Property Owners Association of Los Angeles Business District Subject to Brown Act

In Epstein v. Hollywood Entertainment District, 2000 Cal. App. LEXIS 916, the California Court of Appeal determined that the property owners association for a business improvement district is subject to the Ralph M. Brown Act. (Gov. Code §§ 54950 et seq.)

Pursuant to the Property and Business Improvement District Law of 1994 (Sts. & Hy. Code §§ 36600 et seq.), the City of Los Angeles (“City”) created the Hollywood Entertainment Business Improvement District (“District”) in September 1996. The ordinance creating the District provided for governance of the District by a non-profit association. Thereafter, the City created the Hollywood Property Owners Association (“Association”), a non-profit association, to govern the District. In August 1998, the City created the Hollywood Entertainment District II Business Improvement District, which was merely an extension of the first District and was also to be governed by the Association.

Because the Association’s meetings were not open to the public, Epstein, a property owner in the District, filed suit seeking a declaration that the Brown Act applies to the Association. The trial court and the Court of Appeal agreed.

The California Legislature passed the Brown Act to ensure the public’s right to attend the meetings of public agencies. The Brown Act applies to legislative bodies of local agencies, including city councils. A “legislative body” is defined to also include, “a board, commission, committee, or other multimember body that governs a private corporation or entity that . . . is created by the elected legislative body in order to exercise authority which may lawfully be delegated by the elected governing body to a private corporation or entity.” (Brown Act, Gov. Code § 54952(c)(1)(A)).

Based on the definition of “legislative body,” the Court of Appeal was faced with the question of whether the City Council, an elected legislative body, “created” the Association to exercise authority that could lawfully be delegated. The Court found that the Association was created by the City Council because it “played a role in bringing” the Association “into existence.” The ordinance adopted by the City Council specifically provided that the District would be governed by a non-profit association and even described the management and operation of the non-profit association. The City Council also directed that the Association would govern the extension of the original District. Additionally, the Court found that the Association was formed to exercise authority that the City could lawfully delegate – the management of the District.

Therefore, the Court of Appeal determined that the Association is a “legislative body” subject to the Brown Act.

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