GOVERNMENT: CITY OFFICIALS RELY ON APPEAL TO MOVE RIVER CAMPUS PROJECT FORWARD

Cape Girardeau city officials say they won't turn to the voters to get the River Campus project out of its legal chains and move the project forward.

A lawsuit by Cape Girard-eau businessman Jim Drury over collection of a city tax and a judge's subsequent ruling in his favor have held up the project to develop an arts school on the site of a former Catholic seminary.

Mayor Al Spradling III said placing another tax measure on the ballot isn't the answer.

"It is not as simple as just re-voting it," he said. "Re-voting it doesn't guarantee you are not going to have another lawsuit the next day."

But Walter S. Drusch, a Cape Girardeau lawyer who represents Drury, said his client has said he would drop the lawsuit if the city agreed to hold another election.

Drury was out of town last week and couldn't be reached for comment.

Associate Circuit Judge Robert C. Stillwell of Fredericktown, Mo., earlier this month struck down a Cape Girardeau city law that provided for the expansion and extension of a motel-restaurant tax to fund the city's share of the cost of developing the River Campus School for the Visual and Performing Arts.

The ruling enjoins the city from collecting the expanded tax, but the judge postponed enforcement of the ruling pending an appeal.

Stillwell ruled earlier this month that the title of the city ordinance was too vague and didn't adequately explain how the money would be used.

Drury filed the lawsuit last year on behalf of his MidAmerica Hotels Corp. He contended the city has collected the motel and restaurant tax illegally since 1998. He has paid his taxes under protest.

The city this week appealed the ruling to the Missouri Court of Appeals Eastern District, based in St. Louis. Doug Bader, staff counsel for the appeals court in St. Louis, said the average appeal takes about 12 months.

"A lot of this is really dependent to some extent on how quickly the city wants to do it," said Bader.

Appeals typically take longer when they involved lengthy trials, requiring extensive transcripts of the proceedings.

Both Drusch and Spradling said that won't be the case this time. In this case, the appeals court will be looking at the legal file of briefs that both sides filed with the circuit court. Drusch said he plans to ask that oral arguments be held.

Spradling said the city's lawyers hope for a ruling from the appeals court by March. But Drusch said it could be at least May before a three-judge panel hears the case.

Campus in limbo

In the meantime, the project remains in limbo.

Plans call for the city, Southeast Missouri State University and the state to share in the cost of the $36 million project. Under the plan, the city and university would each pay a fourth of the cost, and the state would pay the other half.

The city's share would be funded with a bond issue, but that depends on being able to use the motel-restaurant tax to pay off the bonds. That can't happen unless the city wins its appeal.

Cape Girardeau city voters in November 1998 approved a measure hiking the motel tax and extending the life of the motel and restaurant tax to Dec. 31, 2030.

But a companion bond issue, which would have been retired with money from the tax, failed to secure the 57 percent approval needed for passage. The bond issue received 53 percent approval.

University and city officials subsequently revised the funding plans, concluding that the bonds could be issued through the Missouri Health and Educational Facilities Authority. City tax money still would be needed to retire the bonds, thus the city needs to win its appeal or put another tax issue before the voters.

The state has appropriated $16.55 million for the project, but lawsuits over the calculation of tax refunds under the Hancock Amendment -- a law meant to protect Missourians from unfair taxation -- has put spending on hold for the River Campus and other capital improvement projects around the state.

Even if that is resolved in the state's favor, funding for the River Campus project is contingent on a 50 percent local match, money that is expected to come from the city and private donations to Southeast Missouri State University's fund-raising foundation.

All tied together'

Dr. Ken Dobbins, Southeast president, said the promise of city tax money also was a factor in securing $5 million in state tax credits for the project from the Missouri Development Finance Board.

The state, university and city funding must be considered as a whole, he said. "It is all tied together."

But Dobbins said the state money isn't tied specifically to the 1998 tax issue. The city, he said, could submit another tax issue if it chose.

Mark Ward, state budget director, said the 50 percent local match was included in the appropriation language for the first $4.6 million in state funding for the project. The remainder of the state money, authorized by lawmakers and then Gov. Mel Carnahan earlier this year, doesn't include such a condition, Ward said.

But he said the unwritten assumption is that the second-year funding also is tied to the local match, a view supported by Dobbins.

As for the litigation, Spradling believes there is nothing wrong with the title of the city ordinance.

"If the Court of Appeals tells us the title is bad, it is going to affect a lot of municipalities," the mayor said. Titles weren't designed to explain everything in an ordinance, he said.

Even an appeals court ruling won't necessarily end the litigation. The case could be appealed to the Missouri Supreme Court.

But the appellate court's Bader said the Supreme Court hears only a small number of cases. "The appeals court decision is final in over 95 percent of cases," he said.