Cape, SEMO officials ready to move ahead with project

Thursday, February 14, 2002

A Missouri Supreme Court ruling Wednesday on the River Campus project could get the art school project rolling again, say Cape Girardeau and Southeast Missouri State University officials.

While elated, they admit they're not ready to start construction and renovations just yet to turn a former Catholic seminary into a visual and performing arts school.

The $36 million project still must contend with a yet undecided lawsuit filed by Cape Girardeau businessman Jim Drury last month. Drury filed the first lawsuit against the River Campus in 1999.

Nevertheless, university officials are ready to move ahead with the project, armed with a Supreme Court ruling that allows the city to use motel and restaurant tax money to help fund the River Campus development. The ruling Wednesday reverses lower court rulings that had sided with Drury, whose 3-year-old lawsuit challenged the validity of the taxes.

The ruling has no impact on the pocketbooks of area residents, who have been paying a restaurant tax for years.

Local residents aren't paying the 4 percent motel tax unless they spend a night in a motel room. The city has been collecting the extra tax revenue for the River Campus since January 1999.

More likely, contributions to the project would come through the 1 percent restaurant tax that is collected every time residents eat out.

A person who spends $2,000 a year eating out would pay a restaurant tax of $20. In the coming years, most of that restaurant tax money would go to retire River Campus bonds, officials say.

However, if the court had ruled in Drury's favor, it could have led to the elimination of the hotel and restaurant tax.

Mayor Al Spradling III said the City Council first must decide if the university has met its financial obligations before committing any motel and restaurant tax dollars to the project. The council in December extended the city funding deadline two years to give the university time to get its funding in place.

Meanwhile, Drury's attorney, Walter S. Drusch, said his client may seek an injunction to block any financing of the project until a second lawsuit, filed by Drury last month, is concluded.

Drusch said he was surprised and disappointed by the ruling from the state's highest court in the first lawsuit.

Dr. Ken Dobbins, Southeast president, said Wednesday's ruling frees up the use of $4.6 million in state money, part of the $16.5 million that the state has appropriated for the project.

Even with state budget cuts, Dobbins said Southeast could start getting state reimbursement for River Campus expenses as the project proceeds provided that the university and city money are in place.

City tax dollars and private money raised by the university would pay half the cost with the state shouldering the other half. State money only would be issued on a reimbursement basis as expenses occurred.

Dobbins said the university isn't ready to construct the River Campus yet. "It is going to take a year to plan it," he said.

The university plans to ask the Missouri Development Finance Board to issue bonds for the city's share of the project. The bonds would be paid off with motel and restaurant tax money.

The project has been on the drawing board for nearly four years during which time it has been plagued with legal and financial problems.

Drury filed a second lawsuit last month, contending that the Cape Girardeau City Council ignored a Dec. 31, 2001, self-imposed funding deadline and extended an agreement with Southeast that violates the state's Hancock Amendment.

Drury argues that the council's two-year extension amounts to extending the motel and restaurant taxes without voter approval. That case is currently pending in Cape Girardeau County Circuit Court.

University and city officials give little credence to the latest lawsuit. On Wednesday, they said they were just glad to put the first legal hurdle behind them.

Don Dickerson, president of the Board of Regents, said the ruling upholds the results of the November 1998 election in which city voters agreed to raise the motel tax and extend both the motel and restaurant taxes from 2004 to 2030 to pay for the city's $8.9 million share of the River Campus project.

Voters weren't confused, said Dickerson, who is vacationing in Florida. "I don't think anyone was misled by what this was all about," he said.

Dobbins agreed. "The people did vote for the tax and that is what the Supreme Court said. The tax is valid."

But Drury disagreed, noting that voters approved the motel and restaurant tax issue but not the companion measure that would have allowed the city to issue bonds.

"It's not right. It's not fair," he said of the Supreme Court's ruling.

He said city and university officials are wrong to proceed with the project. "They are trying to screw taxpayers into paying for something they didn't want," Drury said.

He said he would continue to push his second lawsuit in an effort to prevent the project from moving forward without another election.

mbliss@semissourian.com

335-6611, extension 123

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