Drury files third River Campus suit

Wednesday, March 5, 2003

Business owner Jim Drury filed another lawsuit against the River Campus project on Tuesday, prompting frustrated city officials to say they may countersue for damages.

The latest suit also threatens funding of the Cape Girardeau Convention and Visitors Bureau. City officials, tired of repeated legal battles, reacted bitterly to the Drury suit. Mayor Jay Knudtson called Drury's actions "childish."

The lawsuit, Drury's third against the city since April 1999, seeks a declaratory judgment once again to block the city from spending tax dollars to help fund Southeast Missouri State University's proposed arts school, performance hall and regional museum.

The suit, filed in circuit court in Cape Girardeau, also alleges that the city under state law can't fund the Convention and Visitors Bureau with motel and restaurant tax money because a ballot measure approved by voters in 1998 didn't specify that any of the money would go to the CVB.

City and university officials voiced dismay at the latest lawsuit.

"I feel we have reached a new depth in the way of frivolous lawsuits," Knudtson said. "Our only form of attack may be to countersue."

The mayor said he had numerous meetings with Drury in an effort to resolve the River Campus dispute.

Dr. Ken Dobbins, university president, said Drury's lawsuit is "unfortunate."

Walter S. Drusch, Drury's attorney, filed the lawsuit, which alleges:

The city council illegally has committed to paying off River Campus bonds with motel and restaurant tax dollars even though voters never approved a bond issue.

City ordinances are confusing because they state the tax money would be used to pay off the bonds while at the same time providing that the city isn't obligated to do so.

If the city isn't obligated to pay off any bonds that might be issued, then there is no debt and the city should not make any payments.

The city should quit spending motel and restaurant tax money to fund the Convention and Visitors Bureau because such use wasn't spelled out on the 1998 ballot.

Besides the city, the suit names Missouri Attorney General Jay Nixon as a defendant. Drusch said Nixon was named because the lawsuit questions the legality of municipal ordinances.

River Campus design

The lawsuit comes just over six months after a circuit judge dismissed Drury's second lawsuit that accused the city of entering into an agreement with the university on the River Campus project in violation of the state's Hancock Amendment, which requires most tax increases to go to a public vote.

The latest lawsuit was filed on the same day that the university's board of regents in a private telephone conference call authorized the start of a $650,000 to $700,000 design phase for the $36 million River Campus project.

The regents voted to go forward with design work, construction plans for the Fountain Street extension and related storm-water work, as well as archaeological work needed to proceed with the project on the grounds of the former Catholic seminary overlooking the Mississippi River.

Drusch said late Tuesday afternoon that the timing of the lawsuit had nothing to do with the regents' actions. He said he wasn't aware of the university's actions when he filed the lawsuit.

Drusch said Drury views the River Campus as a state and university project, not a city project.

"It is fine with us if the university proceeds with the project and completes it," Drusch said.

Drusch said the city would pay $19 million in motel and restaurant tax dollars to retire $8.9 million in bonds over the next 20 years if the city-university agreement proceeds.

"Mr. Drury thinks that the city council is using awfully poor judgment to try to pass four new taxes on the city taxpayers and meanwhile devote $19 million to a project the city doesn't even own," Drusch said.

The lawyer was referring to the four tax issues on the April ballot: A quarter-cent sales tax for the fire department, a local use tax on goods or materials purchased from out-of-state companies via catalogs and the Internet, extension of a 10-cent property tax and a storm water utility fee.

Drusch said Drury, a motel and restaurant operator, isn't trying to shut down the Convention and Visitors Bureau. "They can think of some other way to fund it," Drusch said.

The lawsuit accuses the city council of illegally agreeing to retire $8.9 million in bonds -- the city's share of the River Campus project. The university plans to ask a state development board to issue the bonds.

Voters in 1998 approved spending motel and restaurant tax money on the project, but a companion city bond issue that would have been retired with the tax dollars failed to gain the four-sevenths majority needed for passage.

The suit also accuses city officials of entering into an agreement with the university that states that the city isn't obligated to retire any River Campus bonds.

Drusch said city officials can't have it both ways. They can't incur a debt and deny the debt at the same time. If there is no debt, then no city tax dollars should be spent to pay off the bonds, he said.

The suit says an ordinance approved by the city council in December that commits the city to move ahead with its funding of the project is "confusing" and "unenforceable." That allegation once again centers around the debt issue.

Knudtson said he and other city officials haven't reviewed the lawsuit. But he said that both the city and the university need to move ahead with the River Campus project.

mbliss@semissourian.com

335-6611, extension 123

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