Cape council faces decision to move on River Campus

A decision could be made tonight that would finally get the wheels turning on the proposed River Campus, a project that has been tied up in litigation since April 1999.

The Cape Girardeau City Council could pass an ordinance at today's 7 p.m. meeting that would declare that the state and Southeast Missouri State University "have committed funds in an amount sufficient to complete the acquisition, construction, furnishing and equipping of the joint facilities."

Tonight's decision "represents the culmination of four years of litigation with Mr. Jim Drury and the city; and four years of negotiations with the city and university," said Mayor Jay Knudtson.

The finding to be made tonight is a requirement of a cooperative agreement made by the city and the university to collaborate on the funding of the $35.6 million project that would turn the Old St. Vincent's Seminary building on Morgan Oak into a performing arts center. The project also includes the building of a regional museum.

The university will officially propose a financing plan to the council tonight, but it is likely the council has already gone over the information in closed session for litigation purposes.

"The city council is requiring that all the funds are in place and that usually doesn't happen that all funds are here at one place at one time," said Dr. Kenneth Dobbins, Southeast president. "We had to come up with a way to satisfy that and I think we came up with a financial structure that will satisfy the requirements of the ordinance."

The financing plan consists of two separate bond issues by the university through the Missouri Development Finance Board.

The city's share of the project, $8.9 million, will be called Series A bonds. Those bonds will be paid between 15 and 20 years with a hotel/motel tax, Dobbins said. The city will make an annual payment to the university, which, in turn, will pay off the bonds.

The rest of the $22.7 million in bonds would be paid from $16.55 million in state appropriations and donations not yet raised by the university's foundation.

$10.15 million guaranteed

The foundation has to come up with $10.15 million for the project. Dobbins said about $7 million in cash has been raised so far, meaning roughly $3 million is left to raise. The $3 million, which could go down by the time the bonds are actually issued, would be bonded.

On Saturday, the foundation and the Board of Regents said it would guarantee that the full $10.15 million will be available when it is needed.

Dobbins said the attorneys representing the university and the city went to great lengths to make sure the financial plan met every requirement of the proposed ordinance.

Council members were hesitant to talk about the issue given the legal tightrope that goes along with the project. But one council member, who did not wish to be identified, said the council will likely approve the ordinance.

But that may mean another lawsuit.

In 1998, voters approved funding construction of the River Campus by increasing the hotel-motel tax from 3 to 4 percent and extending the tax's life through 2030. However, in the same election, a bond issue to fund the River Campus did not get the required 57.2 percent.

Attempts to reach Jim Drury at his home Friday night and Sunday afternoon failed, but he has mentioned the possibility of filing another suit once the university issues bonds.

Drury, the owner of mid-America Hotels Corp., is one of the most prominent businessmen in the city.

His attorney, Walter S. Drusch, has argued that the city, by paying off the university bonds after a city bond issue was voted down, sidestepped the will of the voters. The Missouri Supreme Court concluded the issue couldn't be subject to a legal challenge until the city incurred debt.

Council members, including Mayor Jay Knudtson, said a lawsuit threat will not influence their decision. Knudtson has said he has met with Drury privately on several occasions trying to reach a compromise.

"There's always a possibility that Mr. Drury will do what he has to do," Knudtson said. "But we have to value the project on the merits of the effects it will have on the citizens of Cape Girardeau. We can't base any decisions on what Mr. Drury will or will not do."

bmiller@semissourian.com

335-6611, extension 127