Cape, Drury settle lawsuits

An agreement that ends more than five years of lawsuits over the River Campus became a reality Wednesday night.

The Cape Girardeau City Council and motel and restaurant owner Jim Drury announced the agreement following a closed-door special meeting at city hall. The pact culminated nearly two years of discussions between Mayor Jay Knudtson and Drury.

At a news conference after the council meeting, Drury and city officials said they put aside their differences in an effort to unite the community and pave the way for future economic development.

Drury and Knudtson praised the settlement and the end of the controversy.

"I am just so glad to have this behind us," Drury said.

Under the agreement, Drury will drop his legal battle against the city.

In return, the city agreed to:

Terminate the city's motel and restaurant sales taxes once the cash reserves from the taxes are sufficient to pay off bonds for the city's share of funding for Southeast Missouri State University's River Campus. Knudtson said that could be as early as June 2015.

The university, which broke ground on the River Campus project last May, is building an arts campus on the grounds of a former Catholic seminary overlooking the Mississippi River next to the new Bill Emerson Memorial Bridge.

Cap the city's spending of motel and restaurant sales tax revenue for the River Campus project at a maximum of $16 million to pay off $8.9 million in bonds plus interest. University officials believe the city's share of bonds will be retired for less than $16 million.

Limit the growth of the Convention and Visitors Bureau budget.

Require the CVB to meet measurable goals as reflected by increases in motel and restaurant sales tax receipts.

Conduct random audits to make sure that businesses are properly collecting the city's motel and restaurant sales taxes.

Require the university to use local contractors, where feasible and applicable under state law, in the construction of the River Campus.

Knudtson said Drury is right to require better accountability of CVB operations. The CVB currently operates on a $440,000 annual budget with funding from the motel and restaurant sales taxes.

Under the agreement, the CVB's budget can't exceed 3 percent growth unless the motel and restaurant sales tax revenue grows by at least 7 percent over a 12-month period.

The Cape Girardeau Chamber of Commerce operates the CVB under a contract with the city. Knudtson said the chamber's management of the CVB has improved its accountability. Until last year, the CVB was operated as a municipal department.

Drury said the agreement announced Wednesday night is a victory for taxpayers. "I think we have restored integrity back into city hall," he said.

In November 1998 Cape Girardeau voters approved a measure raising the motel sales tax to 4 percent from 3 percent and extending that tax and the 1 percent restaurant tax through 2030. A companion bond issue to fund the city's share of the River Campus project failed to win the super-majority needed for passage.

The university and the city later decided to seek the issuance of bonds through a state board, which didn't require voter approval, and use the motel and restaurant sales tax revenue to retire those state-issued bonds. Drury said that plan bypassed the will of the voters. He filed two lawsuits that resulted in decisions in the city's favor. The bonds were issued earlier this year.

Drury said Wednesday that his view hasn't changed. But he said he decided to drop his latest lawsuit and an appeal of one of the earlier lawsuits to help move the community forward.

With Wednesday's agreement to end the motel and restaurant sales taxes once there is enough revenue to fund the city's portion of the River Campus funding, Knudtson said city officials would have to ask voters to extend the taxes in order to continue funding for the CVB or other community projects.

If the CVB boosts tourism and economic development, he said, the city should be able to convince voters to extend the taxes.

Bob Hahn, vice president of development for Drury's Midamerica Hotels Corp., said a future election could result in a list of projects that could be funded with the motel and restaurant sales tax revenue, as was the case with construction of the Osage Community Centre, walking trails and the Shawnee Park soccer fields.

Hahn said the agreement assures voters will have the opportunity to decide how any future motel and restaurant sales tax dollars would be spent.

Don Dickerson, president of the university's board of regents, praised the settlement. "I think it will be a great thing to get that issue behind us and move on."

Dickerson said the university uses local contractors on construction projects where possible and will make every effort to do so on the $36 million River Campus project.

The state is paying half the cost of the River Campus. The other half is coming from the city and private donations raised by the university.

mbliss@semissourian.com

335-6611, extension 123