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George H. Austin, Executive Director Investment Board
GEORGE H. AUSTIN, Executive Director Investment Board
You have asked whether the State of Wisconsin Investment Board has the authority to disburse funds to a private membership association to finance street improvements which may or may not directly benefit property owned by the board. Mitchell Street Improvement Association is implementing the improvements on a portion of Mitchell Street in the City of Milwaukee where the board owns property. These improvements, mini-malls, landscaping, widened sidewalks, etc., are to be financed one-half by the City of Milwaukee and one-half by property owners in the area who contribute voluntarily.
The answer depends upon whether the improvement will directly benefit the board's property. *Page 86
As an administrative agency of the State of Wisconsin, the board has only those powers expressly granted or reasonably implied in the statutes under which it proceeds. State ex rel.Farrell v. Schubert (1971), 52 Wis.2d 351, 190 N.W.2d 529. Sections 25.14 through 25.18, Stats., dealing with the management of trust funds, focus on the board's powers and duties to make investments. It appears from these statutory provisions that the authorized management activities of the board must bear a direct relationship to the making of investments, or to the preservation and protection of investments already made. The subject disbursement is not related to either of these functions if benefits which might accrue to the board's property as a result of civic improvements by the private association are too remote and uncertain to be characterized as measures protective of the real estate investment. Rather, such a disbursement would be, in effect, a charitable contribution, and as such, beyond the implied powers of the board.
On the other hand, it is stated in sec. 25.17 (8), Stats., that the board shall:
". . . manage, operate, lease, exchange, sell and convey . . . any real property acquired by said board . . . ."
A manager is defined in Webster's Seventh New CollegiateDictionary, p. 513, as one who "conducts business or household affairs with economy and care." Real estate management specifically has been defined broadly as "the entire responsibility for directing, supervising, overseeing, administering, and controlling the property . . ." In reBrennan's Will (1929), 251 N.Y. 39, 166 N.E. 797.
At the least the term "manage" implies activity that goes beyond the mere maintenance or upkeep of real property. In my opinion, it includes the power to take whatever actions seem best suited to preserving the property or enhancing its value. Disbursing funds to a private association for street improvements which will increase the value of investment property is a proper action for a prudent manager to take
In sum, the board must determine initially whether the disbursement of funds will be of direct benefit to property which it owns. If the determination is affirmative, then the board may *Page 87 authorize such disbursement in its character as manager of the property.
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