was mainly on taking a building that was falling further into disrepair and making it an amenity for the park at no cost to the authority."

Corbett also provided to the newspaper minutes of authority meetings. Minutes from the June 2016 meeting say Hinton submitted his written proposal that night and that his initial investment would be more than $20,000. The proposal was later discussed at several other meetings.

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