Riddle Me This

A dilemma for your consideration:

A pastor of a church is elected to serve on a committee vested with recommending to local housing authority how best to spend federal money earmarked to address neighborhood development needs. During the process of identifying and evaluating neighborhood needs, the pastor tells the other committee members that his church has acquired land right next to their building. He recommends that the committee advise the housing authority to buy this parcel of land from the church in order to put in a playground for the children on the street where the church sits. (A playground already exists in a public park in the same neighborhood, three blocks from the church. The pastor is concerned that children on his street must cross busy streets to get to the public park). The pastor says that the neighborhood association that he and several others in his church membership belong to will oversee maintenance, upkeep, and security of the private playground and park once installed. When another committee member asks the pastor what agency would take over management of the park if the neighborhood association ceased to exist, the pastor replied that the church would.

Does this request constitute a conflict of interest? Is it appropriate for the committee to advise the housing authority to spend federal money to buy land from a church and hand it over to a neighborhood group whose membership reflects the membership of the church with the possibility that the church might one day re-assume ownership of the land should the neighborhood association cease to exist?